Jon Bryant: Hey everybody. Welcome back to Price. Sell. Paint. Today we have Kevin Nolan here to join us. Michael Murray as always, and myself are excited to chat with Kevin. Kevin's been kind of a mentor to us for our painting careers. And it's always fun to get a chance to chat with a mentor and someone who's just an industry expert and a titan. And so we hope that everybody takes a lot away from this conversation as we try to figure out what Kevin has taught us in real time today and get to the bottom of all the hard hitting questions about sales, building a sales team, Kevin's new book, Organizational Muscle, and just the fun of the painting industry. So welcome, Kevin.

Kevin Nolan: Hi, how are you? Thanks for having me. I appreciate the kind words too, all that stuff about mentor and titan of the industry. Wow.

Michael Murray: Kevin was my personal business coach for about 18 months. I was joking with Jon Bryant before we started recording. I think I'm part of the reason you don't want to do business coaching anymore.

Kevin Nolan: Yeah, well, I mean, I didn't love business coaching. I don't mind telling you that. Ultimately, when you have to just ask people to do something and then if they do or don't do it, you have no control. That's a position I never liked being in.

Michael Murray: I ended up feeling the same way after I coached for a little while too, so I hear you.

Jon Bryant: Kevin, could you tell everyone just to get started kind of a little bit about your background? I know there's a lot there, but maybe just an overview to understand why Michael and I have spent so much time learning from you.

Kevin Nolan: Well, thank you again. So yeah, I just retired two months ago from 45 years of building what we call the largest residential private employee-based painting company in the country. I think that's pretty close to true. We have about 150 employees, and we do strictly residential painting. We do commercial if it looks like residential, meaning direct to owner. We don't like to work for third parties or general contractors. We really don't like painting new drywall. We like to paint over things that we can see and price what we see. We don't like working off of plans.

So I tried to enforce that focus as much as possible as I built the company. And it turns out to have served us well. When you really focus, you get better at what you focus at, including selling. When we try to sell a commercial job a lot of times, it's really not what we understand. But we do understand customers, how to pick customers, because that's really one of the things I talk about in my book, Organizational Muscle, which has been out about a year now. I talk about picking customers, and I think that's part of the sales process.

But yeah, so we've grown the company. I think we now have nine salespeople. That's right. A vice president of sales, Jim Falk, and he has eight salespeople working for him. And we'll do 16 million in revenue this year, which is the biggest year we've ever had.

Jon Bryant: That's amazing.

Michael Murray: That's nice. We had Jim on the show. I think his episode came out not too long ago, a couple months ago, I guess it might be at this point. So it's great. Now we get to learn from Kevin who taught Jim everything that he knows.

Jon Bryant: And who taught you, Kevin?

Kevin Nolan: I don't know. Jim is a better salesperson than me, no question about it. And that was one of the things that I learned over the years was Jim and myself and John Meyer, my current CEO, we were the three salespeople at Nolan Painting for many, many years. And we all went to, first we went to a Dale Carnegie sales training class, very helpful. Then we went to five years worth of Sandler training, sales training, which was extremely helpful, particularly for Jim. I was pretty much stuck in my own ways and really struggled to pick up some of the systems of the Sandler system. But much of what you hear Jim talk about is a version of Sandler sales, basically.

Where you set the table, you seek out pain with customers, you have an upfront agreement that you're going to have a callback at a certain time, and all the things that we do. You set up cookbooks. So by taking that same training, we really took our sales to the next level and built a system that we could ultimately scale by hiring new salespeople and teaching them how to sell. And we do that now with people that have no painting experience and we can get them selling within three months very effectively.

Yeah, but myself, I sold for I guess 35 or 36 years or so. And I had the passionate owner sale, which means I said it, so you have to believe it. I'm going to do it because I said it. And most customers responded positively to that because you did the work yourself. So it ends up being a method, but I highly recommend that you listen to Jim Falk's podcast and follow his system because it's the one that has made us the successful company that we are.

Michael Murray: Kevin, I'd love to ask you just about that transition. How did you transition from being one of those three top performing reps that you just mentioned with Jim and John to leaving that sales role and not going out and doing the quotes and driving the numbers that I know was a big part of how you used to spend your time? How did that transition go and what kind of recommendations would you make for somebody else?

Kevin Nolan: Well, I mean, I don't have regrets in life. I don't believe it makes sense to have regrets, but I sure do wish that I had stopped selling as an owner as much as even 10 years earlier, because for some reason I thought it was something that I was particularly talented at. I wasn't, I was competent, but not particularly talented. I liked meeting customers. I mean, that was really the hold. I like sales. I like the freedom of sales. I like the thrill of the victory when you get a sale. It's very singular. It doesn't happen as a CEO. You rarely get that feeling where what you did has immediate positive consequences. You sold a deal. You're lining it up for next week or next month. It just feels good, dopamine and all that stuff.

And I remember talking to Steve Talkington, a good friend of mine and fellow Summit coach, Nolan Consulting coach. And he told me that I should get out of sales. And I was like, really, you think I'm that bad? And he's like, no, because you'll never be able to really scale the company the way you keep saying you want to if you're out selling little paint jobs. And that's not true. Some of them were bigger, but some of them were little paint jobs for Mrs. Cleaver, who I love. I've been working for her for 30 years.

And I love going out and meeting Mrs. Cleaver and talking about when I first started in business and then I get the job because she didn't call me to hire anybody else. She called me. But what happened was, the minute I dropped sales, we started to grow much more exponentially, adding a million dollars or more revenue every year, after being relatively, not stagnant, but growing at a much slower rate. Because I think sales is a specialty. And I think if you're wearing lots of hats, you're not going to be as good at it as if you're specializing in it.

And the fact of the matter was John Meyer and Jim Falk had better closing rates, generally charged more dollars because they didn't give away projects. I gave owner's discounts. I never charged Mrs. Cleaver what I should have. I gave her like a special Mrs. Cleaver rate and she expected it, she got it. And the net result was that they all had better numbers than me. Well, I was like, I'm going to get out of sales if I'm going to get creamed here. But yeah, I really realized that to be running the business means that maybe I ought to be sitting in a meeting about HR, because we have a lot of HR problems.

And I've got competent salespeople who do a better job, frankly, than me at following up, paying attention to all the details of writing up a job, of following up on the job when it's complete to make sure that everything got done correctly. Those were all things that I was struggling with being pulled in all these different directions. So yeah, once I finally gave it up, I just found other places to get my dopamine and it just wasn't from meeting with my favorite customers.

Jon Bryant: So Kevin, if you go back to the start, obviously you've done this for a long time. For someone listening who's in the position of feeling that way where the owner needs to sell and that's really their role, you've also had a chance to coach and see a lot of businesses. Where do you think the right point is? Like the perfect point for someone to drop it? What's that in terms of revenue or what?

Kevin Nolan: So it would depend upon the individual salesperson, right? Because we see some owners that have to sell, but you could tell they're really not good salespeople. They just don't look the part, which I might have been. But also, if it's your favorite thing to do, it might be the last thing you give up. So there's that. But generally speaking, I think at, like for me, for us, it was at a million at the time. This is now 1997. At a million, I can't really sell anymore. I couldn't sell anymore. And if we wanted to grow, that means I had to hire someone to sell.

And then, you know, that second or third year, John Meyer was selling two million and I was still selling a million. And then when we start doing the math and we go, well, we want to do next year 20 million, how many salespeople do we need to have? How much are they each going to sell? And how does the math work out? And you guys are doing this all now. I mean, you're projecting the number into next year and then you're figuring out who can sell what and then cookbook the whole thing. So this is all how it's evolved.

But in the beginning, the whole success of the company relied on whether I was charging enough and putting enough hours in. And for a lot of years, I just wasn't. I wasn't charging enough and I wasn't giving people enough hours to do the job. And it was having other salespeople that held me accountable. And then I quickly realized that and got better. But also, the thing to really understand is the value of an hour. We're charging between 90 and $105 an hour for work that we do. And we need every single hour of every single worker here to be accounted for.

And that change for me was very significant. It happened because I had salespeople. I was holding them accountable. I got to hold myself accountable. But we got to the point where we just never let jobs go over by lots of hours because if a job goes over 10 hours, that's a thousand bucks, give or take. I mean, if you're charging 60 bucks an hour, that's 600 bucks. But the last time I checked, 600 bucks is a ton of money. And I started to realize that one hour was sacred and we needed to make sure that every single hour was accounted for. It might not be that we got paid for it. It might be over, it might be a pushback hour, but it has to be called out and there has to be accountability for where that hour went for every single employee on every single job.

Michael Murray: So what I hear you saying is you helped to build a $16 million business and you didn't do it on square footage pricing.

Kevin Nolan: Yeah, I mean, that was... Let's talk a little bit about estimating.

Michael Murray: Yeah, so I was a bit of a renegade there. And I remember in the beginning, I was constantly talking to people in our trade association, at the time it was the PDCA, and they had a book, an estimating guide. They had production rates for how long it took and square foot pricing and things like that. And it just didn't make sense to me.

In the beginning, I counted man days, right? A lot of people do that. They figure it's going to take three man days to paint that. And that's 24 hours, right? But the question is, is it 23 hours or is it 25 hours? And people would say, well, you make it 24 hours and people will find a way to waste the time or get the job done if there's not enough time. But the reality of it is that you constantly have to study that.

You can't, so if you give someone 24 hours and you could quantify what was on the job, how many windows, how many doors, how many square feet of ceiling, how many square feet of walls, then you could break it down and come up with production rates of your own for how long things should take. And we did things like we had races where people would race to paint a window as fast as they could. I'm trying to get to, have paint on the window or paint not on the window? Or did it make more sense to get a little bit of paint on and scrape it off later?

These studies became our production rates, how long things take. And we came up with rates for doors and windows and walls and ceilings.

Michael Murray: I think, I mean, I think at this point, I would hope that we're done with this debate. I know Kevin, you said it's about 25 years ago that you were having these debates with the PDCA. Unfortunately, you know, Jon Bryant and I have picked up that baton and we're still having debates about square footage pricing. And I feel like we can put that one to bed. There's a way to do this. And I think what it comes down to is, you know, you mentioned, I mean, you have nine sales reps now at Nolan Painting. I don't know how you could train other people to do it with any other system.

Kevin Nolan: Right. So we have a production rate for a window and we have maybe five different types of windows. And then there's always the preparation factor, right? Like how much preparation has to go in for a window, whether it needs half hour scraping and prepping or whether it needs practically nothing. So that has to be determined. But I always felt that if you looked at things in smaller segments, like each window, and then ultimately come up with a number and times it by that. But if you broke it down into small segments, you were less likely to make mistakes. So you might make mistakes on a window or two, but you're not going to make a mistake on a whole job if you're looking at it in a component-based system. And then you're using your own history and your own knowledge.

So yeah, we will go out with a new estimator. First off, a new estimator will paint for about a month. They'll be in and out of the field painting houses so that they understand. I painted, you guys painted. There's nothing, I mean, they end up being the most expensive painter on your team, but they're learning what people have to go through when they paint a house.

And then we basically, for a little while, they are shadowing a salesperson. They're doing their own takeoffs. And we use Paint Scout, which has really revolutionized the way you train people. I mean, that's among the many great things about Paint Scout. It just makes it really easy to train somebody. Or I shouldn't say easy. It makes it really straightforward. You just know what to do. And you can follow a procedure that we've been able to scale. And that's what you want in business, to be able to scale.

So we go out and then for a couple of weeks, they will shadow a salesperson in between painting and things. And we have, you know, they'll look at a couple of different salespeople while they're doing their own takeoffs. So the takeoff is figuring out how long they think it's going to take. And then they'll observe the sales process, which is the interaction with the customer and the way that we present the pricing.

So we talk about this all the time, but we try to present the price on the spot with the customer. If we can give the customer an idea of what it's going to cost as close as possible, if not exact, that we can hopefully deal with any objections that may happen then and there, and then get that agreement to have a follow-up if they're getting other bids.

I will tell you that we find that on about 30% of the jobs that we bid, we're not having competition. I think it's important to know because I think salespeople get this feeling that there's always competition and that they always have to keep their prices low and their pencils sharp. And that's not the case. I mean, the fact of the matter is, I should have been charging Mrs. Cleaver a premium, more money, because Mrs. Cleaver knew what she was getting and she was getting great service and she wasn't shopping. So why was I passing on a discount to her? I have no idea. And by the way, she had lots of money. So it wasn't something, and I didn't.

So charging the right amount of dollars and all that stuff requires discipline. And we require that of our salespeople that they're disciplined around all these basic fundamentals of getting an hourly rate. We hold them accountable to an hourly rate. We hold them accountable to the number of hours. And then as you know, and this is somewhat debatable in the industry, we pay a salary plus bonuses for hitting quotas and some other targets like the hourly rate.

So we pay about 50% of a salesperson's pay is bonuses and the other 50% is a base rate. And yeah, they get paid well, salespeople get paid well and that's because if they don't sell, they get let go quickly. That's the stakes. So, I mean, you have to sell to live and if they don't sell, it's going to be tough.

Jon Bryant: So, I mean, Kevin, it's funny, like all the things you're saying are, for some reason verbatim what I say. I don't know how that happened. I feel like I'm listening to myself talk at this point. It does sound better when Kevin says it for sure. But it's funny, you're talking about at the start about, you know, using time and the whole concept of time being the metric that matters in painting. When I learned that and I learned it from, I think it was Jim Falk actually at a training session in Philadelphia, all of a sudden my whole painting business made sense.

And it's kind of this moment of inception where I was struggling, I was in the weeds. I was like, how does this business work? How can I predict anything? It just felt like there's all these mathematical equations going on and I'd show up at a job and it's $2 per square foot, they want the ceiling done. And I was lost. And so finding that moment for me really changed Urban Painter's trajectory, changed my trajectory. And I really attribute it to the fact that I could understand the business and make money.

And obviously, I mean, Paint Scout comes out of that. A lot of things come out of that, but that thinking was so important in the whole process and I wouldn't be here today. Like honestly, there's no way I get here today without that thought process. So thank you first off. That's really, really important.

Kevin Nolan: You're welcome. The same thing happened to me. I was in business for 17 years before I really realized that. I realized that every single hour had to be valued and you can't let any of them, you can't let jobs go over and pretend that each hour is not really, really significant. Each individual hour is really, really significant. And only by measuring, only by getting that half hour, hour, granular, can you really ever make any money in this business? Because Lord knows jobs do go 10 hours over. But they certainly, alarm bells are going off and it's all hands on deck. And, you know, we're trying to figure out the best solution. And it's the exception that goes over, not the rule. And then lastly, what did we learn when that job went over? That's super important so that it doesn't happen again literally next week.

Michael Murray: What do you recommend? How does somebody do job costing, if you will, or after projects? Does the sales team get together to review the project? If somebody listening is trying to understand, how do they practically put into place what you're talking about? What would you suggest?

Kevin Nolan: Well, so people are sometimes surprised, but we don't do job costing. It's a whole function that we've eliminated completely. Basically, we count hours and back to that 24 hour job scenario again. A team is given 24 hours. If they bring it in at 24 hours, that job receives a score of 100%, right? 100% productivity. If the job comes in an hour under, it ends up being like 95% productive. I'm sorry, the inverse. If it comes to an hour under, it ends up being overly productive. It ends up being like 105% productive. That's great. 105, 110% productive means it was great. It made money, came in under budget.

If a job goes over budget, it's the inverse. It's 90 or 95%, which is not as good. We can actually make money at 95% because once again, we've got everything measured and we can't make money at 90% but we can make money at 95% productivity. And so we know that. So in our world, by the way, we bonus people who bring in jobs at 100%. We actually bonus at 95%. That was new this year. It had been 100 but we noticed some friction in the last year between sales and operations. And so we decided to lower to 95 to see if we couldn't alleviate some of that friction.

Meaning, I gave you 24 hours to do the job, paint crew gets there, they go, no freaking way are we going to get this job done in 24 hours. And they have a debate amongst themselves, they go out and they count windows, they count walls, they estimate prep, they come up with a new estimate. A lot of them are using Paint Scout to do the estimate, another person is using Paint Scout to check the estimate of the original estimate.

Yeah, I mean, that's awesome. And if they are entitled to hours because the estimate is tight or off, then they get it. We generally favor the operations team. If they're prepared to go through the requirements to get pushback, what we call pushback, if they do it, then they're going to get it. Mostly because I always say that salespeople are professional bullshitters and I'd rather have the operations win that argument.

And also once again, I'm hoping the estimator learns and gets more hours the next job. Remember one of my last experiences was I get called to a job. I go out. The guy, the painter sheepishly tells me that the boss didn't, I'm running a $5 million company. The boss didn't put enough hours on the hallway to strip wallpaper. And I'm like, no way I could do that. I could do that in two days. Come on. And they're like, no, we can't.

So the game says that operations wins if they go through the process. So they got an extra eight hours. Literally that same day, I'm at another hallway, very similar. I look at it, I had an extra 12 hours because I learned something that morning. I'm not an idiot. I don't want to go through that again. So I'm going to add hours and I got the job. So the customer paid what they should have paid and we got paid what we should have been paid. So that learning has to happen. You know, getting back to those time studies, that has to still happen all the time. There has to be this feedback.

So what we do is we count hours and we know real time whether a job made any money or not. If the job is at 100% and had 24 hours and it came in at 24 hours, that's job costing, right? And if it came in over or under hours wise, I know right away what's happening. And that's more important in real time. Real time, like today, it's not done yet and there's only eight hours left and we have two guys there. It's going over unless we make changes or do something. You need to have that information real time, not a week later after you do job costing. That's what we think.

Jon Bryant: Can I ask you a question, Kevin? I mean, this is, I mean, people listening to this podcast operate businesses in different ways. We know this. I mean, we're all advocates for, you know, an employee based model. In a sub model, does it still work? Obviously hours, we're not judging the sub crew on hours, but production rates, does it still work?

Kevin Nolan: I think it does. I do think it does. I mean, I think you have to hold people accountable either way. And I think a good subcontractor, whether he is kind of your full-time guy or whether he's somebody that you use in a traditional subcontractor relationship, it's still a contract and you're having a deal with somebody. And there needs to be that kind of give and take and also that kind of feedback from each job.

My take on the employee based model is I just like it better. I think once you get past the original benefits of subcontractors and they're out there, I mean, taxes, workers comp, and you even have to deal with payroll and stuff like that, there's benefits to the subcontractor model. But at some level, when you get to a certain size, maybe, I don't know what it is, but there's lots of benefits to the employee based model. I mean, I have all my employees do exactly what we tell them and we know that we train them that through decentralized command, that if they're not going to be there on time, they're going to give a phone call. That if at the end of every job, they have to follow all the protocols that we do to make sure a customer is satisfied. And then lastly, dealing with turnover issues and keeping people long term. It just seems like the employee based model is a better long term model.

I think if you were trying to scale a business, you might start with subcontractors and then try to make it over to employee-based business, if any of that makes sense to you. I certainly have enjoyed the benefits of having employees over subs. In the beginning, that wasn't the case.

Michael Murray: Yeah, I mean, Kevin, I think you guys have had people that started with you as maybe a painter's apprentice type role and have moved their way up into the executive leadership team, which I think is hard to do if you're trying to build it off a sub model.

Kevin Nolan: Exactly. Yeah. I mean, recently we've had a number of people move up from crew leader to field manager. So field manager is our highest field person right below the vice president of operations. So a field manager is like the supervisor, runs about 20 people. And we've had three that have moved up recently from crew leader position to field manager position.

So you naturally have a farm team if you do it right. And you have a farm team of apprentices turning into painters and painters turning into job leaders and you're always paying attention to that. And once again, that's another, ultimately for scalability, it feels like it'd be harder to scale with just contractors because you'd always be looking to replace contractors. I mean, we're always looking to replace employees that are not happy that leave or don't do a great job, but we can find ways to keep ones that really are. And we've been able to do that, you know, 401ks, healthcare. I just feel like those are things that you need to provide if you want to have a long-term relationship with somebody. I think you have to be able, and they have a family and they have to deal with these issues of healthcare and ultimately retirement. It's the way it's been done in America and it's an opportunity to create that family atmosphere that we've been able to do.

Jon Bryant: Yeah, which also, I mean, I've always taken away as being a core value of Nolan Painting, right? Something that you guys were founded on. So it makes sense to stick that through.

Kevin Nolan: I know one area that when I was thinking about this call, I wanted to talk about was picking customers. And I do talk a lot about that in my book. In fact, I focus most of the chapter on it. I only touch on sales, but I do focus on choosing customers. I started at the call talking about the type of work we do, commercial if it looks like residential. But beyond that, believe it or not, we only want to work for nice people. I know that sounds all squishy and stuff like that. But it is super important to heed the red flags. I mean, if there's anything I learned in 45 years of business, it was listen to the warnings, heed the red flags. If a situation doesn't look good, go the other direction. Otherwise you will take it on the chin over and over again.

And we still have a couple of those now and then. But I constantly am lecturing salespeople to only work for nice people and to try to sort of suss that out in the interaction. So we want to interview them to see if we're a good fit. And through the years, we have eliminated people that we've worked for who we didn't think were very nice to us. And that list has grown to about 3,000 people that are now basically have a star and they're basically blacklisted from our company.

Jon Bryant: Will you consider publishing that list, Kevin? I think there's other people who, I think we should all do the same and share that list. Everyone would be happier.

Kevin Nolan: Yeah, now it's really, really powerful because if somebody took a long time to pay you, that's disrespectful. The contract says that we finish, you know, we present the job to you and then we get paid. And if you violate that, then we can't do business going forward. I mean, I know people overlook that and go, well, I need to work. If you're selective, it's a game changer. I mean, it is.

Literally the sales guys send out emails every week from people that have different expectations than we're prepared to deliver. Sometimes way up high, crazy expectations, or sometimes way low. They want cheap, they don't want good. Or they just have a personality that seems like they'd be overly demanding. Or we watch an interaction between a spouse or between a parent and a child in the home while we're interviewing them and we say, man, they seem like they have a short fuse or something like that. Well, that's somebody we'd rather not work for. They seem incredibly picky or anal.

I mean, I don't know whether you want to be a hero or not. I know for years I wanted to be a hero and I wanted to make everybody happy. And I thought I could make anybody happy. And then I realized that is stupid. How about try to make the people happy that can make you money? That's the ones you want to focus on. I was coaching and there was a client that I was coaching where every month he would have a bad job and that bad job would sink his P&L for the month. And every month it'd be a different bad job. And sometimes it was a bad estimate or sometimes it was a really tough customer or a general contractor that was making them jump through hoops or somebody that wasn't paying them.

And they're basically crying about something that could have been avoided. Maybe. I just can't stress that enough that picking a good client is going to really change the whole relationship. And a lot of our marketing is around being friendly and working for friendly people. And it's amazing how we've been able to achieve success at that particular angle. I sort of can't believe that you can actually pick customers and pick away from bad ones and how it impacts you as much as it does but it really really does impact you.

Jon Bryant: So quick question for you, sorry Michael, letting customers down in that interaction, how do you do it? So you don't, you've found the red flag, now what?

Kevin Nolan: Yeah. So I describe it in my book. I talk about, so we are accountable. So we're going to basically send them an email. Usually we like to wait a short period of time. We don't want to make it look like we were so trigger happy. So we wait till the end of that day. So we meet them in the morning, pretty much decided we weren't going to work for them at the end of the day. As you're finishing up, send out a standard email that says after careful consideration, we've decided to pass on this opportunity. Say no more, nothing more. Okay, and then thank you for the consideration, your name, done.

When they send an email back, ignore it. That's called intelligent neglect. The reason why is there's nothing good that can come from that, right? There's no positive outcome. I don't think you're going to change your mind and you shouldn't and take them on and the customer is not going to be happy with the truth, which is your perceptions of their behavior. So there's no win to that confrontation. Hey, I like good confrontation as much as the next guy, but that's not one that is going to basically be winning for the customer. So we would avoid the confrontation. We would have thought they got the answer that they needed to hear, which was you're not bidding on the project.

Now, if they call back another time, at that point, intelligent neglect is off the table. Okay. And we have to then provide another response. And typically that would be a phone call with the same thing. It's a waste of a call. I get it. But basically, yeah, I'm sorry. We just decided we're moving in another direction. And yeah, I'm afraid that we're not interested in bidding on the project. Thanks very much though for the opportunity.

And then the pregnant pause is really fun. If you get good at it, you could really enjoy that pregnant pause where you say what I just said, and then you just wait. And you're smiling to yourself and you're just waiting. And then the customer finally decides to say, okay, thank you. Or they just hang up, but it's over. And you did not get yourself in any trouble.

So I don't like sending them a quote for a million dollars. I think that is cowardly. I've done it. I've done it. It's cowardly behavior on my part when I've done it. I don't think it's a good idea. Also, if you charge a tough customer a lot of money, they'll make it worth their time. You will not make money by charging a tough customer more money. They'll just wring it out of you. And so yeah, that control factor is important.

Do you know when you hire a contractor or anybody, you often get a couple of bids or whatever, you hire someone and you decide not to hire them. There's no cross-examination. Often you don't even get back to them. You just don't even tell them. Right? And that's the way we're treated. So we'll one up and we'll be more respectful. We'll let them know. So the other thing you could do is not send them an estimate, right? Charge too much, not send them an estimate. Or how about just tell them the truth that you're not interested in doing the job.

And you're not going to tell them why, but you're going to tell them that you're not putting a bid in. So it's very liberating, and you can get very good at it, and it'll change your bottom line. So if there's a takeaway, I hope someone takes that away today, because that's a bottom line changer.

Jon Bryant: You ever get a bad review from doing that?

Kevin Nolan: Yeah, yep. Yeah, we respond to the review. To be honest with you, that's pretty much the only bad reviews we have out of like the thousand. We have a couple of people who gave us a one star because we wouldn't give them a proposal. And, you know, we'll respond online. We're sorry we couldn't accommodate this person's request. And then we'll just move on. So I don't mind if people go searching and they see five star, five star, five star, ornery customer, one star.

Michael Murray: Yeah. I think most people can read, you know, they read that review and they know exactly why you didn't provide them with a quote. Yeah. One of the things that I'd like to talk about in the industry, you just touched on it, Kevin is, you know, I see that one of the things, the two big things that hold a painting company back is one is just having enough leads. If you market enough, if you have enough leads and you have an abundance mindset, you can pass on those bad jobs.

You know, and we've all done it, right? Especially when we were getting started and we have to take anything we can just to try to bring in some dollars to keep the lights on. It's harder to say no to those bad customers at that point. But if you do what Nolan Painting has done, which is building a great brand, a great reputation, all those thousands of five star reviews, you know that tomorrow the phone's going to ring and somebody else is going to want a quote. And chances are that's going to be a better person to work for.

Kevin Nolan: Absolutely. Yeah.

Michael Murray: And then I think on the other side, it's the employees. And if we have enough applications coming in and we're doing interviews and we're constantly trying to be the employer of choice, we're never beholden to that bad employee who has a bad attitude. But we just got to put up with them because this is just what I have. And if we fire this jack wagon, then we're not going to be able to hit our production goals or schedule or whatever. And, you know, those are the two things that I see in our industry all the time.

Kevin Nolan: Yeah, always be marketing and always be recruiting, right? Yeah. And if you have abundance in both those worlds and you create abundance in both those worlds, it gives you so much more power and control.

Michael Murray: Yeah. I'd love to hear if you could just talk a little bit about hiring sales reps. You obviously have a great sales team now. I'm sure you've had some sales reps that you've hired that didn't work out. Tons of experience that you bring. Provide us with some wisdom. What are we looking for? Help us to hire some sales reps for those that are listening.

Kevin Nolan: Yeah, it's pretty hard. It's not easy. I won't say it's easy hiring a salesperson. When you put the ad in LinkedIn or whatever, everybody replies to it. They all basically reply, even if they're in operations. You're like, why would this person apply to a sales job when they have no experience? So it does take some work. So I think you got to be prepared that it's going to take a little bit of work. And also, you're going to have failures.

You're going to hire someone and you're going to make a mistake and you have to basically react quickly because we've had salespeople that have not made it here, quite a few. And what we do is we try to fire fast. I mean, I know that sounds mean, but if somebody is not capable, then we need to move them out pretty quickly. As soon as we sort of discover that and not a moment longer, and I think that's where some of the pain happens if you wait.

Michael Murray: Kevin, just, sorry to interrupt you real quick, but you just said that sounds mean. I actually think it sounds kind, right? As opposed to, because there's an, we're hoping they're going to quit so as the owner or the manager, we can avoid having to go through the pain and discomfort of firing this person and having this real conversation. The reality is they know they're not performing well and they're probably not all that happy in the role. And they know they're not meeting expectations and they go home every night upset, you know, trying to figure out what am I doing here? But they also don't want to be a quitter or whatever the case is.

And, you know, I think sometimes it's more kind to be the adult in the room and say, you know what, this isn't working out. It's not personal. Now I want to let you go find the right opportunity for you so we can find the right person for us and we can all move on. I'm sure you agree.

Kevin Nolan: Well, and I agree with you. I think you can do it in a friendly way. It sounds like you were very friendly there. And so it's important to do it in a friendly way. But the great thing about sales is it is so empirical. Like, literally, you can see how much they're selling, what their sales rate is and what they're closing at. And you can tell, particularly in the beginning, I mean, if they're not hitting it out of the park pretty early on.

I know some of our salespeople will have a bad month or two. But generally speaking, if a salesperson has to rebound quickly from rejection, all the things that you need them to be able to do, they have to be able to demonstrate pretty much day one. It's interesting because it's both an easy job and a tough job. It's easier than painting houses, let me tell you. It's easier than managing employees, no question about it, if you're good at it. If you're not good at it, then it's going to be harder to do that.

But at the same token, you're alone, you get rejected a lot. A lot of times you can feel beaten down. A lot of times you feel compromised. So you need someone who is resilient like that. And you can usually tell pretty quickly. So we keep track. And if someone misses a month, if a salesperson even misses their goal for a month, we're really concerned because we know that they should be really concerned. They probably are really concerned and we want to make sure that they have a plan to get back on track.

So we don't give them much rope. Like if you missed your quota three months in a row, you're probably not going to continue here, regardless anywhere along the way. But we're going to be in there helping if we think there's a way to help you get your quota, we're going to be there doing it. But at some point, even before then, we would make a quick decision and then let them go, but do it in a friendly way. Yeah.

Jon Bryant: Kevin, so one of the things that I always struggle with this position is once you get somebody in there, how soon to figure out whether they're capable. Do you have any kind of metrics you look for in the first three months? Because you said it takes about three months to train someone, which I agree with. When do you start to see that they're successful or what shows it?

Kevin Nolan: Yeah, really just how their demeanor is with this whole process. I mean, I think a salesperson should be really likable and should be the type of person that when they come into the room, people are glad to see them. And so even during that few months period, we're looking to see comfort levels, role playing, role playing in front of a real customer.

You know, and seeing how it goes. And then by the third month, they're getting a quota and the quota might be a hundred thousand in our world. And by the fourth month, we're sort of making a decision whether they're, I mean, we let somebody go after, I guess three and a half months this year, because we could tell that they were, they just, we were wasting leads.

The sad thing is, if a lead costs, let's just say a lead cost 100 bucks, you know, take all of your marketing dollars, count how many phone calls you have, you divide one into the other, let's just say it's a hundred or 110 dollars a lead. And so that's one thing, the cost of the lead, but it's also the fact that you may have lost a job that may have kept the whole team busy next week. And like this time of year, that's really scary. So we try to hire in the, we try to plan it for a winter hire. So there's a winter learning curve. And then in the spring, they're practicing when the leads are not as important. They may still cost $100 a lead, but there's not whether we have work or not, depending on it.

Like right now, I mean, right now, our closing rates are probably 75% or even higher right now because our pricing is really sharp because we need work for the holidays. And we've been doing a lot of emails offering Cyber Monday discounts to our customers. So our customers are calling us, taking advantage of a planned discount that we've pre-advertised. So as a result, they're going to hire us. You know, Mrs. Cleaver calls, she's getting the discount, she knows. 100% chance she's hiring us. So our closing rates go up this time of year.

To your point, Michael, when you have lots of work and you're not as hungry, or you can push them away and you don't need every job, I don't mind if the rates drop to 45% in the spring because I want them to push away bad customers. Actually, what we do is we exempt that potentially bad customer is not counted into the mix. So we call them no bids and every single month estimator submits all of his no bids. That's added into his closing rate so we don't penalize them for doing no bids. And it's interesting because some salesmen send out no bids at the drop of a hat and others take on customers they shouldn't. And we have both extremes that happen here.

But we talk about it and nobody is confused where I fall on the matter. Because I've been so beaten up over the years by bad customers that I just don't want them anymore. And I beg them not to work for tough people, you know? And the quality of my life went up dramatically when we did that. Just so many less problems.

Michael Murray: And you know, it's that abundance mindset, right? And you're doing okay. Your business is thriving, making good money. I would love to go back though. You talked a little bit about some of the win percentages, closing rates. I'd love to hear, you know, maybe what are your expectations for a sales rep in their first year or two? Certainly, you know, once you get into that, I mean, three, five years, some of the people on your team have been there for 15 plus years. Those expectations might be unrealistic for somebody who's kind of newer or maybe a smaller business, but what type of sales over the course of their first year or second year, what kind of win percentages, maybe give us some context for somebody who's thinking about hiring their first sales rep, like what kind of expectations should we have?

Kevin Nolan: Yeah, so we always felt that salespeople got about one out of three jobs just for showing up. You know, you didn't have to do much in the way of sales to get a 33% closing rate. I don't know if it's true or not, but anecdotally it works. So therefore we need something higher than that. So I think we're looking for about 45 to 50% out of a new salesperson.

And the reason is, is because they're selling a brand. They're not selling, most cases, to someone who hasn't heard of us. I mean, we've spent a million dollars on advertising the last few years, and they know who we are. So we expect to have, we think that if somebody calls here, that they have a pretty good idea of what they're going to be getting, even price-wise. You're not going to say, my God, you're twice as much as everybody else.

That doesn't happen as much as it used to, mostly because of the expectation that people have already going into it. They're not calling that cheap-ass painter. They're comparing us with maybe similar competitors or perceived similar competitors, as opposed to no names. And so, I mean, it used to be if they didn't know who I was and I was twice as much as somebody else, they would think there's something wrong with me.

Now when we're twice as much as somebody else, I think there's something wrong with the other person. And there probably is. They probably are not charging enough to grow and scale a business. You know I talked about that rate of 90 or 95 or one hundred and five dollars an hour. So keep in mind, we don't tell customers that right. Nobody tells the customer their hourly rate, at least generally, because customers would think it's way too much to pay a painter.

I mean, I'll pay a car mechanic that or I'll pay an HVAC person that to work in my home, but I'm not paying a painter anything near that. So we don't tell them that. Clearly we come up with an estimate. We use Paint Scout. We count how many hours we're going to be on the job. We have an hourly rate. One of the nice things about Paint Scout is it's web based so we can change things like the hourly rate and it'll be across the whole scale as we're making price changes.

But when we do a job, we have a safety manager that's showing up on jobs doing safety checks. We have supervisors. We have people delivering paint. We have seven high-reach pieces of equipment, high-reach machines. All these things make us more efficient. And we then can pull a job in at 24 hours that might take another company 28 or 32 hours because they're not as efficient as we are. I granted we got overhead, but our overhead is productive. It's causing us to be more efficient, less waste, less mistakes.

So yeah, so we're bringing a lot to the table, a lot of value, and we're not twice as much as legitimate contractors. Not ever are we twice as much as legitimate contractors. We might be a little bit higher, but often we're fair priced for what we deliver. And I know I spent a lot of years thinking price is what people bought, and it's not true. People buy emotionally, and a lot of them buy Nolan Painting because we created a really cool, remarkable company that has an affinity for the community and the community has affinity for it. And as a result,

A seasoned salesperson like Jim is closing 80, 90% of his jobs. I mean, it's a rare estimate that Jim goes on that he doesn't get. But a new salesperson, I think we're looking for 45%. It appears to me that we're looking for 45%. We have a big board downstairs where all these numbers are up on walls. We do change it by season, like I just talked about. You know, the winter months, we're going to raise it because we're going to be, it's a terrible thing that happens in the winter. You know, we lower our prices and we get less volume and we lose money. So that's why we have to charge big bucks for the rest of the year to make up for it. I mean, how do you handle the seasonality of the business? You charge more during your peak seasons. And that's what we do.

So my friend always said, he's 85 now, but he was a painter mentor of mine and he always, every time I saw him he'd say, don't be shy, raise your prices. And it stuck in my head that I just needed to constantly keep raising my price.

Michael Murray: Kevin, was that Len? Was that reading about, okay, yeah. So in the book he talked about, he said, if you're not getting price pushback, probably need to, what did he say here? You're not charging enough. Don't be shy, raise your prices. That was one of the pages I have highlighted and tabbed. So yeah.

Kevin Nolan: Yes. Exactly. A lot of times we'll have people complain about it in a laughing way. Like, my God, what's this going to cost me? But they're laughing about it and they really like dealing with us. So, yeah, I think that as new contractors, there's so much head trash. We talk about head trash a lot with salespeople because they go in, they make these assumptions and a lot of times the assumptions are totally off.

And they should be making less assumptions. They should be basically counting and timesing and trying to sell the value of the company. And that's what the focus is on. And that's what Paint Scout does, which is so amazing is it levels the playing field every single estimate for every single salesperson. And we can look at where mistakes were made. They didn't put enough hours on the windows. We can learn from that.

Or in my case, we didn't put enough hours on the wallpaper stripping. And we all have made mistakes wallpaper stripping. And my friend Len also used to say, it's better to be fat than short. So you have to add an extra hours than to be short on hours.

Michael Murray: I need to put that up in our sales, our office. We have some female sales reps though, so I don't know how that'll go over so well.

Kevin Nolan: How does it work? How does it work? We don't have a female salesperson. I would love to hire a female salesperson. I know you've been doing it for a while now.

Michael Murray: Yeah. Yeah, very well. And yeah, we've had, you know, some that have come and gone. I mean, one of the challenges, one of our top reps left about a year and a half ago because she had her first child and decided to leave the workforce, at least temporarily or whatever, which, you know, a lot of women decide to do. And so that's certainly a challenge. But yeah, I mean, our top sales rep this year is a female and I, yeah, I mean, certainly it's, you know, we have males on our sales team. You know, Kevin, just talked to me. Easy, you know, not easy, but certainly possible to be successful either gender. Yeah, I think for us, for what we focus on, you know, similar to you, residential repaints, I think it resonates really well. Because a lot of times we're talking with a female homeowner.

Kevin Nolan: I would say, I mean, by and large, in a lot of homes, the women are making the decision. And so, I've always, it just hasn't happened for us yet, but it will. I mean, we have plenty of women in other aspects of our business, but yet not in sales, so soon.

Jon Bryant: Well, yeah, it's a man. What an adventure you've been on Kevin. Nine sales reps. That's where you're at right now. I mean, you're out of the business. You're retired, but you're there today. So they can't keep you away.

Kevin Nolan: I'm in the office today because as I mentioned to you before the call, we're having a big community event tomorrow in the township. My company is the presenting sponsor and we organize and put on the Reindeer Romp, which is a 5K race. Probably have 500 to a thousand people and we raise $35,000 a year for the American Cancer Society.

So it's been my baby for the last 23 years and I haven't retired from it yet, although it's plain to see that other folks are ready to step up. But yeah, so I'm here today. We had a meeting, an advanced meeting. It's going to be a chaotic day tomorrow. All of our employees are coming as volunteers, which is more volunteers than we need, but it's really a community event, but it takes a lot of management. But no, I'm 100% retired and I'm loving it. And I hope that everybody aspires to it and is ready for it, as ready as I was.

I mean, to be ready, you have to have your health and you have to have some cash. So those are the two things that you need to focus on. Folks your age is make sure you're staying healthy and putting some money away so that you can have a transition and a succession plan and be successful at it. Because if you have money, health, and time, it just doesn't get any better than that. And that's what retirement looks like.

Michael Murray: Kevin, I'm curious, did you ever consider selling the business as an exit strategy?

Kevin Nolan: Not really. Too many of my family and friends started to become part of the business and I just couldn't see taking that and selling it. It just didn't seem right. I managed to put away enough money that I don't need to do that. And there are, there's been three liquidity events in my company, meaning cash outs to me. Only one has happened so far, but there's two more coming.

And I have helped save and prepare for that. So the money that's coming to me has been saved by me and the management team over the last five or 10 years. So what's happening in my company is not only in my now, I'm the oldest, but my whole management team is in the process of retiring in the next five or so years as well. So my payouts are for them as well. So we've got some liquidity events for all of us for having put the money in the bank. I mean, we put the money there and I've never taken money really out of this company other than my rightful salary. And this is among the first time.

But I'll leave the company debt free with a chunk of money in the bank and good leadership. And frankly, I mean, I think that you just need enough money to retire well. I don't need lots of motorboats or fancy sports cars. I just want to be able to be free and be the, you know, travel and do the things that the freedom that entrepreneurs love. I mean, that's really the amazing thing about it. I think it's even cooler for an entrepreneur to retire because you're finally free. Nobody is telling you what to do. No customers, there's no meetings. It's free. If you worked for a company all those years, it might not matter to you as much.

Michael Murray: So what are your plans? Tell us a little bit more. What are you going to be doing? Are we going to get Organizational Muscle 2 focused on sales or where are you going?

Kevin Nolan: Yeah, I think at some point, I sort of decided I'd start writing again in March and do some rewrites to the first book and do that just so I can tell people what I'm doing. Because at the end of the day, I really want to just be free. Right now, I'm interested in skiing. I'm interested. I just did the Philadelphia Marathon last week. So I'm still very active.

But I want to, school's out, man, school's out. I haven't even thought about a part-time job. School is out. No, I mean, obviously I'm busy. I'm doing 5K races and there's always something to do. I'm going to spend the winter in Utah. So.

Michael Murray: Are we going to see you at any of the PCA events? I know last year you came to the expo and spoke. Have you thought about that at all?

Kevin Nolan: Yeah, we haven't been able to work out a speaking arrangement with the PCA, so I won't be there this year, unfortunately.

Michael Murray: Okay, got it. Hopefully some point in the future. Lots of wisdom here. Well, this has been great. You know, obviously Jon Bryant and I started by saying how much you've meant to us. You know, I think we both resonate with the idea that we would not be where we are. I know there's many people in the industry that have you and Brian and the Nolan Consulting team to thank for so much success. So from the bottom of my heart, Jon Bryant's heart, thank you for the time today, but thank you.

Kevin Nolan: Thank you. You guys are too kind. I do appreciate it. And I'm really good to see you and I'm glad your businesses are doing well. And thanks very much and have a great holiday season.

Michael Murray: Yeah. Thank you. Well, we hope to catch up with you soon, Kevin. You know, whatever you decide to do, you're going to do it with excellence, like you always have. So thank you again for your time today.

Jon Bryant: Thanks, Kevin. Awesome. Thank you.

Kevin Nolan: Thank you guys. Have a great one.

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