The Secret to Selling Paint Jobs (That No One is Talking About!)

Jon Bryant: All right, everybody welcome to the Price. Sell. Paint. podcast. Jon Bryant, Michael Murray here. We got Seth Peek from Peek Painting. And can you pronounce the place that you're from Seth? Cause I can't.

Seth Peek: Atascadero, which means like a plate of mud, a hole stuck in the mud, Atascadero California.

Jon Bryant: I love it. California. So we're going to be having a great chat today about production rates, getting prices on site, getting back to customers. But before we do that, Seth, you were just recently in the news. So you want to tell people why?

Seth Peek: Yeah, I'm running for city council in Atascadero. There's three people running for two seats. I've been gathering all my endorsements. I have my press release in the local North County paper. I was just joking about it's really skinny. Right next to my article, they busted a bunch of drugs. That's a flamethrower. If you didn't know, there's Xanax, there's ketamine, Adderall, and then there's Seth Peek for city council. So I thought that was pretty interesting. One of my platforms is really supporting our public safety, our cops and everything. So maybe that was a happy little mistake as Bob Ross, whatever his name would say.

Jon Bryant: It's either that or people think that that was you. So one or the other.

Seth Peek: Yeah, I hope so. The notoriety can get you a long way in politics these days, being notorious.

Michael Murray: Well, and I think if you just gave out one of those sweet hats to all of the voters in your area, it would be a shoe in. John, you and I got to step up our wardrobe game here. We look like a bunch of schlubs.

Jon Bryant: I mean, I look like I'm living in my basement, which is possible. You look like you're at the office and Seth, you look like you're on the beach. And I want to emulate that, not what I'm doing. So it's good. I kind of love the secrets. So let's get into it. Cause there's a lot here to cover. And I think there's just things that we all agree on, but I'd love to get into kind of the nuance and see where we don't agree either. Let's start with this though. You've got a promise on your website. Let's start there. Actually, before that, let's hear a little bit of the story. Why are you in painting and all that kind of stuff?

Seth Peek: Okay. The short answer is my uncles and dad are painters. And so we were raised in it. Once I decided to start a business, it was kind of a no brainer seven years ago to start the framework of Peek painting because I had the family influence and I had done it for a while. I knew enough to be dangerous. I was painting houses. I wasn't necessarily leading because of the three man company. So me and my boss and my other employee, I was painting with another guy for a couple of years before I started my business. Painted off and on in high school and college for my dad and uncle down in San Diego. John Ray, he owns Peek Brothers painting now and Paint Green. He's a PCA member. I believe he uses PaintScout.

Jon Bryant: Yeah, yeah, John Ray is great.

Michael Murray: All the cool kids do.

Seth Peek: Side note to remind me to come back to that. John Ray bought the company from my uncle John and my uncle John bought my dad out in 2006. So Peek Brothers painting still exists in San Diego. Last week, John Ray, if you're hearing this, last week we got a Peek Brothers review on Peek painting site on Google. So we got a free Google review. Said they did a great job.

Jon Bryant: So one star.

Seth Peek: And I just responded, thanks for the review. But it says the Peek Brothers did a great job. I'm like, well, my brother and I are Peek Brothers. So we're going to keep that one. I got into it just because it was familiar and it was an easy thing to start.

Jon Bryant: Cool. And where are you now? How many years in?

Seth Peek: Where we are now, structural wise, we are at 16 painters, I think right now. We'd let go of a few in the past month or so. We've been maybe hiring, interviewing a little bit. We have an administrator, one full-time sales guy right now, Eric. I sell a quarter or less right now. I'm more of just the legacy clients that contact me directly or the builders that I already have a relationship with. And then my brother's operations manager. So we're running at any given time, there's seven projects at a time, two to three people on a job. And we did 2.2 million last year. This year we're definitely on pace to be 3 million, I think by December. So that's kind of where we are in a nutshell. We're doing pretty good this year, considering a lot of people are saying about the economy. We're operating at about 50% gross profit and it's going well. The summer's going good. Pretty stoked.

Jon Bryant: That's awesome. Great to hear Seth.

Michael Murray: Yeah, let's get into the guarantee. We were talking a little bit before we started recording, but yeah, let's talk a little bit about on your website. The first thing that somebody sees is this 48 hour guarantee. So tell us about that and kind of where this came from.

Seth Peek: So, I think we have competitors, probably I think one of our competitors uses PaintScout, but the big need for clients is they want to get a quote. Everyone wants an instant quote. You got Uber, you have Instacart, you got DoorDash, you have every main service that you have on this planet, everything that's worth its salt. You have an answer or it's delivered to your door within one or two days. So the idea of having a quote in your hand within 48 hours of you researching the company to call them is a big deal to us. And so what that guarantee is, it's not saying that no matter what time you want within 48 hours, we're going to be at your house or at your building, but it is saying that there will be an appointment slot open within 48 business hours, whether or not it fits your schedule. That's not our problem, but the guarantee is that if you're flexible within 48 hours, we can be at your house and we run into an issue sometimes where we get really busy and Eric's calendar gets filled. So then when they call the customer and if Senni in office notices that we don't have an availability, then she puts it on my calendar. So we always will take care of someone within 48 hours if that's their need. Now, some people are like, well, I don't care. We'll just do it next week. Or I'm going to make the appointment next week because I'm going to have a day off on my swing schedule. That's fine. But we just guarantee that within 48 hours, they will have a quote in their digital inbox. You'll have the appointment and then they'll have the price within 48 hours of them considering Peek painting. And it's a big deal. People really like it. The only downside that some people spin, I spin it the opposite way. The one downside people spin is, well, you never want to be the first quote. And if you're that responsive, then we're usually the first quote that people get. So one of the arguments that people have against being the first quote is that they want to be able to figure out what the price was. They don't want to be first. I want to be first so that we can set the standard. Cause if we're going to be one of three quotes, hopefully not four, I want to make sure that they get the standard of what they should receive the first time we're there. Cause we're going to be the most professional in our area. We have a couple of competitors where it might be on par in terms of professionalism, but we want to be the first one. So we set the standard. So if they decide not to close on the spot, they decide not to move forward with us right then and there, then at least when they get the next one from maybe a little bit less professional of a business, they might be like, geez, they're nothing compared to this first company. So that's why we like to be first. And I believe that people appreciate, the people that we like to do business with like to get the quote, get the appointment, get it done, get a decision made and move on. And that's generally what we find. Our closing ratio reflects that.

Jon Bryant: Yeah, I was going to say that argument of being first usually is like now you've given your information so you're at a disadvantage. But what you're saying, you can set a different standard and has it affected the win rate or is it better, worse? Do you see any difference?

Seth Peek: No, I wouldn't say it affected the win rate negatively. Positively it's affected the win rate. I feel like if we get there, we get them what they need, we get them something with a sales process of being all up front, all done within two days of them wanting a paint job. Often they'll, I think two weeks ago, Eric said they canceled the other two appointments without even having them and they accepted on the spot. Because if you supply what they need and it's within a price range that they were thinking of and they like you, then it's easy to close on the spot right then and there, or at least they have the inclination in their mind. We're going to go with these guys, but I'm at least going to get the other quotes just to kind of compare the price or something.

Jon Bryant: Yeah, yeah, I totally agree.

Michael Murray: Yeah. And I think in our industry, the expectations of most homeowners is pretty damn low. They expect when I fill out a form or I call and leave a voicemail, cause they don't expect us to actually answer the phone, of course, that somebody might get back to me maybe within a few days. And it's just like, now all of sudden you guys have a great experience where we can get out to your house and get you a quote within the next 48 hours. Not you're going to hear back from somebody in 48 hours. If you leave a voicemail. We've all heard that you got to call everybody back within 24 hours. It's like, please for the love of God, if you're taking 24 hours to call somebody back who wants a quote, you need to just go work at a company as an employee, please stop.

Seth Peek: Yeah. So we took our phone numbers off of our vehicle. We want people to go and just book instant quote.

Michael Murray: Yeah. And so I think you're just giving somebody a great experience right from the beginning. I can imagine that it's just that is a high bar for your competitors to have to meet. And it's just like, yeah, to your point, good luck. This is what we're going to do. And let's keep up and raise the standard of the industry.

Seth Peek: And I think one of our main competitors, we hear it often, good for them, but I've heard from numerous times, we're getting a quote from this other company in a week and a half. And I just think that's irresponsible. But I also think that there's some businesses that operate where the salesperson is also the project manager. So maybe they're only running one or two quotes a day. Cause they're also running all the crews. And I think that's probably the reason, because I don't understand how you can get that many leads with multiple estimators to where you're a week and a half booked out. That's just a phenomenal amount of leads, especially in our area where I just know the market size. I know the size of their business. I know the size of my business. If we're not being able to respond within a couple of days and for them to have a price, I just feel like there's too many room for things to fall through the cracks.

Michael Murray: People get busy. We just live in a distracted society. And we can talk about that or we can just deal with it and adjust accordingly. And that's really the only option we have as small business owners.

Seth Peek: If you're going to buy something on the internet and you go to a website and say you're buying an appliance, this is a perfect example, because I just outfitted a kitchen for my house. And sometimes you have to click and put in your zip code and put in all the stuff and then you maybe will get a price or someone will send you a quote. It's frustrating. Or you go to Lowes.com or Home Depot.com and just, there's the price, boom, reserve it in the store. If painters will go to a house, they'll measure everything like, all right, well, I'm going to go sit down at my computer and then I'll email you in a day or something your quote. I got to make sure my figures are all accurate so you get an accurate price. To me, I'm just like, what do they think customers think we do? Go back and conjure spells on our desk and we're like, maybe this fascia board is different than the one from last week and maybe we should paint this door with an HVLP cup gun and I got to figure out how much lubrication oil goes in the piston. So I need to make sure that's in my quote. But most of the time when you're painting a house, I can see, yeah, you're painting a Target. Maybe you need to go sit down and figure out some more stuff. But if you're painting a house that's under $30,000, there's no reason why you shouldn't be able to just run the measurements, look at it, take pictures, count everything and give them a price. Customers love it when you're like, hey, here's the price. Hey, I'll see you later. I'll follow up with you since we didn't close it. Yeah, they love it.

Jon Bryant: Yeah, it's shocking actually when for us, we've templated everything and everything's pretty quick. And so our guys will get an estimate out. They'll be walking around the house in 10 minutes, measure everything and come back and like, here's your price. And the person's like, you just guessed. Like, actually, no, we've fully priced out this job. It's like, how'd you do it? It's like, well, I'll show you. My brother does this all the time. He closes at an incredible, he wins at an incredible rate. He just brings up the estimate and is like, here it is. The person's like, what? And it's almost like this magical experience. It's more magical than conjuring the spells, surprisingly.

Seth Peek: Yeah, conjuring spells.

Michael Murray: Yeah, it's a measuring wheel or a laser measure and some computer software. It's the experience that most people actually expect from everybody else except for a home improvement industry.

Seth Peek: Yeah, but if you get a garage door guy come out to your house or a solar person come out to your house, they're going to tell you how much it costs before they leave. It's the age old thing. We learned from our sales coach, we're in the Cardone ecosystem with Grant Cardone, 10X. You have to provide someone a price when you're in front of them. If you're like, wow, thanks for the consultation. I'll talk to you later. I'm going to leave now. And then when you think about everything that just has happened. So I'm going to call you back with, remember all that stuff we talked about two days ago? Do you remember all that stuff? All right. So now we're going to go over how much all that stuff costs and they're going to go, they don't remember all the cool details you told them. It's better just to go and show it to them. But I had two guys I was on a Zoom call with yesterday that they just onboarded with you guys. And they were asking me about building a quote. So we went off these pictures. And we just went off of my basic production rates, totally just doing it off of, all right, Skylar, what about this? How big is this? How many windows are there? How many doors are there? What's the railing like? Is that stained? Is it painted? And we just built the quote and it was within $300 of the quote that he actually provided the customer using his old system. And I'm like, there we go. It's not like we're just guessing. And you give a lot of old timey painters that say, I don't need a software. I just know what to charge. Great. Well, how do you train someone how to estimate something if they don't know everything that you know? It's production rates because that's how long things take to do. We're not guessing. That's how long it takes to paint a baseboard, 20 linear feet an hour. That's what it is.

Michael Murray: It also makes you actually have a business that's worth owning, also known as worth selling. You just mentioned these old timey painters that, it's actually sad if somebody still feels that way that the only way to do an accurate estimate is to have just done this for 40 years.

Seth Peek: And I'm not saying the old timey painters, I'm not saying anything against in terms of what you know and what you do. I'm just saying if you're talking about progressing forward with getting estimates and making higher sales rates and just getting things done, there's no other way to do it.

Michael Murray: Well, it's also like, this isn't unique to our industry. It's also what every other industry does. Certainly all the professionalized ones. Can you imagine Amazon doesn't have unit pricing? That wouldn't make any sense. They don't know how much it costs to produce and ship per unit per box, things like that. They just guess. It's just a wild approximation based on all their experience.

Jon Bryant: No, it's one guy sitting in the back and all the orders go to him and he's just like, yeah, five dollars, ten dollars. He's doing this thousands of times an hour.

Seth Peek: If I go to meet someone selling a house, they had three realtors coming over to give them a listing presentation. I'm going to go there with the listing agreement pre-filled. I'm going to go there with a six page comp so I can show them what I'll charge for their house. I'm going to go there with a list of questions. How's this going to be a great experience for you? What is your net proceeds goal for this house? How long do you want to be in escrow? All these questions. So that at the end of the presentation, I'm like, you don't have to meet with so and so from Keller Williams. This is my commission rate. This is how much I'll charge for your house. This is how much you'll get. What do you think? This is my marketing package. I'm not going to go there and be like, all right, it's been great meeting you. Let me go home and figure out how much to charge for your house. I don't know. If you go to a car dealership and you're touring around, the guy's walking you around showing you cars. I like the Lincoln Navigator with this package. He's like, all right, just go home. I'm going to figure up a quote and then you can come back tomorrow.

Michael Murray: I don't let you leave. Yeah. I lived that experience two weeks ago. I bought a new truck and it was just like, I went there and I said, hey, this is what I'm looking for. Can you guys help or not? And it's like, this, that, what did you show? You don't want this other? I'm like, nevermind. See you later. I'll just go to the next dealership. It's 15 minutes down the road. And I did. I went to five dealerships and they're like, yeah, we have what you want. It's like, great. Get out the paperwork.

Jon Bryant: I've actually heard even the best way to buy a vehicle, I know this is a bit of a tangent, but is to actually just call all the dealerships. Don't go there and just say, here's the truck I'm looking for. What's the price? I'm going to show up with this check for that amount. And I want to just take the vehicle. And they're like, well, we can't do that. It's like, well, I guess you lost my business, sorry. And so it goes that far where it's actually, we need to know the price upfront. We need to know what we're dealing with so we can have a real conversation with the customer. Because I think what I'm hearing is that when we go use this method of, we'll get back to you in two days. Now they're going to ghost you, they're going to do whatever, they've made a decision, blah, blah, blah. They don't remember whatever. We've actually moved the stage, what could be a one stage process into probably a three or four stage, which no one actually really appreciates because they don't have time. Like you said, Seth, it's busy customers, the customers we want to deal with, the people that actually can afford us, because they're quick at making decisions, this kind of stuff, they want the price. Let's talk about the price and then let's talk about the value. If it's a fit, great. If it's not, whatever, move on. I 100% agree with that mentality. So yeah, go ahead, Michael.

Michael Murray: I have a question. So Seth, let's go back to this 48 hours. A couple of quick things. How many quotes per day does your sales rep do? And how long does one appointment typically take?

Seth Peek: Three to five, maximum maybe five. I would say three is probably average day. They take an hour or less. Most of the time they take 40 minutes or 30 minutes or less. And everything here is like 40. If you're going from, it's very common to leave an appointment, go do some follow-up calls for a half an hour, take a half an hour to get to your next destination. Sit there for 10 minutes. Do some other follow-up emails. There's a lot of our process and our sales that happens on the go. Prospecting, dropping by. He does, we do a lot of prospecting. We do a lot of bootstrapping. We do a lot of stop by, say hi, pop by, bring coffee, property managers, go to networking events. So our salesperson, me and my sales guy and the one I just let go Stephanie, we're always out in the community. It's not just waiting for leads. We're self generating all the time. So that's definitely an expectation.

Michael Murray: Which is awesome and would certainly I'm sure people want to hear more about that. But just to emphasize that point, somebody listening saying it's impossible to give everybody a quote in 48 hours. The only way I could do that is running ragged or whatever and you just prove that not necessarily. We're just not taking two or three hours to do a quote. To your point. It's like if you had to go to the customer's house, spend 30 to 45 minutes there, then come back to the office and put together a code for two hours and then go and repeat that, that would be a system that you would have to wait a week or two to get an appointment.

Seth Peek: Right. The most we're doing is 15 minutes prior, the day before or the morning of, we'll go on Zillow, we'll go on Redfin, we'll look up the house. If there's any recent photos of the inside of the house, we'll start just making quick notes just based on the pre-qualification call with the office or we'll call them. If it was an instant book, then the salesperson will call them and be like, hey, Mrs. Carruthers, says here you want interior painting. We're doing the whole inside. Well, that's to be determined. All right, great. So I just wanted to make sure that I knew that it could be the whole house. You kind of get that feeling of what they want to do. And then you can preload the template. So the templates already on the customer contact on PaintScout. And then we open it before we, we try to open it sometimes because we're in some dead zones around here. So we can actually use the program, which is cool when there's no cell signal. And so we have it preloaded there and then knock on the door, 9 a.m., we go for it. But yeah, it's the whole process, an hour and 15 minutes. And then if you don't close it, then it's a five minute phone call once every week or two for the follow up until someone says yes or no. It's very low impact.

Jon Bryant: Can it really be that simple Seth?

Seth Peek: It can. And you can have a salesperson that's closing over 50% at a really good dollar amount per hour. It can be very simple with the right salespeople. Self-generated, the painting industry, I don't know much about other trades industries, but I do know for a fact that the painting industry, we coddle our salespeople like they're, we dispatch them. They get quotes on their calendar and then they go to it. They're almost like robotic. I have a quote now, I'm going to go do a quote. It's like we should treat all our salespeople like they're selling aluminum door to door or they're a real estate agent where it's like, you don't eat if you don't sell something. They have to be going, going, going. If your salesperson is sitting and like, I don't have any quotes today. My boss doesn't provide me enough quotes. And I hear this from different painting groups. So like, how do I get my guys more leads? How about you just train them on how to encourage them, how to create their own leads, because they're going to get a better closing ratio from a self-created lead anyway. So our salespeople should be hungry. If they're making a commission, they should be generating. They should be generating leads, but they should also be making their own networking. So I think that, I don't know, I go off on a tangent like that. It's the only industry I know that salespeople don't have drive. They're just waiting for their calendar to ding.

Michael Murray: Order takers.

Jon Bryant: Yeah. It's interesting too, because I resonate with the approach you have, because that's what we do too, which is that I don't want my sales reps to have too many leads given to them by the office every week. Cause I want to open up time for networking where they're going to make better connections, get bigger jobs, win more often. But it's definitely hard. I know Michael and I have talked at length about this where it's just like, can we culturally get that drive? I feel like hiring sales reps is one of the hardest things that we do is try to find those people who are willing to learn. Whereas other industries, I don't find that's the same thing. I don't know. People, they find sales reps easier, it's easier just like, hey, you're not making it, let's move on to the next person. Cause sometimes it feels like it's pretty scarce out there. Do you guys feel that?

Seth Peek: I never, I make it a real, some people say I have my head in the sand, but most of the time I look at things like I have no other option than to do well and to go forward. So I don't really think about what's not. I feel like it can be self-fulfilling. When you say, I can't find help, I can't find help, I can't find help. And this is a really cool thing that Slavik does. It's like, there's great people out there, focus on the great people that are out there, not focus on, I can't find help. And with the salespeople too, it's like, I've had three, four. Until two years ago I did it all. But my current one, he was a paint rep. And the other one, she was a solar salesperson. Yeah, I don't know if we want to go too far into how to find a good salesperson, because I don't have a ton of experience with it, but I have a pretty good experience with motivating people and setting goals and being the encouragement, being positive about it, being ambitious.

Michael Murray: Yeah, I think it can be a hard job. I think there's some difficult parts mentally of doing sales. There's the separating your identity from your results is can be challenging in that type of a role. And it can be a lonely job. You're out on the road, you're meeting with customers, but it's like, you don't get the same interaction that you do on a crew or things like that.

Seth Peek: But you do if you're going to lunches with people, you're eating out with people, you're going to coffee, you're in a rotary club, you're in a networking group, you engage with people in the public, you say hi to your barista, you memorize everybody's names, you become the popular one in town. Everyone knows the builders know there's the annoying guy, Eric, coming into our office again. But he's fun, he brings us coffee or whatever. You have to just be the guy.

Michael Murray: Yeah. Well, I think you just kind of touched on it. It's the unfounded fears. We all have it. And I think for a lot of people doing a random stop in at the real estate office or the builder or whatever, with some coffee is maybe an intimidating thing if you've never done it before. But what I hear you saying is, first of all, there's nothing to be worried about. And second of all, it can be really beneficial.

Seth Peek: Yeah. But the magic happens outside your comfort zone, no matter what in life it is. And if people, it's difficult. I had to give a speech Tuesday night because of my political race. And I had to go in front of 40 people of my political party of the central committee and then try to get endorsement. It's like, I have to go talk in front of all these smart political people about how unpolitical I am, but I'm trying to figure this out and you have to do it. But once you do it, it's like, boom. Magic and all of a sudden next time I have to do it, I'm going to know exactly how to react. And so when it comes to cold calling people, I think it's harder to cold call someone on the phone than it is to open the door and be like, I'm Eric with Peek painting, want some donuts? I mean that's a lot easier than cold calling someone and getting hung up on. People are a lot less likely to slam the door in your face than they are to hang up the phone. But everything's hard till it's not.

Michael Murray: Yeah, choose your hard. Yeah. It's also hard to not have enough work or not have enough commission or all the things. At some point you just have to say, we're going to go hit our goals, even if it's maybe not easy.

Seth Peek: Do you guys pay your commission immediately after the sale?

Jon Bryant: No.

Michael Murray: We do not. We pay a monthly bonus. So if we hit our goals for the month, we pay. And then everything over that, they get an additional commission. So but it happens on a monthly check.

Jon Bryant: Yeah, we pay when the project's done. What about you, Seth?

Michael Murray: So we don't wait for the project to be done to be counted, but we also don't pay a week or two after the sale's made necessarily.

Seth Peek: We were encouraged by my sales coach, Don Smith with True Expanse. We'll plug there, Don. I know you'll probably watch this because I'll send you the link. He said, you have to hook people up immediately for the gratification to be like bam, bam, bam. You can have an agreement saying that if the job gets canceled, that draw comes out of their check. But we started paying out the week after the deposit's paid. If Eric or Stephanie sold a job on Thursday for $10,000, then next Thursday, if the deposit's paid that same day, then the next Thursday on their paycheck, they have $600 in their check, 6% of revenue. And it's like, well, if their commission's not based on gross profit, then I kind of, it was hard for me to figure out, well, why would we wait till the job's finished? Because they're going to be more like, I just sold this job next week, I'm going to get 600 bucks. Let's go, where's the next one? And they get that money fast and so it's more motivating. That was impressed upon me. The jury's out, but Eric seems to really like it.

Jon Bryant: Has it been working for you Seth? Have you been doing this for a little while now or how's it going?

Seth Peek: No, it's the summer. This summer we switched over to doing the immediate payout. But the problem I had was, for instance, when Stephanie decided to go back to solar, she had a lot of outstanding jobs, 15, 20 outstanding jobs that were going to happen between August and October. And it's like, all right, well, I guess we'll just pay all those out in one big chunk. So it's the idea of when we're really successful and we're booking out three months at a time, which happens, right now we're booking end of October, early November, the sales person selling it going, all right. That's cool. Made a sale, but I don't get the money for three months. It's just, it's almost the idea of when you're at a meeting and the guys expect a bonus for certain things, certain behaviors, they just expect the bonus. It doesn't become as much of a driving force as if you make the sale and then you get the money right then. We'll see how it goes. You can ask me again in a year.

Jon Bryant: Yeah, yeah, because that situation of someone leaving, that's my concern, but yeah.

Michael Murray: I mean, I would say in general, I lean towards agreeing with that as a concept of don't wait to pay somebody because it can be demotivating. If I want to, I don't want to separate the activity from the reward too much. Cause otherwise then we just forget, wait, what was this for? And it can definitely be demotivating. So in general, I agree.

Seth Peek: Especially if someone's new working for you and they're going to wait two, three months before it. You can do a draw system, but it's like, I don't know, just give them the money. They sold a job, give them the money. They did perform their act.

Michael Murray: Yeah. We operate off of salary plus bonus plus commission. So it's slightly different. Somebody, it sounds like Seth, do you guys do basically just 100% commission with the draw or is it, or do you have a salary?

Seth Peek: No draw. No, just 6% revenue.

Michael Murray: Yep. Yeah. So it's just, again, I don't think there's a right or wrong. I do think at similar production rates, it's like, you've got to figure out what's right for you and your company and your culture. And if I was doing 100% commission, like you guys are, I would tend to lean towards pay that out as soon as possible.

Seth Peek: I don't care what a rock star salespeople are doing in between quotes, as long as they're making sales. And so I felt like I did do a base plus for my first salesperson. This is three years ago, two and half years ago. And I felt like I resented him sometimes more because I would wonder what he's doing all day. And if I'm paying you $20 an hour as a base salary, you should be doing the X, Y. What do you mean you got soccer practice at three with your kid? I'm paying you full time. You can't do it. It became this thing where it's like, a good salesperson, in my opinion, if I was in that role, I'd want 100% commission. And I'm not saying you should, it just works for everybody else, but I want to attract people that are like me because I want them to be able to jive with who I am. And I feel like people that are 100% commission are more on my level in terms of just hungry, get it, make some money, move on. I'm a realtor as well. So it's like, you don't get a base salary. I mean, I own the brokerage, so it's even worse. You pay for all the insurance and you pay for all the fees and everything. But if we bring a realtor on for us, it's like, I want them to go, I need to sell a house so I can make some money. I'm not going to give them a salary and then be like, dude, where are you? You're 15 minutes late. Well, what do you, you can't take another day off. You already had two days off this month. It becomes a resentment for me. I'd rather just people produce and make money that way.

Jon Bryant: Yeah, I think it's a very fair point. And like Michael said, I probably lean towards that too. We ran into problems with just cashflow management because of our climate, we've got interior, exterior season. And so you might sell a job. We had this scenario this year where someone sold a million dollars of work that wasn't going to happen for 10 months. So from the cashflow perspective, it just was like, look, we got to pay this out when the job happens. Cause we can't get a deposit on that.

Seth Peek: But why don't you just pay the commission out of the deposit you received?

Jon Bryant: It was commercial work. So it was a little...

Seth Peek: Okay, that's different. We don't pay upfront for commercial and GC work.

Jon Bryant: Exactly. That was, I mean, a point and maybe an important distinction is GC, that kind of work. If you get the deposit, you're good. But if you don't, you're just like, we can't float this for you.

Seth Peek: Yeah. Some GCs, some of our custom home builders, they'll pay us a deposit if we ask for it, but we have such a good relationship with three of them that we don't do it. And it's a clear understanding, we know that if we're bidding off blueprints and then we submit the bidding, it's accepted, it's not a big deal. We're doing enough residential repaints to where not having that instant commission is not going to make or break. But yeah, no, I should make that distinction for sure. If we don't get a deposit, they don't get a commission.

Jon Bryant: Gotcha, gotcha. That's cool. Yeah, so that's important. And has it worked out okay with, was it Stephanie leaving, jobs are still happening or any issues there?

Seth Peek: Yeah, yeah, it's actually nice because Eric's really hungry. And so now he's getting more quotes and then I'm stepping in and doing some. So it was a weird start to the summer. I think talking to a lot of people, it's kind of a weird start in terms of lead flow and just customers pulling the trigger. Not so much to sign up to do the work, but to get the actual appointments was more difficult. And so when we went down to two, one estimator, one salesperson at the end of July, it really opened up the floodgates and now he's just rocking and rolling. We're getting a lot of bookings this last couple of weeks. So it works out. He's really hungry to work his butt off.

Jon Bryant: Yeah, cool. Very cool.

Michael Murray: Seth, so you mentioned a minute ago, you have your own real estate company. I think it'd be cool to hear more about that. One, how do you balance owning a painting company and doing other things. You're running for office, all the stuff. But also how has the experience with the painting company helped in some of these other ventures that you're doing.

Seth Peek: Well, running a painting company, especially in the startup phase is really, it takes a lot of energy. It takes a lot of drive. And I feel like if you can get through what some would call death valley, like $750,000 to $1 million in revenue on a painting company. And then you're operating a decent company after the million dollar mark. Then you really can do whatever. You've proven to yourself that you really can manage your time well and work hard. Some people, they get burnout. I wouldn't say I get burnout. Sometimes I have to reset for half a day and I just won't do anything. Or I'll just go, we'll go golf with someone or whatever, but it's just a matter of, I've always been kind of, I latch onto things and I just go for it. And it's hard to explain cause you can't really, I can't really explain how to have more grit and determination to somebody that doesn't have it. I don't know what your question really is. How do I balance it? So now we're at a point where I'm not the one running every facet of the painting company. We have an admin, we have my brother, he's operations manager. I'm sales manager. I receive finances. And I was a sales person full-time. Once I got off the booking calendar, it was a lot easier, but I've been a realtor for three years, but I would mostly just take clients as I got them or I marketed or I networked and I got a new client. I would just fit them in wherever I could. Now it's sort of half and half. So I might be in both. I'm in my real estate office right now. I was in the other office until 15 minutes before our call because it's busier. I wanted to come over here for the call. So I'm back and forth. They're two miles apart, but half of my efforts painting, half my efforts real estate on any given day and city council, I'm rotary president, chamber board, all those other things just fit in. And I kind of see them as networking. So they are part of both jobs anyways. If I go to a chamber mixer, I go out to dinner with a bunch of people. I see everything as an opportunity, not so much to take advantage of my friends, but more of an opportunity of how we can better serve each other. Because there's really no, there's no balance. I don't think balance is a real thing. Everybody says, you should have work life balance. I really think that survival as a human being is dependent on how much on a daily basis you can look out for yourself and your family and your friends. And so even on my days off, I would go surfing or golfing with Dylan or my CrossFit gym. Inevitably, one of us is talking about our business or our line of work and you're just constantly doing something. So the easy answer to all that is I have no children and I'm almost 40. So I have a lot of time. I know when I tell people, I have no children, that explains it, but it doesn't. Because I know people that don't have any kids that are lazy as I'll get out and they always say they want to change and they never change and they want to grow a business. And then they just go end up going out and drinking two nights in a row. They're hammered wasted. And then they hung over on Sunday. Then Monday's a slow drag. And so if you don't have self-discipline and drive, you can't get anywhere and starting and running a successful business and starting another one and then doing other things. It requires you to be 100% on all the time in terms of if you need to do something. So it's just a matter of always being on, but still having pockets of fun in between. It's all fun though. I mean, I enjoy what I do.

Michael Murray: So I'm going to change gears a little bit. We're going to start landing the plane here. We've been talking for a little while. I know you've got probably a lot of golf to go do and all these fun activities without any kids. John and I have no idea what that's like. So you've been doing this stuff for a little while. You mentioned your family, your history. We see you at all the PCA events and things like that. Where do you think the industry is headed? What kind of changes do you hope to see or do you anticipate seeing in the next three, five, 10 years?

Seth Peek: Well, I'm trying not to be influenced by what I hear everybody else say online. The idea of we're in a roll up stage and everyone's going to consolidate and everyone's going to get gobbled up. Could be. I think what we're seeing is, I'll let you know what I'm going to do. How about that? So Peek, I think you're going to see a lot of companies like mine where it's going to be multiple companies that are kind of under one umbrella, one service, one offering. You have companies like Amazon. Jason Paris has it right. So Aleph has Paris painting, Paris roofing, and then they collect painting companies too. But I think that successful painting companies moving forward are going to be strategically aligned with other trades because painting by itself to a certain degree, unless you're going to industrial commercial, I believe even in some larger markets, you're going to have a cap. You can do multi-locational, like you see with like, I don't know, the example of A1 garage door, he's got locations all over the country. You might see that, but I think that I don't really see painting being something large like an MEP company, mechanical, electrical and plumbing, because those can be huge, huge government contracts. They're infrastructure based. Painting is still very often a wants over needs base. So I don't see it being a large behemoth like HVAC or MEP kind of, but I really think that the successful painting companies will align themselves with strategic partners. I just so happened to own one, Peek Realty. We might have Peek home design center or design and home design in Peek family businesses where you're going have little arms, but it's all in one umbrella. You might have a roofer that is aligned in a partnership. Here locally, you might have a network of partners that share in some sort of scheme. I don't know. That's kind of what I'm thinking, Peek family businesses and have different arms in the future. But as a whole, I don't know. I think a painting is one of those things that's always going to have trucks and trucks and they're always going to survive because there's always going to be people that since it's a want more than a need often, they're just going to go with the guy that's more affordable. They don't care if it's less professional. I don't think we're ever going to see that go away. Like we have with mechanical.

Michael Murray: Yeah, I generally agree. I would argue that even in HVAC and plumbing and stuff, still, even though you have $50, $100 million businesses, you still have the truck and the truck in those industries too. But yeah, there's a lot higher percentage of the industry is being taken over by the bigger outfits and private equity backed companies and things like that.

Jon Bryant: Yeah, I mean, we've talked about this before. A lot of it has to do with certification or licensing and liability at end of the day.

Seth Peek: Yeah, California is pretty tough to be a painting contractor if you want to just start a company. So it's not so much of an issue. I think that we have, I see in other States where it's the guy next door all of a sudden has three subs and he's never touched a brush. And all of a sudden the company's running and it's like, how does that, how do you compete with someone who doesn't know what they're doing? And they're charging $50 an hour, but they got a branding package on their trucks and everything. And all of sudden they're just out of nowhere. California, it's pretty obvious, legitimate, if you're legitimate or not to a customer.

Michael Murray: In California, you cannot, there's no such thing as using subcontractors to paint for the painting company, right? In California.

Seth Peek: Sure there is. My dad operates subs because my dad's a licensed painting contractor. And then the two guys that work under my dad, my dad gets them set up on jobs, they have their own painting contractors licenses, but they're all 60 some year old men that have known each other for 50 years, 40 years. It's not common. I know Ron down in LA, Paint Tigers, he does a sub model. I think he finds people that are licensed subcontractors and he does it like that. It's definitely more challenging to find licensed people that will only want to take 50%.

Michael Murray: Right. Got it. Yeah, that license is the key to John's point earlier. Makes sense.

Jon Bryant: Yeah. And I think as it gets more difficult, California is an example, but I think that difficulty breeds more need for professionalization because here in Canada, we have to get certified to do certain commercial work and that certification is difficult. And so the only people that get it are the people who are actually professionalized and therefore those become valuable companies because they've managed to get to the professionalization stage where they can actually get the work. And in a lot of cases, there's just not enough barriers yet. I hate to say it, but the industry is just, it's still the wild west in a way. And until it starts pushing, that's my feeling at least. So I agree with you.

Seth Peek: I think that we're in a vacuum. We're in the paint industry, but there's a lot of industries that are in the wild west. I mean, there's a lot of home services, home cleaners, landscapers, window washers. There's power washers. Those are painters, gutter cleaning. I mean, there's just so many things that are in the same boat that we are, but we think that we're in this painting is just this wild west thing, but it's like, I think home services in general, unless you're infrastructure like MEP, we're all wild west. Unless we're building homes, we're carpenter that's building a home. Just your random carpenters are probably, I would say even less professional than painting companies. Some guy that replaces fascia on a house and rolls around in an old Ford Ranger. It's going to be the same thing. So I think anything home service wise, more than half of the service providers are unprofessional.

Michael Murray: And I think there's always room at the top there. Going back to how we started this conversation, when you were talking about your use of technology in your company and the 48 hour guarantee and things like that, that's what makes our industry go forward. I think that's becoming more and more of the future of the industry and it's happening at a quick pace. It's only going to happen faster and faster with artificial intelligence and things like that. Companies out there that are still doing a paper quote or something along the lines of that, where it's like, I just walk in and I've done this before. And I know that this room costs roughly 450 bucks. And if you want to quote, just fill out a form on our website and somebody gets back to you eventually. I think those companies won't exist in five to 10 years from now. There will still be the Chuck in the truck who the only way to get ahold of them is, you just know somebody who knows somebody and you just text them and they text you back a price. But it's that middle tier I think is going to be replaced.

Seth Peek: You know what? 45 minutes and we didn't talk once about production rates. I feel cheated.

Jon Bryant: As you should. I've got five minutes. So what do we, what do you know Seth? Hit us.

Michael Murray: Let's talk about production rates. Never heard of it.

Seth Peek: Make them simple. Make them simple.

Michael Murray: Who are you talking to when you say that?

Seth Peek: I'm talking to people that have 16 production rates for different kinds of drywall or they're over complicated to the point where it's like, this one's 105 square feet an hour. This one's 115 square feet an hour. This is 120 square feet an hour. This is 125 square feet an hour. What are we talking about? Are we talking about 15 minutes of difference? Just make it average. If you have a fast painter and a slow painter, just make it the 75th percentile of the gap. Bring the slow or the other way. So bring the fast painter, bring them down, slow them down, because the slow painter is going to bring them up. And in the end, they all equal out. And it's funny is that you have seven crews like we have right now, and they all get the same quote. It's not like we favor, this quote's for this team, because they're faster than that team. We priced it to be more competitive. So that has to move fast. No, we just price it the same. And then they all got to do the same no matter what, wherever the chips fall. And then they all get it done and guess what? They're all finishing around the same time. It's amazing. So just make them easy. You can make it complicated and you can make it as easy as you want, but the easier it is, the easier it's going to be to make the quote. And you can always tweak it a little bit. It doesn't have to be overly complicated.

Michael Murray: Preach.

Jon Bryant: Yeah, I mean we talked about this all the time. It's people get hung up on that, I got to get it perfect. And I think we've talked about this before where it's actually this long-term view of business where the end goal actually is what matters. I think it's called the Peter principle where the end goal is what matters. Now you don't want to run people through the gauntlet and be like, okay, it's ten minutes and it's actually an hour. That's not fair. But if you give people a goal, the plan is what matters, the destination and the plan. And so, and then if you look at this over like you said, the seven crews over the year, guess what? Your business works out. It's strange. But if you focus on that piece of fascia is going to be 15 minutes more and I can't get past that. my goodness. It's going to be painful to build a business.

Seth Peek: Yeah. And another tip, I think I might have talked to you guys about this last PCA event. If you know, definitely a couple other guys, but if you have regular standard prep, just bake it into the actual painting production rate of the surface. You don't have to train someone to count every pinhole in a wall. Standard prep is all included in the drywall painting production rate. And then you can have a line item or an area, a production rate says heavy fascia prep. And what that's going to do, it's just going to add a linear feet of prep for the fascia. So it's going to be like, if it's heavy prep, then it's an hour every 30 feet of prep extra. So I figured that out after a while. I was like, I've got too many line items in my quotes. Why don't I just include, I think John Ray was actually the one that told me that's the way he did it. Just if it's basic prep, just include it in the standards. So then we just have power washing, masking, and then painting and all the minimal basic prep is just in all the painting line items. But there's been five or six guys in the past two weeks that have told me they're switching over to PaintScout and two of them we met on a call yesterday and I let them borrow my production rates from you guys. One of your awesome staff ported it over there.

Jon Bryant: Dude, Seth, it's amazing, man. And we should have another conversation specifically about production rates because I know you get it. And that's fun just to dig into that because yeah, simplicity is what matters. Using something like PaintScout to really drive that, get your price on the spot, serve your customers. This is what people need to hear. And I think we should keep chatting about it. So probably a good spot to wrap it up today though. So Seth, thanks for being with us. Really appreciate having you, always good to chat. And yeah, guys, thanks for tuning in to the Price Sell Paint podcast. This is always fun. Any comments, questions, leave them in the comment section and we'll be happy to check those out. So thank you very much and as always have a great day. Thank you Seth. Take it easy.

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