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An Insightful Guide to Outshine the 80% Business Failure Rate

The sobering reality is that about 80% of small businesses do not survive past their fifth year. An overwhelming majority fizzles out in the initial year or two. This article aims to share insights and strategies to help painting contractors lay the first brick on the path of business survival and prosperity. The goal is not just to be part of the surviving 20%, but to build a robust and flourishing business.


Understanding the Gravity of the Situation

The 80% failure rate is daunting and even those that are still in operation after the initial five years face their own struggles. Many have accumulated substantial debt, made minimal progress in their personal income, and find themselves in constant financial pain. As you embark on your business journey, understanding these harsh realities can help fortify your strategies and keep you focused on your goals.


Clear Vision and Goals

The antidote to unnecessary struggle lies in the clarity of what you genuinely desire. A significant mistake that many businesses, including painting contractors, make is the lack of a well-defined service offering. Offering everything to everyone often leads to a lack of focus and diminished success. The clearer you are with your services, the better your understanding of the leads you need, the jobs you have to secure each year, and the income you wish to earn. Setting tangible targets instigates your brain's reticular activating system, which helps you to find and focus on what is important.


Three Pillars to Building a Successful Painting Contracting Business

To help you gain clarity and understanding, we will discuss three pivotal areas of your business: personal income, service focus, and lead generation.


1. Oxygen - Your Personal Income

In the world of business, personal income is your oxygen. It's what will keep not just your business, but also your family alive and thriving. Determining the exact amount that you need to bring home is critical. In my personal journey, I started my painting business seeing the potential opportunity, but without any clear plan of how much I needed to earn and what I needed to bring home. Understanding your family budget and how it translates into your business sales and the profit you retain can make a significant difference in your success.

Many business owners neglect to pay themselves adequately, ensuring everyone else is paid while they remain unclear and uncommitted to their own income. By determining how many months you could sustain your home front if your business were to start today, you can better understand your financial standing. Ideally, you should have three to six months of home-front money in the bank. This safety net can help you be bolder in your sales process, sell your work at a higher rate, and maintain a level of financial stability in the face of fluctuating business conditions.


2. Planting Your Flag – Focus on a Specific Service

The second area to concentrate on is defining where you will plant your flag – what service will you commit to providing. Becoming known in a smaller niche can often lead to greater recognition and success. For example, if you are a remodeling contractor, you may want to focus on bathroom or kitchen remodeling. Even as a painting contractor, you might want to concentrate on interior painting alone. Being known for a specific service does not restrict you from taking other opportunities when they arise, but it means that you invest the majority of your marketing time, money, and messaging in promoting this particular service.


3. Lead Generation – The Lifeblood of Your Business

Lastly, the third area is lead generation, which is often underestimated by new businesses. A common mistake is relying on initial support from friends, family, and local community when starting. This initial support often wanes, leading to a decline in business unless you have invested time in building a robust lead generation system.


Understanding how many leads you need, how to market your business, and how to build relationships within the community is vital. The key is to set sales goals, calculate your average job size, and then determine how many leads you need based on your closing rates.


Conclusion

Starting a painting contracting business is an exciting yet challenging venture. By focusing on your personal income, specializing in a specific service, and generating a steady stream of leads, you can be well on your way to surviving and thriving beyond the initial five years. With clear targets, dedication, and effort, you can build a successful painting contracting business that stands out and excels where many others have failed.


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