A good paint job can transform a room, but a poor-quality job can detract from the room’s appearance. Painting is time-intensive, requiring attention to detail and a bit of talent, so many homeowners are happy to outsource it to a professional. When you own a painting business, you’ll be responsible for many different projects, from painting a single room to painting an entire home, inside and out.
One of the major benefits of starting a house painting business is that it requires relatively little initial investment. If you have painting experience, a truck, and the money to buy some initial tools and insurance, then you have everything you need to begin what could be a lucrative and enjoyable business.
With the right preparation and guidance, this can be an excellent opportunity to be your own boss and earn a good living, but starting a successful painting business is more than being able to pick up a paintbrush. To help you get started, this guide provides an overview of the house painting industry, steps to get started, and answers to frequently asked questions.
Business Overview
Painting companies commonly provide interior and exterior painting services for residential homes, though commercial jobs are another market to consider. Services generally include preparing surfaces, applying paints and stains, and cleaning up. Companies may also offer specialty finishes like texturing, glazing, distressing, murals, or faux finishes. The industry is dominated by small, independent contractors with just a few employees. Barriers to entry are low since required equipment like ladders, brushes, and rollers means low startup costs.
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Industry Summary
The house painting business is a part of the larger painters industry. According to the IBISWorld painter market research report, the industry has seen a slight decline over the past five years, though COVID-19 is largely responsible for that decline. The industry’s revenue in 2022 was $40.2 billion and is expected to grow over the next five years.
It’s important to note that the professional painting industry is closely linked to disposable income. As homeowners have more disposable income, they’re more likely to hire a professional painter than to complete a painting project independently. With a healthy home buying and selling industry, there can also be an increased demand for painting services as people buy, remodel, and move into new homes.
Steps To Start A House Painting Business
Step 1: Market Research
Starting a business can be challenging, especially in an industry with many competitors. Before setting up a painting business, conducting market research can give new entrepreneurs insights into the demand and market potential for their services and identify existing competitors. Here are some tips to help when assessing a market:
Assess demand and market potential: To gauge the demand for house painting services, look at recent housing trends, new construction projects, and remodeling activities in the area. By understanding the market size, growth projections, and potential customer base, business owners can make informed decisions about the viability and profitability of their venture. Census data and reports from real estate organizations can provide valuable information.
Talk to local contractors and realtors: General contractors, home builders, and real estate agents can provide firsthand insights into the need for more painting contractors in the area. By discussing the volume of construction and home sales with these professionals, entrepreneurs can gather insights into the demand for painting services. This information can help in assessing whether there is room for another competitor in the market.
Search online job boards: A simple yet effective indicator of demand is the number of painting jobs advertised online. A surplus of postings can signal a thriving market.
Identify Competition: Understanding your competition is as important as knowing your customers. Who’s already out there, what are they offering, and at what price? Analyzing your competitors helps you spot gaps in the market that your business could fill.
Step 2: Write a Business Plan
Once you’ve done your market research and gauged the potential for your painting business, the next step is to write a business plan. While the idea of starting a painting business may be exciting, a business plan serves as a reality check, helping you assess the feasibility of your idea. By putting your ideas onto paper, you can evaluate the viability of your business concept and identify any potential challenges or gaps in your plan.
One section of the business plan that is especially important is the financial projections. Here, you project your income and expenses to estimate whether your business is financially feasible. By examining your expected revenue and costs, you can determine if your painting business will generate enough profit to sustain itself. Knowing these figures in the planning stage allows you to make informed decisions. You can analyze whether your pricing strategy is realistic, whether you need to adjust your expenses, or if you should explore additional revenue streams.
Related: How to write a business plan
Step 3: Secure Funding
Even though a painting business can be very inexpensive to start, securing funding can still be challenging. Let’s look at the most common sources of funding that are commonly available to painting businesses.
The first source of funding is self-funding. This involves using your personal savings or assets to cover the startup costs. If your personal funds aren’t sufficient, you may need to explore other funding sources.
Lenders are a popular source of funding. They typically require borrowers to invest 15% of their personal funds towards the total cost of the project, have a good credit score, and provide sufficient collateral. It’s worth noting that if a bank considers the loan too risky, they may use an SBA (Small Business Administration) loan guarantee to mitigate their risk.
Another potential source of funding is friends and family. While this can be a viable option, put any agreements or loans in writing to avoid misunderstandings or strained relationships in the future.
If your funding needs are relatively low, or if you don’t have access to credit through a traditional lender, you might consider applying for a microloan. Microloans are small loans typically provided by local economic development organizations, and some programs also offer business training.
Related: Finding the money to start a business
Step 4: Apply for Business Licenses and Permits
Starting a painting business requires registering the business and making it legal. Every state has different requirements, but here is a general overview of what is needed to register your business:
Choose a business structure: The first step is to choose a business structure. The four most common types of business structures are sole proprietorship, general partnership, corporation, and limited liability company (LLC).
- Sole proprietorship: This structure is the simplest and most common form for small businesses. It may be a good option for those who want complete control over the business, and it’s the easiest and least expensive to set up. However, the owner is personally liable for any debts or claims against the business.
- General partnership: This structure is similar to a sole proprietorship but involves two or more owners rather than just one. Each partner shares in the profits and losses, and personal liability for the business’s debts is shared.
- Corporation: A corporation is a separate legal entity from its owners and can be sued, own property, and enter into contracts. This structure can provide liability protection for owners, but it is more complex and expensive to set up and maintain.
- Limited Liability Company (LLC): An LLC combines the liability protection of a corporation with the easier administration and tax treatment of a partnership or sole proprietorship. It can be a good option for those who want limited liability protection without the complexity of a corporation.
Related: Comparison of business structures
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
Related: Tips and ideas for naming a painting business
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Related: Finding a domain name for your business
Obtain business licenses and permits: Licensing requirements vary by state, county, and city. In some areas, painters will need a contractor’s license, which could require passing an exam and providing proof of experience.
In addition, there will likely be a variety of general business requirements, such as a business license, seller’s permit, and Employer Identification Number (EIN).
Related: State guides for general business licensing
Step 5: Set Up Operations
Setting up the operations for a painting business is a concrete step toward turning your plans into action. This involves tasks like setting up a workspace, obtaining tools and supplies, and developing systems to take on clients.
Your first task is to find a secure a suitable workspace to store your equipment, supplies, and vehicles. This can involve operating from home by utilizing a workshop, garage, or storage area, or alternatively, leasing a facility. It’s important to ensure that the chosen space complies with zoning requirements to avoid any legal complications.
After securing your workspace, the next step is to procure the necessary tools, equipment, and supplies. This might include brushes, rollers, ladders, drop cloths, paints, and other essential materials. Additionally, consider investing in a van, truck, or trailer to efficiently transport your equipment, ladders, paints, and drop cloths to various job sites.
With your workspace set and your tools in hand, your next focus should be on pricing. Develop a system for estimating the labor time, materials, and other costs associated with each job. This involves determining the cost of materials for each type of project and estimating the labor time based on your painting speed. Don’t forget to factor in overhead costs like insurance, vehicle maintenance, workspace rental, and any other operational expenses.
Step 6: Prepare to Launch!
As you wrap up your preparations, there are probably a few remaining steps that need attention. While the specific needs may vary for each individual, here are some common loose ends to tie up before starting:
Business insurance: Protect your painting business by obtaining the appropriate insurance coverage. This may include liability insurance, which safeguards against property damage or accidents, as well as workers’ compensation insurance to provide coverage for injuries or illnesses sustained by employees on the job.
Related: What insurance do painters need?
Setting up bookkeeping: To keep track of your finances, it’s important to establish a system for bookkeeping. Consider utilizing accounting software like Wave Accounting (FREE) or Quickbooks to manage daily transactions, handle tax obligations, and generate accurate financial statements. This will help you maintain organized records and comply with financial regulations.
Hiring employees: If you plan to hire employees or subcontractors, you have two options: hiring employees or working with subcontractors. Employees will be part of your business and work under your direction, while subcontractors are independent professionals who you contract for specific jobs. Regardless of your choice, it’s important to follow all OSHA guidelines, provide training on equipment usage, working at heights, handling hazardous materials, and maintaining job site safety. Also, ensure your team has the proper protective gear.
Contracts: Draft clear contracts for your clients that detail the project scope, timelines, and payment terms to ensure mutual understanding and legal protection. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.
Opening a business bank account: Create a separate bank account for your business to simplify accounting practices and give you a clear picture of your business’s financial health.
Developing a marketing strategy: Create a professional brand identity with a compelling logo and well-designed marketing materials. Additionally, ensure your vehicles are properly marked with company information for increased visibility.
Common Questions When Starting A Painting Business
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and
How much does it cost to start a house painting business?
Starting a painting business requires a modest initial investment to cover expenses like equipment, licensing, marketing materials, and operating costs. The total upfront costs to start a painting business typically range from $2,000 to $10,000, plus a vehicle. Here’s a breakdown of common startup expenses for a painting business:
Business registration: The costs for business registration and licensing vary by state and locality but often range from $50 to $500.
Equipment: An initial equipment investment of $500 to $3,000 covers essentials like ladders, brushes, rollers, paint sprayers, tarps, and more. Larger equipment purchases like spray rigs and scaffolding, which may be initially rented, increase costs.
Location deposits: If renting a workspace or office, expect to pay an initial deposit. Deposits can range from $500 to $2,000 depending on the size, location, and rental policies of the space.
Insurance: General liability insurance starts around $500 annually for basic policies. Workers’ compensation insurance, if hiring employees, will add to this cost.
Marketing: Initial marketing, advertising, and printing costs like business cards, flyers, and website start around $500-$2,000.
It is also highly recommended to have three to six months of operating expenses set aside as a buffer. While specific costs may vary based on factors like rent, salaries, and overhead, having this financial safety net helps you navigate unexpected challenges or fluctuations.
How profitable is a house painting business?
The profitability of a painting business can vary significantly depending on a variety of factors, such as the size of the business, location, and the specific services offered. However, based on industry statistics, we can estimate potential profits.
Revenue: The revenue of a painting business depends on the number of projects completed and the rate charged for each. For instance, if a painting business charges $1,500 per project and completes two projects per week, the weekly revenue would be $3,000. Scaling this to a month, assuming four weeks of work, the monthly revenue would be $12,000.
Expenses: Expenses for a painting business can include material costs, labor, transportation, marketing, insurance, and administrative costs. Continuing with our example, let’s break down potential monthly expenses:
– Materials (paint, brushes, etc.): $2,000
– Labor (if hiring employees or subcontractors): $4,000
– Transportation (fuel, maintenance): $500
– Marketing: $300
– Insurance: $200
– Administrative (utilities, rent, etc.): $1,000
Total monthly expenses would be $8,000.
Profit: The profit is calculated by subtracting the total expenses from the total revenue. From our hypothetical scenario:
– Monthly Revenue: $12,000
– Monthly Expenses: $8,000
Monthly Profit: $12,000 – $8,000 = $4,000
Thus, the painting business could potentially make a profit of $4,000 per month. It’s important to note that this is a simplified scenario.
What skills are needed to run a house painting business?
It doesn’t take a business degree to start a painting business, but certain skills and experience are useful and can make starting the business easier.
Experience with painting techniques and products: Experience with and knowledge of painting techniques and common products used is essential for any painter. Apprenticing with a professional painter can be a good way to get this experience if you haven’t previously worked in the industry.
Attention to detail: Painting is all about attention to detail, and customers will quickly realize when important details have been overlooked. Detail is also present within the business itself, in scheduling, creating project estimates, and even training employees.
Organization skills: Great organization is essential in running a painting business. A business owner needs to manage everything from ordering the right paint for upcoming jobs to managing a schedule and maintaining inventory.
Customer service skills: A painting business owner needs to know how to interact with potential clients well and provide quality customer service. A painter who communicates promptly and who responds to customer questions and concerns can build a strong reputation and may even be referred to other customers.
Management experience: When leading a team of painters, management experience is important. A business owner who has successfully hired, trained, and managed employees or contractors before has an advantage over someone who hasn’t managed a team.
What is the NAICS code for a house painting business?
The NAICS code for a house painting business is 238320, which is classified under Painting and Wall Covering Contractors?
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?
Startup Tips
Starting your own painting business can be a great way to create a profitable business with a minimal initial investment, but the industry does come with some challenges. Painting can be a seasonal activity, and weather will limit your ability to do exterior painting jobs. The industry can also fluctuate with the availability of disposable income, so challenging economic periods can significantly impact your income, too.
Because there are low barriers to starting a painting contractor business, this can be a highly competitive industry. It’s a good idea to research the painters in your local area who are already operating. Look for areas where they fall short or certain services they don’t provide and consider whether you can use them to your advantage. It’s important to find a way to differentiate your business, whether you do that through the services you provide, a reputation for excellent customer service, or some other unique factor.
Painting experience is truly essential in this industry. Knowledge of surface preparation, primers, paints, and the other chemicals you’ll use will allow you to do a quality job. If you don’t have firsthand experience, look for an apprentice opportunity that will give you the hands-on skills that you can teach to your team. Remember that painting is also highly physical, so be prepared to work alongside your team until your business is established enough to have you in a management role rather than a hands-on painting position.
Resources:
Master Painters and Decorators Association
Painting Contractors Association
