How to Start a House Painting Business
A good paint job can transform a room, but a poor quality job can be a distraction and detract from the room’s appearance. Painting is time-intensive, and it requires 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. You’ll also be in charge of managing your team of painters, overseeing each project, and ensuring that the results are work that you’re proud of.
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.
Painting companies most often provide residential painting services to homeowners, though commercial jobs are another market to consider. Homeowners may hire painting businesses to paint brand-new homes, or they may be brought into existing homes in need of renovation or new paint. Some painting businesses focus on just interior painting or exterior painting services, and some will do both.
Homeowners and building owners hire painters because these painting businesses are convenient, work quickly, and do quality work. They also have the resources to tackle tough-to-access areas and challenging projects, like those involving wall repair or wallpaper removal.
The painting industry has undergone recent growth, leading to more businesses and increased employment. According to IBIS World, the industry experienced 4.2 percent annual growth from 2014 to 2019, which was largely prompted by the increase in residential building construction during that time. The number of businesses grew to 323,194, and industry employment increased to 503,130. In 2019, the painting industry was predicted to bring in $43 billion in revenue, and if the housing construction market continues to thrive, the painting industry should enjoy continued success, too.
The painting industry is continuously shaped by home decor trends and the home buying industry. According to 360 Degree Painting, increased awareness of how much color matters in staging a house may prompt homeowners to paint their homes before putting them up for sale.
It’s also important to remember 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 they are to complete a painting project on their own. 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.
The target market for a painting business depends on the business model. Many painting companies target home owners looking for house painting services when owners want to refresh or move from their homes. Other businesses may target developers who build new homes and need painting services for those new buildings. Businesses that offer commercial painting will market to commercial building owners.
Checklist for Starting a House Painting Business
If you’re thinking about starting a house painting business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name for your painting company can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Form a Business Structure
A business structure (also referred to as a business entity) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business structure is best for a house painting business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
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:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
While many painting businesses simply operate out of the owner’s garage, some will need a larger space to accommodate vehicles, equipment, and employees.
If operating out of your home, be sure to check your homeowner’s policy as it may not cover loss or damage to business assets. Also, be sure to check zoning, as just one call from a neighbor may interrupt your ability to operate.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
Some states require painters to have a contractor’s license or be registered in the town they are working in.
Additionally, there may be general business registrations such as a local business license, sales tax permit, Employer Identification Number (EIN), and others that will be needed before starting.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a painting business is another. Fortunately, the cost to start a painting business is low, but it can be difficult to obtain for a new business if financing is needed. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
In some cases, you can get a line of credit from the paint store and use the down payment on the painting job to rent equipment if funds are really tight.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
A painting service also needs to actively market to bring in new customers, especially since homeowners will only have occasional painting needs, limiting repeat business. Many painters market through social media (using Facebook, Pinterest, Instagram, etc.), online marketing (Yelp, Angie’s List, Craigslist, etc.), print advertising, direct mail, and handing out business cards.
Referral programs that encourage clients to refer the painter to new business can also be effective. Marketing costs will vary according to the type and volume of marketing being performed.
One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a house painting business. A few of these include:
– General liability insurance protects the business if customers are ever injured because of the work being done and can cover legal fees.
– Commercial auto insurance covers the expenses that can result after an accident involving a company vehicle.
– Worker’s compensation insurance covers expenses like lost wages or medical bills if an employee gets hurt while working.
The cost to insure a painting business cost can vary on several factors such as the business’ location, the number of employees, and even the value of the business vehicles and inventory. To get an accurate idea of what insurance will cost, request quotes from multiple providers. Then, look at how the quotes compare in terms of factors like premiums, coverage limits and exclusions, and deductibles.
Step 10: Hire Employees
Many painting businesses just start with the owner being the only employee but can quickly need additional help from employees or contractors as word spreads or to complete an occasional large job. According to Payscale, painters earn an average of $16.86 per hour, though that hourly pay rate can range from $11.76 to as much as $25.61.
Hiring employees results in more expenses than just salary costs. Additional expenses can include workman’s compensation insurance, payroll taxes, paid time off, and health insurance contributions.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a house painting business?
In most cases, starting a painting business is relatively inexpensive, especially if you already have a van or truck available to use for the business. Expect to spend about $2,000 on painting equipment, inventory, and other supplies, plus the cost of a vehicle if you don’t have one available.
Some common startup costs include:
– Business vehicle
– Equipment including ladders, airless paint sprayers, caulk gun, brushes, uniforms
– Supplies and materials like paint, brushes, rollers, sandpaper, trays, drop cloths, etc.
– Working capital to cover the first few months of payroll, insurance, fuel, etc.
How much can a house painting business owner make?
While painters can make $16 an hour on average, a painting business owner can make much more if they hire a talented crew of either employees or contractors and build up a business with a great reputation. While hard data on painting business profits isn’t currently available, individual painters have reported net profits ranging from 15 to 30 percent of their income.
About 15%-25% of your costs will go towards supplies like primer, paint, tape, plastic, brushes, and caulking, while the rest is labor. Your exact income will depend on the clients you’re marketing to, competition, overhead, and other individual factors.
Are there grants to start a house painting business?
It’s extremely rare to find a grant to start a house painting business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
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?
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.