From Surviving to Thriving: How to Build a Customer-Centric and Profitable Painting Business w/ Mark DeFrancesco

Contractor Freedom - Break out of Contractor Prison

[00:00:00] Welcome to the Contractor Freedom Podcast. I'm your host, Jason Phillips. This show exists to help small business owners like you escape the tyranny of Contractor Freedom and enter the bliss of Contractor Freedom so you can have the Time, Money, and Freedom to Live Your Life With Purpose Beyond Your Business.

As a certified human behavior consultant in DISC personality styles and motivators, I'll be sharing with you skills for life, love, leadership, and business. I'll also be connecting you with experts that can help you scale your business and your life. So if you want to build the business and life of your dreams, then you are in the right place.

Let's go.

Jason Phillips: Hey friends jason phillips here i'm excited to be with you today live For our contractor freedom podcast. I have a special treat for you today. I have my friend Mark DeFrancisco, all the way from Connecticut, down here in Texas, in Allen, Texas with us here live today, [00:01:00] and we spent the whole day yesterday together, and I want you to get to know him, and think he's got some great things you're gonna love, you're gonna love hearing from Mark.

So Mark, I just want to say, welcome. Thank you very much. I'm glad you're here. We got to send, spend the whole day today, excuse me, the whole day yesterday and and today together. Man, tell us where where are you from? Tell us your name, your business

Mark DeFrancesco: and such. So I'm from Connecticut.

Name of my business is MDF Painting and Power Washing. So we've been at it up there for a while. We do primarily high end residential painting and we do some commercial repaint painting as well.

Jason Phillips: When did you start? How long have you been in business?

Mark DeFrancesco: I've been in business since 95 but really in business since 03, so I had been painting when I was younger and even through college and all that and and then launched out for real in 03.

Jason Phillips: Your clients are residential builders or homeowners?

Mark DeFrancesco: Primarily homeowners.

Jason Phillips: Primarily homeowners.

Mark DeFrancesco: Most of our work is direct to owners and even in commercial, we prefer to be direct to owners where we're doing work for the [00:02:00] university or the assisted living complex or whatever building we're painting.

Jason Phillips: I see. Got it. Tell us tell us a little bit, Mark, about just the basic structure of your company. Who does? Who does the painting? Who does the sales? Who does the marketing and such?

Mark DeFrancesco: Yeah,

so good question. Start with the direct labor of our painters. This has changed over the years.

We've talked about it. I went from being a completely employee based company to a completely subcontractor based company back to a completely employee based company. And so it's been a bit of a Germany, a journey for us. And but now we're all employees and that's the way I prefer it. Is

that typical for your state?

It's a mix. It's a big mix. I would say it's probably very similar to 50 50. There's a lot of, a lot more subcontractors in the last 15 years are being used by more and more companies.

Jason Phillips: And the employee model, I love hearing from that. Because us, my company, we're 100%, or I'm going to say 99%.

Subcontractor model and you're the employee model and [00:03:00] it's they're both great. They both have challenges at the same time There's a little bit different. What

Mark DeFrancesco: so

There's certainly pros and cons of both I think what's been beneficial to me is being able to live and see and work in both like I had subcontractors for a full decade, so it's not like I was new to that or I just tried it out.

The things I loved about it in many cases the subcontractors were, just really qualified. They had their shit together, they could get things done efficiently, they cared about finishing a job and going to the next job. That was the positive of it. The negative that I found was I didn't always have the control that I felt that I needed in terms of just getting things done right now as I need them done.

And in many cases, those subs that I had were like family, they were, they worked with us all the time and they were great, but especially in carpentry. So I had always subcontracted carpentry out as well. And after a while, I was just like, I can't, I needed to work more in unison. And I felt like I wasn't doing enough [00:04:00] of building a team.

And I feel like when I went all employee, The second time in I decided I was going to really build culture and build team.

I see. Big way. Nice.

So like we, I mean we do an employee event every single month and I know a lot of people do these events, but we pull our people on what they want to do, we invite the families like it's almost what am I marketing people?

Part of what she does is just like promo the events. So we're using like direct mail and phone calls and text to

Jason Phillips: your own people,

Mark DeFrancesco: to my own people, to get as much of a turnout as I can to go to the minor league baseball game, to the bowling night, to the crew leaders for billiards with the owner type thing.

And so we do a lot of things like that are awesome and then our weekly meetings. So I was never able to have the type of weekly production meetings when I had subs in, in just in my world that I'm able to have now with these guys. [00:05:00] So that's our path now. But I've taken a lot of things from the sub world like bonus structures, like how I, I call it my payout system.

That's the number one most important thing to make money in this business. Net, net money, in my opinion. And I think I've been able to transfer it in a way into the employee model. Which I think is the key thing for us. I love that you've done that. Yeah, so there's a lot to learn from both.

Jason Phillips: The culture element, also, that you were mentioning. I think you've got something really special going on.

It's cooking. We've got a long way to go. But it's cooking and it's awesome. It's, yeah.

What brings you to Dallas?

Mark DeFrancesco: You. I just, I admire you, and I totally respect what you've done in the business for such a long time.

And in getting to know you in the last few years, just casually at different events, whenever we would chat, I always left the conversation thinking. That's really smart, or I like how he thinks about this because I think we think alike in a lot [00:06:00] of ways. And I always see a person who's constantly growing and learning and trying to improve.

I think it's Tony Robbins is like constant and never ending improvement. I'm a big Tony Robbins guy. And I just see that in how you handle your business, and even just knowing you casually, how you would handle your faith, and your family, and your physical workouts, and your business. It's just not one thing, it's your whole life.

And I think as business owners I'm the bottleneck for my business now. And I was 20 years ago, and I will still be 10 years down the road from now. However, when you make a conscious decision to say, how do I get better every day? I think that's when things change. And for you, I just see it as Hey, that guy's trying to get better all the time.

And that's just we were in Florida or someplace and we, I'm out at the treadmill, it was early morning and you're already on the darn treadmill doing something, and I'm just, so it's not just about painting houses or whatever we're doing as contractors. It's [00:07:00] about life and how you're trying to grow and learn and get better in life is going to have a direct.

I admire that in you and I appreciate you and you've been so open and just, thank you very

Jason Phillips: well. I'm honored to have you here and I feel I talk to contractors all the time and you've, after us spending a whole day together and really just diving in talking about your business and my business, you've got some really awesome stuff going in your, your Your business acumen is on point.

Oh, I appreciate that. And of course we're, I think, we both know a lot and we're both students. And I think that's one of the things that I really, that really struck me when I met you is I'm like, okay, this guy's smart. He's hungry and he's asking great questions, and you can tell by the questions people ask.

And of course, I'm look, I'm growing. I'm, I want to grow my company as well. And we've got, people that are listening or tuning into this podcast. They're like, man, how do I, how do I get to that point where, I [00:08:00] can do these things that Mark's doing, would you mind sharing, would it be okay to ask like what type of top line type revenue you guys are just, or how many painters or something?

Mark DeFrancesco: This year we're looking to hit five and a half million. Nice. So it's primarily paint. We do paint, we do some pressure washing. Carpentry obviously has to be part of it.

I'm up in New England. So you really don't paint an exterior paint job without having some carpentry in place. So we do have carpentry teams. So that's where we are for revenue.

Jason Phillips: Okay, that's absolutely beautiful, which that's not a lot of guys in that realm. And

Mark DeFrancesco: no, but there's a lot more that could be done.

Our market share is so small relative to everything that's getting done. And we all feel that way, right? Yes, wherever

Jason Phillips: you are. Absolutely. That's one of the things I look at my market here in DFW, we've got what, four, four, four plus million people and the amount of gallons

Mark DeFrancesco: of paint that are being spread, it's almost unlimited.

Jason Phillips: Exactly. I've just got, a tiny slice of the pie. So the sky is the limit for all of us.

Mark DeFrancesco: A friend of mine actually [00:09:00] pointed out recently that they talked to the Sherwin Williams in my area in the state of Connecticut and they were trying to pull what percentage of paint is sold in January and February because I'm always complaining about how it's seasonal and it slows down and it does slow down in those months.

But apparently Sherwin Williams still sells a heck of a lot of paint. And I'm not spreading all that paint. So there's

a lot of room to grow. Yeah. Why am I not getting those leads? I guess that's my marketing mindset.

Jason Phillips: I get that. That just, and that's still today. I am like, man, What channel did they get that through?

Because I know I've been on their door, in their mailbox, constantly.

Mark DeFrancesco: It's a constant grind. I started out putting flyers in mailboxes, and doing, going for jogs, and literally putting flyers in mailboxes. And, I'm not an attorney. Don't take that as legal advice. It's illegal to put it in mailboxes.

As long as there were no U. S. Postal Service trucks around, I would slip it in the mailbox. And still, we do a lot of advertising as well, and we, I feel the exact same way. It's funny that you say that. I'll [00:10:00] drive through a neighborhood that's my neighborhood, and then I'm like... Did we get, and I'll call the office, did we bid that 12.

52 Candlewood Drive? Did we get it? Oh, we did? Okay, good. Did they at least call

us?

Jason Phillips: I have done the same thing. So tell me, how do you what type of marketing do you do these days? And how do you get your clients?

Mark DeFrancesco: So we do a lot of different things. I'm still old school with direct mail.

So I do like direct mail. I spread it around. The last I've done a lot of EDDMs every door direct mail so postage is cheap. You can get pretty detailed because you're dialing down to small neighborhoods. Like in our locale, I don't know if all the, I don't know where, what it's like in any other part of the country, but near us, it's pretty tight neighborhoods, like 200 houses, 180 houses.

So those are very similar demographically, you're not going to have a block of 160 houses. Half of them are renters, they're all homeowners. In my area, it's higher end res. They'll all be [00:11:00] million dollar homes, or close to that number. And so they're similar, they're all in our market. We find that works, but we are doing everything from proximities, to saturation, to new homeowners, which we've done for a while.

We do digital like everyone does. We have two agencies that we kind of use. We try a lot of things and we're always watching what works and what doesn't work.

Jason Phillips: One of the things Mark that I see from various painters is they don't invest in marketing. And you had mentioned you spend a set percentage on

it.

Mark DeFrancesco: Yeah. So I'm different than probably most. I'm a little maniacal. Like at one point when I started my business, I would just read every single. Marketing book that I could find. So that's at one point, every winter, I would learn something and one winter was blackjack and counting cards.

One winter, but there was a marketing winter, right? And I just blitzed. I'll read 20, 30 books on something. And so I've always felt like You need to be marketing. And the reason being because there are so many people I meet that are like I don't market at all [00:12:00] and it's a point of pride.

And I just wonder listen, if you love everything about your business and everything's great in your life, then let it be, you shouldn't market. But for me, if I love my business and I feel like we're doing a service to the employees. And to the customers, why would I not want to grow that? Like, why would I not want to expand that to the highest level that I'm capable of doing?

And really, the only way to do that logically is to continue to market. In 20 years from now, we'll be a much different animal as a business than we are now. I hope, MDF painting. And in doing so, I'll still be marketing. And I would actually think it would be crazy for me not to be.

Marketing. Now, of course, I want to, if I could shave a point off of it and save a little here, of course, I want to do that. It's all about getting the best value I can get. for everything we buy.

Jason Phillips: Once you get the delivering of the widget, the paint jobs down, you want to do more.

Yeah. And you're like, you're providing a great service. Exactly what you said. [00:13:00] How are you going to drive that? Word of mouth is only going to take you so far. Word of mouth is great. We love it. But there's so much more you can

do.

Mark DeFrancesco: And word of mouth has always been our best thing.

It is still our best thing. We talked a lot yesterday about allowable cost per lead, right?

Jason Phillips: Yes.

Mark DeFrancesco: And it's always too much money, right? I always want it to be less. Hey, that was good, but... I wish it was 30 per lead less or 100 less, but what allows us to, because we're flirting with television, we're going to start our television ads soon.

I know you have experience with that, so I was asking you about it and what allows you to do these different things are the fact that you have so many past customers, or at least that allow me to do it, is the fact that I have over 10, 000. Residential customers that continue to call us and so now when that lead comes in it doesn't cost zero because we do a lot of the, the newsletters and some of that outreach, but it's very inexpensive relative to getting that new client.

So that combination of both allows you to have an allowable average cost that's low enough for it to make sense. That's what I'm

seeing.

Jason Phillips: Mark, if you [00:14:00] were starting your business over today or expanding into a new market, What percentage of revenue would you dedicate to advertising?

Mark DeFrancesco: 10%. And if I did 8%, I would be doing like a little happy dance, a little penguin dance, and make a little bit more money in my pocket.

And if I did probably 12%, I wouldn't cry about it too much, but I would know I've gotta, I've gotta tighten it a bit. Yeah. Okay. That's a number, that's a percentage of top end revenue. I think that's,

I think that's a great number. Ours is very similar. Yeah. And I've been in a range.

Yeah. What who does the selling?

So I have a sales team that does the selling. I did the selling for a long time. So I like to say that I sold like 20 million worth of residential houses, 500 power washings at a time. But we have a sales team now that goes out and they strictly sell.

So that's their job, but there's a bit of a process to our sales methodology. I've seen bits and pieces of yours and it's the closest thing I've ever seen to, [00:15:00] to what we try to do, which is spend the time with that client and yeah, I'm not going to go deep on that here, but I think it's about spending time drawing out some of that pain, being able to obviously present and talk about the price on the spot but to also have options like, Hey, let's go shopping together.

This is for what we talked about to do it this way. It looks like this. And I just noticed in the meeting, I just got to sit in on there's some cool things that you guys do, with financing and with some offers that also allows them to feel like they have options, that you can't take a 15, 000 job and make it 3, 000. You can't. It would be a different job, right? You could say I could give you 3, 000 worth of that 15, 000, right? Like you want, you ordered a steak, but you're only going to get that little half an ounce. You could pay for the half ounce. But when you have these other things in play, I think it's powerful and it allows people to feel like we call our sales people paint care consultants That's the name of the title and that's by design and I really want our [00:16:00] guys to feel that every day like Put on the hat of the customer sit on the side of the table with them and say hey I'm your consultant.

I want to help in this decision process. So it's high on information Now, obviously we have, we already have a good reputation, in the market and people know that. They call you for that reason but we're on the expensive side of the market, and as I talked to some of your salespeople, they feel the exact same way.

And so you're selling high value, low risk every single day. That's what we sell. High value, low risk. And for some salespeople, it takes time to understand that because not all industries and not all sales positions sell high value, low risk.

Jason Phillips: Particularly in the painting industry.

Mark DeFrancesco: Correct. There's a lot of chuck in a trucks and they're going to go and sell low price, GEICO sold low price for a long time and...