Cabinet Startup Business Model
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- Опубліковано 31 лип 2019
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I would like to start working in this industry, can we schedule a call? The link in the description does not work.
Your link doesn’t work
Thanks Samuel, We'll get that corrected!
.... Some things aren't adding up here lol. You are gonna pay your guys $25 an hour? How you gonna write that off on your taxes? Cause otherwise you are gonna pay their taxes. More like $35 total cost per hour if you gotta pay their taxes if it's under the table. If you aren't paying under the table then it's gonna be way more.
I'm a cabinet maker and I've been painting my own stuff and doing refinishing a for 11 years now.
This whole thing seems like over promising to me... It seems a little off. And seems like you are banking on refinishing and refacing being "easy and cheap".... There's many many difficulties in a good refinishing job, and it's not easy. And good materials aren't cheap. Good spray equipment isn't cheap at all.
I'm glad you are helping people get started. But I think you should reconsider your pitch
You are 100% right I’ve been a cabinet painter and builder for years I go to peoples houses and take their doors off and take them back to my shop and paint the doors or make them new doors and then paint inside the house the frames and you can’t pay the taxes and insurance and auto insurance and materials for the 3500 range I think they are promising way over the top here I call BS
@@patheticcircus3774 ya... I'm trying to give them just a little grace in there. But I'm thinking the same thing lol. Everything has to be perfectly smooth for them to make money off of the model they showed. And nothing is ever perfectly smooth in business. There's always complications. You need enough pay so that if you have a bad couple jobs in the same month, then you can take the hit and keep rolling the next month. If you have a bad couple of jobs with the model they showed, then you are likely to go bankrupt lol.
We appreciate the questions, and sorry for not seeing the comments sooner! There are a lot of options for how you can pay the guys depending on the state that you're in and the local labor markets. Whether you go the route employee vs independent contractor is beyond the scope of this video because it's dependent on several other factors. This is something we deal with on a case by case basis with our students.
However, just to explore YOUR math... Let's say we did 35$ per hour. And your guys (even though your paying that much) still take 50 hours per job. At an average job size of 4000$ (which would be on the low end if it's taking 50 hours) and 1000$ in materials (200$ more than in the video) , you're profiting an average of 1250 per job completed by your crew. Our students would be expected and encouraged to work as well. Which means they'd have a job of their own... lets use the same numbers.
4000$ job. 1000$ materials. 0$ labor (they do the work themselves) - 3000$ profit.
That means you made 4250 in profit that week. And if you have the marketing to complete 8 jobs per month.... a total revenue of roughly 32000, and a total profit of 17,000.00$
It is true however, that to reach that level you need to have several key pieces in place that many contractors lack.
1. Great marketing & Advertising
2. Great work and SOPs
3. Effective business systems to manage it all smoothly.
Now, whereas those numbers don't leave as much profit as we generally like, it's still almost 50%.
In terms of "having a couple of bad jobs in a month" - unless someone is running a pretty large operation (refinishing more than 3 jobs per week), they should never have "a couple of bad jobs per month." Several bad jobs in a month is usually a sign of either an ineffective bidding process or poorly trained labor, which is what we'd troubleshoot first in that situation.
@@patheticcircus3774 If someone came to us with that problem (we help both new and existing contractors) we'd help them troubleshoot, because something doesn't make sense.
And here is why...
If you're doing 3500$ per job. Working as a 1 man operation... Your monthly numbers are as follows (We'll even round up expenses to demonstrate)
Revenue = 3500*4 = 14,000
Expenses = 1000*4 = 4,000
Revenue before fixed costs = 10,000 - Now, our video shows expenses on a per job basis. But lets say you run a 15% operating expense (which is decent, we'd prefer to shoot for 10....
Operations = 14000* 15% = 2,100.
That's 1200$ for a shop space, and 900$ at least for auto and insurance.
That leaves you with final numbers of
14,000 (rev) -- 4000 -- (variable cost) -- 2100 (fixed cost) == $7,900 profit. That's $94,000 per year, unless the business is bleeding from unnecessary expenses.
The only reason that model would fail, is if the marketing of the business in question wasn't able to provide at least 1 job per week.
Barring the marketing not working, the next thing we'd troubleshoot is the business owners handling of expenses. We find that many owners spend money on non-essentials and it really digs into their profits.
If neither of those were true, and a business owner was earning 96k per year and still struggling... well, that's personal finances. And we just help with the business :D
@@CabinetStartup listen, cabinet finishing and refinishing is a great business. I do it all the time and I make good money at it. But I think the issue is that you are making it sound so easy, like anyone can do it. That's not true at all... I mean... Yes, anyone can be a bad painter. But to be a good painter is very difficult and it takes many years to be able to address all the painting problems that you will encounter... What do you do when a customer wants to pore fill oak grain to look perfectly smooth? How about when painting new cabinets and the wood isn't finishing shrinking yet? How about a laundry cabinet that's been saturated by soap? How about efficiently blocking a water based dye stain? How about dealing with ventilation in closets? How about dealing with either rack marks on the back of a door or patching the holes on the tops/bottoms of doors as you spray and hang? How about the fact that you are legally not allowed to do refinishing without a painting contractors license? How about transporting freshly painted doors? Replacing doors and hardware? Modifying cabinets?
These are all difficult issues to tackle that have added up to maybe an entire year of time lost at the count of knowledge... Because if you screw it up, you either need to find out what you did wrong, and fix it for free... Or you give the client their money back and or get sued.
Once you get down your system after 3-5 years of difficulty and heavy investing then you can be doing very well for yourself.
If you are going to be a great painter with a consistent full time work load, then it will take years to get proficient, and build your clientele. And if you aren't interested in being a great painter, then you will not generate a consistent full time work load.
Yes. Refinishing is a great business. But it's very hard work to get good, and any mistakes that you make are going to be incredibly costly.
One time I had a refinishing job that was supposed to take 3 days. It ended up taking an entire month because Sherwin Williams sold me the wrong product 3 times and I wasn't experienced enough at the time to know better.
I'm all for educating and equipping people to do great work... But don't give the impression that this is an easy way to make a living. It's not. Once you get it down after 3-5 years and you've bought a trailer, and a shop space, and $10k in tooling, $10k+ for a reliable truck, and you've spent $100,000 and years of time on educating your employees and you are legally in the right with your state and county... Then ya. It will be great. But nothing great comes easy