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Why People Spend $1,000,000 on a McDonalds Franchise

How it Can Help Your Painting Business

Eric Barstow
Published Date: 05/14/2016

A McDonald’s franchise cost $1,000,000 to start… give or take a few hundred thousand.

Why would anyone risk that kind of money?

Because it is not a risk. When is the last time you saw a McDonald’s with a “closed” or “out of business” sign? Probably never.

If you go into a McDonald’s anywhere in the country, your experience will be the same. Fries are cooked the same way everywhere… There are 47 steps (if I’m remembering right) to making a McDonald’s french fry. Fries turn out exactly the same every time…

Not because these are incredibly skilled employees… but because it’s an incredibly detailed system.

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… Just follow the process, and it works. They call this “turn-key”.

And I’ve applied the same principles to a painting company. You can get my entire “turn-key” system in my course.

There are 3 parts to a painting business.

Marketing. Sales. Production.

Marketing is finding customers who want estimates, which we call a “lead”.

Sales is everything from when you get the lead, until you have booked the job or not booked the job.

Production starts when a customer signs the contract and gives us a deposit and ends when we have completed painting the house and collected a final check.

My business is divided into 2 sections.. Sales & Marketing is one section. Production is the other.

We hire sales reps who are responsible for getting their own leads (marketing) and doing their own estimates (sales). We pay them 12% for sales and marketing. From that 12%, they pay for their own marketing to get their own leads to do their own estimates. This way, we only pay them when we get work, and we pay 12%. Our sales reps are 100% responsible for everything before the job is booked.

Our production manager, Paul, is responsible for everything once the job is booked. He gets paid 7% to oversee production. Again, we don’t pay anything until we make money.

So here is how it works….

#1 – Sales rep generates leads thru our different marketing strategies. They do estimates with customers, and they book jobs. Once job is booked, they give it to the production manager and we pay them 12% for booking the job.

#2 – Production manager contacts the customer, sets up the job start date, and sends the contractor out to perform the work. Our contractor completes the job and collects the final payment. When the final payment is collected, the production manager is paid 7% and the contractor is paid 50%.

50% to contractor, 7% to production manager, 12% to sales rep, and the rest is for us… We do have some other expenses like insurance and our website, but they are all very minimal.

This leaves us with a 31% profit margin, before some of those other expenses… and WITHOUT overseeing job sites, meeting with customers, talking to customers, or doing any marketing! All of this is hired out.

So what do I do?

Well I don’t do estimates, I don’t talk to customers, I don’t talk to painters, and I don’t go to job sites…

Every Monday I meet with our sales reps for 1 hour, and our production manager for 1 hour… for a total of 6 hours. In those meetings, we set goals and make a plan for the week. We also work on training and developing our team to do a better job following our systems.

This is how I work less than 20 hours per week, and still grow a business.

The key to all of this is the systems… What I just explained is the organizational structure.

But how do we guarantee our production manager does a good job every time? How do we train our sales reps to be effective? How do we get clients consistently thru marketing?

The answer is we have systems for all of these things… and in the next few days I’m going to show you some of the systems we have in place – at least start to give you a glimpse.

For a full breakdown the structure of the business and how we use systems, read this article and this article. Sometimes it’s easier to understand a video than an email.

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