How to Start a Farm (and Make $120K/Month) in 2024
March 15, 2024
Did you know that there are approximately two million U.S. farms, earning a combined $549.8B annually?
That means the average farm makes around $275K per year.
Whether you want to get your hands dirty growing crops or raising livestock, you can make a great living doing it. You can even start a hobby farm to grow food and make some extra money while you do it.
We’ve talked to dairy farmers, fruit farmers, and people raising goats, pigs, chickens, and other animals. These farmers make between $200K and $10M per year. With their guidance, we’re going to share how to start a farm and make a great living.
Each farmer we spoke to uses different strategies, but all of them love their craft, believe in hard work, and want to share their strategies with you. Click on any of the links below to jump to the section you want to know more about.
Farming Business Case Study: Miami Fruit
Rane Roatta started Miami Fruit when he was living with his single mom. His operation started as a family farm whose fruit he sold off the back of his bike. Now he’s selling millions of dollars worth of farm products every year.
He uses social media and an eCommerce site to help educate people about small farms and fruit recipes.
Want to know more? Check out our interview with Rane below to learn how to start farming.
How much does it cost to start a farm?
Farming is also a business, so you need to understand exactly how much it will cost. And it’s a complicated question with no set answer.
However, you can expect to spend anywhere from $600-$10K to start a small-scale farming operation. Large-scale operations can cost well over $2M to start!
To clarify your costs, create a comprehensive list of everything you need. Don’t be afraid to ask for help and advice from your farmer connections.
The costs of starting a farm might surprise you, but consider these essentials:
- Land
- Equipment and machinery
- Business management systems
We’ll discuss each of these later, but first, let’s discuss farmers’ earnings.
How much do farmers make?
That means the average farm makes around $275K per year, according to USDA data.
A farm’s cash flow may not be evenly distributed throughout the year. During the planting season, for instance, there will normally be an outflow of cash or borrowing money. During the growing season, spending may decrease but revenue will remain low.
Come harvest, revenues generally skyrocket while expenses are nominal. During this time, you may also need to pay back farm subsidies that help support agriculture farming throughout the year.
Next, let’s discuss some of the challenges you might experience when you start a farm.
Is owning a farm difficult?
Yes. Farmers and ranchers often experience uncertainty and conflict that put pressure on them during planting and harvesting. Some of the main stressors of farm operations include:
- Maintenance: Farming requires maintaining animals, crops, equipment, and your property. Maintenance can consume time and money quickly.
- Weather: You can’t predict when droughts, heatwaves, floods, freezing weather, tornadoes, or hurricanes strike and wreak havoc on a farm.
- Natural risks: Insects and soil-borne diseases can also make it difficult to run a successful farm business.
- Financial risks: Startup costs are high, market prices fluctuate, and earnings are inconsistent.
- Climate-compatibility: Some crops are just incompatible with local markets. For instance, you can’t grow tropical fruits in the middle of a desert.
- Mental aspects: Stress and mental fatigue can often make a farm operation difficult, especially for beginning farmers.
- Family turmoil: You know the old saying that business and family don’t mix? They almost always do in a farming business and that can cause stress.
Self-financing, crop insurance, and a commitment to dealing with problems head-on can reduce many of the stressors involved in starting a farm business.
What is the most profitable farm to start?
According to Insider Monkey, the source for the top-rated Yahoo blog, the most profitable farms are:
- Corn/Maize: $82.4B
- Soy Beans: $57.6B
- Wheat: $12B
- Tomatoes: $10.5B
- Almonds: $8.5B
You should look at whether these crops are suitable for your area when you consider starting a farm business. Next, let’s look at how to start a farm.
How to Start a Farm
Here are some steps to take to start a farm:
- Identify your niche.
- Learn about farming.
- Research the market.
- Write a business plan.
- Register your farm business.
- Get financing.
- Buy farmland.
- Buy farming equipment.
- Start operations.
- Establish sales and distribution channels.
- Market to your customer base.
Get ready to learn how to start a small farm.
Identify Your Niche
Before starting a farm business, you must choose what kind of small farm you want to run.
There are many options, and each one presents its own pros and cons. You will need to base your choice on a balance of passion (what can I wake up every morning and be happy doing?) and good business sense.
With experience and education, the decision about the type of farm you want to run will be a bit easier.
Remember that while passion is key, it’s essential to consider more than your favorite crop. Understand that farming is a business, and you must know what the market can handle. For example, hemp farmers in Wisconsin hit a bottleneck in their market and ran out of buyers in 2019.
These are some types of farms to consider:
Dairy Farms
Specifically dedicated to the production of milk (typically from cows or goats), a dairy farmer can have as few as one animal and as many as a few thousand. Milk used for drinking will need special equipment to comply with government guidelines.
The Lukens family started their family farm operation with just two goats. Now they make over $120K per month. Here’s part one of our interview with them.
Check out the second part of our interview with them, too.
Crop Farms
Every month there are more than 3,100 searches for the terms “vegetable farms near me” and “vegetable farm near me.” That’s a pretty good indicator that you should be selling to the public if you are growing fruits, vegetables, or grains.
These farms are dedicated to feeding people. For a small farm, this might mean a diversified list of various crops sold locally at farmers markets or co-ops. Make sure to rotate your crops to maintain the nutrients in the soil and provide healthier food.
Larger farms tend to stick with only one type of crop and may rely on large corporate deals for their produce.
Chicken Farms
Poultry farms (chickens and turkeys) are typically used for meat but may also supply eggs. Many smaller farms featuring cage-free, locally produced poultry and eggs are competing with larger-scale producers.
Check out how Geoff Scott and his partner started Marion Acres, Helvetia Farm Market, and Helvetia Poultry Processing.
Flower Farms
Flower farms supply their products to florists who then sell the product to an end-user. This type of small farm may also sell at farmers markets or to local grocery chains.
Organic Farming
Organic farming means that a product meets strict growing, handling, and processing standards. There are two levels of organic products:
- USDA-Certified Products: These products contain at least 95% organic content, go through a 12+ week certification process, and bear the USDA Organic seal.
- “Made With” Organic Materials: These products contain at least 70% organic materials and are mostly a marketing ploy but may still fetch a higher price.
A farm or processing facility must go through a rigorous process to get their products deemed USDA-certified organic products. The steps include:
- Following federal guidelines for soil quality, animal raising, reduction of pests and weeds, and additive use
- Preserving biodiversity, respecting the natural cycles, and caring for animals
- Avoiding GMOs, synthetics, and chemicals, while providing transparency on labels
- Submitting an Organic System Plan
- Allowing an accredited agent to inspect farm operations
- Waiting for a certified agent to review the inspection report
If your products pass the certification process, you can sell them with the coveted “USDA Organic” seal.
Other Interesting Farms
You wouldn’t believe how many types of farms people want to learn about. Some of the most common Google searches are about how to start a:
- Christmas tree farm
- Bee farm
- Mushroom farm
- Cattle farm
- Fish farm
- Lavender farm
- Goat farm
- Crawfish farm
- Shrimp farm
- Hog farm
- Deer farm
- Hydroponic farm
- Sod farm
- Sheep farm
- Butterfly farm
- Petting farm
- Regenerative farm
While this may indicate demand, it’s important to conduct market research to determine whether the above farms are economically viable.
Whether it’s just a hobby or you want to make farm work a small business, there are plenty of opportunities for finding land and starting a farm business. But there will be a learning curve.
Learn About Farming
If you grew up in the concrete jungle, then your first step is getting out of town.
The idea of a farmer wandering around on his property with a wheat stalk sticking out of his mouth isn’t reality. Farming is dirty, smelly, and hard work. It’s not for the faint of heart.
To gain a better understanding, visit the different farm types you might be interested in running and view them from a hands-on standpoint. If you don’t know a farmer, try searching online and scheduling a private tour.
Even better, ask if they’ll let you spend a whole day (or more!) with them to see how everything runs. Farming is a complicated business, so it’s vital to do loads of research on the front end so you know what you’re facing.
Education and Experience
A tour may be educational and inspirational, but it won’t cut it to run a successful farming operation. Farm managers need experience! Fortunately, there are many training programs available in the U.S.
- Rogue Farm Corps
- The Land Connection
- University of Vermont Farmer Training Program (6 months)
- New Entry Sustainable Farming Project
Learning how to become a farmer may be a slow process, but you’ll benefit from spending time on the land and working with real farmers.
Take courses at local universities or community colleges to learn about land preparation, seed propagation, soil fertility, pest control, harvesting, and crop storage.
Make Local Connections
Like many businesses, farms function better when they’re in a community that supports each other. Community Supported Agriculture is a new business model for farming to consider before starting your farm.
The system connects farmers to locals who can become subscribers. In return, they receive a weekly delivery of produce or other goods from the farm. Farmers regularly update subscribers on the status of the farm and invite them for on-site tours.
As a newcomer to the farming industry, you can get involved in this model to not only gain investors in your own farm but to learn from and cultivate relationships with other local farmers.
Connect to one of these farming communities through local relationships, farmers markets, or by finding one online.
Conduct Market Research
You’ll need to understand land preparation, seed propagation, soil fertility, pest control, harvesting, and crop storage.
Just growing things isn’t enough to make a farm successful.
Like any business, you must conduct a thorough market analysis and match your crop to your customer base. According to Tim Lukens, finding your customer base is one of the most critical aspects of running a viable farming business. You need to know who will buy your products.
I’ve seen people and heard of people investing a lot of money into infrastructure thinking, ‘Well gosh, everybody is going to want it!’ Well, guess what? That’s not the case. There’s a lot of competition out there.
Researching the market where you want to sell your products will give you an idea of what type of marketing budget you’ll need once your farm is up and running. If you are selling food, then keeping the market local can be beneficial, but don’t rule out the online marketplace.
The United States Department of Agriculture (USDA) is the top source for agricultural market research and has extensive resources available for free.
Case Study: Grace Harbor’s Growing Customer Base
For Grace Harbor’s business, the customer base developed over time. Since she started with goats, the natural progression for Grace Harbor was to make soap and then lotions. Her business began at farmers markets and moved to a mall kiosk to sell its goods.
By the end of the farmers’ market season, people were asking, ‘Where can we find you when the season is over?’ So, we rented a kiosk. And we launched a business.
Demand continued to increase, and now over 100 stores nationwide carry her skincare products.
The Lukens also began selling their soaps and other skincare products online, which is where their largest market is today.
The Washington State Department of Agriculture offers resources to help local farms market their products, providing marketing guidance, regulation education, and training specifically for small, local farms. Oregon has a similar program for those with a small farming business.
A quick online search will reveal assistance programs if you are starting a farm in another state.
Write a Business Plan
To understand if your farm is viable as a business, you need a business plan.
Your business plan is a “roadmap to success.” It provides information about who you are, what you want, and how you intend to get there. It’s a set of guidelines and is subject to change, but it’s a good place to start your journey towards becoming a farmer.
Fortunately, the USDA offers assistance in creating a business plan along with other resources to farmers who are just starting.
Other Resources
- New England Small Farm Institute’s sample business plan resources for farmers
- North Carolina State’s organic farm planning resources
- Kansas State Ag Manager’s sample business plan
- Small farm business plan sample
Register Your Farm Business
Registering your farm helps with income tax and securing funding, and it looks more professional to investors.
To legally start your farming operation, you need to establish a business structure for legal and tax purposes. Like any business, farmers operate under one of five structures: limited liability company, sole proprietorship, corporation, partnership, or cooperative.
Permits and Licenses
Besides a business structure, your farm will require various permits and licenses based on your location and style of farm.
The USDA has an online resource that maps out the federal licenses for each farm type. However, you must visit your state’s Department of Agriculture site to check on state and local licenses and permits.
Farmers Business Insurance
There are a variety of insurance policies that you should consider including:
- Crop insurance: There are all kinds of crop and livestock insurance available through the USDA Risk Management Agency
- Farmstead insurance: This is often called farm and ranch insurance. It works like homeowners insurance but covers more than a typical homeowners policy. You’ll also be able to get add-ons like livestock or crop insurance.
Get Financing
Once you complete a business plan and understand the feasibility of your agriculture business, it’s time to organize your finances. Although taking out loans to start a farm can be challenging, you may find it unavoidable.
Securing financing like loans, grants, or investment partners can help with startup costs, working capital, expansion, and growth.
Conventional Loans, the USDA, and Other Options
Traditional bank loans and small business loans may be available for your farm business. However, without some collateral or previous business history, they may be difficult to secure.
The best resource for a small farm loan (and for all things related to agriculture in the U.S.) is the USDA. The U.S. government aids farming operations of any size through their beginning farmer and rancher loans.
There are thousands of local USDA service centers throughout the country available to help with farming business needs.
Many people who don’t have startup capital may find help from family or friends, grant opportunities (make sure your business plan is solid!), or even the use of a 0% credit card.
Avoid Debt
While you might need a bit of money upfront to get started, many farmers suggest that those starting a farm business avoid getting into debt.
The Lukens family learned this the hard way when a bout of E. coli found its way into their product line. Health officials traced the bacteria back to Grace Harbor when someone became ill. The farm took a financial nosedive overnight. They tried to rely on credit cards to bail themselves out but ended up declaring bankruptcy.
After this disappointing situation, the Lukens regrouped by using only cash reserves to pay for operations. They learned a very hard lesson about avoiding debt at all costs.
The bankruptcy did some good things for us, too, because it forced us to operate on our own cash. We didn’t have any credit to do anything else. We had to do everything by cash. If we needed a new truck, or we needed a new anything, we had to do it with the money we had.
Advice from Chris Hogan, formerly of Ramsey Solutions, states that debt can magnify problems, and entrepreneurs need to keep a close eye on cash flow.
Buy Farmland
Obviously, you need a parcel of land to grow your food or keep your animals. If you already have property, you could start a small farm in your own backyard. If you need to buy or rent land, factor that into your startup costs.
Buy Farming Equipment
You’ll need to buy farming equipment. Your farmer tools depend on the type of farm you run.
Large crops may require tractors and storage buildings, among other equipment. Dairy farms may require special milking and pasteurizing equipment. Animals require fences, outbuildings, and a variety of handling equipment.
If you’re making products on-site, like Grace Harbor’s skincare line, you need a manufacturing space for production equipment and labeling.
It may be possible to borrow or share equipment at the beginning, which is a great way to keep your costs low. This is where those connections with other farmers continue to come into play.
Farm workers might also need to purchase:
- Water pumps
- Soil preparation
- Seeds
- Irrigation
- Cooling and storage
- Packaging
- Marketing
- Animals and veterinary services (if running a farm with animals)
If farming sounds like it will be too costly, check out some of the most profitable businesses.
Start Operations
Once you have all the equipment, crops, and livestock, it’s time to run your business. That means you’ll need to:
- Care for crops or livestock: This might mean hiring farm workers. Learn more about hiring.
- Manage financials: Use QuickBooks, Easy Farm, or Farmbooks.
Go to Farmers Markets and Other Sales Channels
Based on our interviews about how to start a small farm business, there are several sales and distribution channels you should consider.
- On-premises: You can sell your products directly to consumers at your location. This requires marketing your farm but no shipping.
- eCommerce: Sell your products online and ship them to customers.
- Farmers markets: The USDA has a national farmers market directory where you can find your local market, contact the director, and negotiate your way into the market.
- Distributors: Sell your cattle or food to distributors that will transport it to grocery stores and other locations.
The distribution channels you choose will impact your profitability, but most successful farm businesses will use multiple channels.
Go Start Your Successful Farm Business
We’ve discussed the farm industry, farm ideas, how to start a farm, business structures, how to buy a farm, and where to sell farm produce and meat. It’s up to you to take the information, turn it into a farm business plan, then enact it.
One thing farmers need to understand to be successful is who their buyers are. Tim Lukens says:
If you don’t know who your buyer will be, you can’t sell your product. Even if you can grow or make a good product, you have to find someone to buy it.
Lukens says that a farmer needs to understand what the market potential is and understand what the operating costs are. This will help protect those who want to start a farm business from getting in over their heads.
Are you ready to get started on your own farm? Let’s hear what you’re going to be raising or growing on your very own land!
Author
Brandon Boushy
Related articles
For many budding business owners, buying a franchise is a no-brainer. That’s because the best franchises to buy have high profit margins and low failure rates.
Entering a franchise agreement helps your business get to financial stability quicker. For instance, Hilton Hotel franchises benefit from a loyal customer base, a recognizable brand, and a proven business model that helps you skip the shaky time when most new businesses fail. Multiple hotels under the Hilton name have less than a 1% failure rate.
Sure, you’ll have high initial investments and have to pay ongoing fees. But that is a small price to pay given that the most successful franchises are 63.3% more likely to succeed than the average small business during a three-year period.
[su_note note_color="#dbeafc"]We’ll discuss the most profitable franchise opportunities to help you choose one. Click on any of the links to jump straight to one of the best franchises to own, or read on.
- Are franchises profitable?
- What is the most profitable franchise to own?
- What are the most profitable franchises to own?
- Factors that impact franchise owners’ success
- How to measure franchise profitability
- Are you ready to become a franchise owner?[/su_note]
Are franchises profitable?
Yes, franchises can be profitable. According to Sculpture Hospitality, franchisees can expect to have 4% to 12% profit margins within a few years of opening a new franchise.
Profitability will depend on the franchise, investment costs, location, and managerial experience of the franchisee.
Yes, franchises can be more successful than other small businesses
Earlier, we told you the most successful franchises are 66.3% more likely to succeed than the average small business. Here’s how we figured that:
- Franchise failure rate over 3 years (top 100): Under 2%
- Small business failure rate over 3 years: 40%
That means 98% of the top 100 franchises survive a three-year period, compared to 60% of businesses overall. Do a little more math (98% divided by 60%), and you’ll find that a top-100 franchise has a 63.3% higher probability of surviving three years.
What is the most profitable franchise to own?
The most profitable franchise to own is Express Employment Professionals, a staffing agency. We’ll dive further into Express Employment Professionals, how we arrived at this conclusion, and the rest of the most profitable franchises below.
What are the most profitable franchises to own?
The most profitable franchises as measured by the time it takes to make the initial investment back are:
- Express Employment Professionals
- RE/MAX
- Wendy's
- Chick-Fil-A
- Ace Hardware
- UPS Store
- Matco Tools
- McDonald's
- PIRTEK
- Snap-on
Author’s Note: Our Methodology
We spent a lot of time debating the best way to establish the most profitable franchises.
The absolute best way to establish the most profitable franchise businesses is to review Franchise Disclosure Documents and establish the profit margins for over 2,000 franchises. Unfortunately, that requires a ton of labor (or an amazing web crawler), so we went with the next best viable option.
We found an Insider Monkey report that ranked the top 10 most profitable franchises. It provides annual sales numbers and maximum initial costs. We took that information and went a couple of steps further.
We divided the average annual sales by the number of franchises to find the annual revenue per franchise. This allowed us to determine the average monthly revenue per franchise. Then we divided the high end of the estimated franchise cost by the average monthly revenue to find the “time to return,” or time to recoup the initial franchise cost.
It’s not as precise a method as we would like for the most profitable franchises, but it gives you a good idea of the franchises that will pay for themselves quickly.
#1. Express Employment Professionals
• Number of Franchises: 860
• Average Monthly Revenue: $4,837,209
• Maximum Initial Cost: $400,000
• Time to Return: Less than 1 month
Though Express Employment Professionals is one of the lesser-known names on the list, this staffing agency has been in business for over 40 years.
Once fully operational, the average franchise could cover its initial costs within the first month. That’s hard—nay, impossible—to beat.
#2. RE/MAX
• Number of Franchises: 9,175
• Average Monthly Revenue: $1,758,038
• Maximum Initial Cost: $239,500
• Time to Return: Less than 2 months
RE/MAX is the only real estate franchise on this list. This is one of the best franchises in the real estate market, with each RE/MAX real estate agent averaging 13.3 transactions per year.
#3. Wendy's
• Number of Franchises: 6,949
• Average Monthly Revenue: $1,798,820
• Maximum Initial Cost: $698,500
• Time to Return: Less than 5 months
Wendy’s franchises have the shortest time to return of any fast food industry franchise on the list. The brand recognition will help drive net profits, and many franchisees own multiple stores.
#4. Chick-Fil-A
• Number of Franchises: 2,928
• Average Monthly Revenue: $5,836,749
• Maximum Initial Cost: $2,803,435
• Time to Return: Less than 6 months
Chick-Fil-As are some of the best franchises to own because they bring in massive revenue. With less than six months from opening to reach profitability, most franchises will be highly successful.
They are closed on Sundays and require Christian values, which may exclude some people looking to buy a franchise.
#5. Ace Hardware
• Number of Franchises: 5,555
• Average Monthly Revenue: $4,028,803
• Maximum Initial Cost: $1,913,000
• Time to Return: Less than 6 months
Ace Hardware is another one of the best franchises to own. With 5,555 stores and average sales of $4 million per year, it can take six months for this franchise to recoup its initial investment.
#6. UPS Store
• Number of Franchises: 5,465
• Average Monthly Revenue: $631,290
• Maximum Initial Cost: $476,993
• Time to Return: Less than 10 months
The UPS Store is one of the best franchises to open. It consistently ranks in the Entrepreneur Top 10 franchises list, and the average revenue indicates that the franchise requires about 10 months to earn back the initial investment.
#7. Matco Tools
• Number of Franchises: 1,937
• Average Monthly Revenue: $400,103
• Maximum Initial Cost: $313,646
• Time to Return: Less than 10 months
Matco Tools is a mobile automotive tool franchise. It is the best franchise to open that doesn’t require a building. Matco Tools franchisees and deliver tools straight to mechanics. It’s easy work, low cost, and doesn’t ask for royalties, which makes it one of the most popular franchises to start.
#8. McDonald's
• Number of Franchises: 40,000
• Average Monthly Revenue: $2,812,500
• Maximum Initial Cost: $2,503,000
• Time to Return: Less than 11 months
People commonly think McDonald’s is the best franchise to buy. It does have high profit margins and an established brand, but there is a hefty initial investment and a lot of competition.
#9. PIRTEK
• Number of Franchises: 590
• Average Monthly Revenue: $1,008,475
• Maximum Initial Cost: $899,300
• Time to Return: Less than 11 months
PIRTEK focuses on hoses for hydraulic machines. If you’re looking for entrepreneurial endeavors that focus on industrial applications and offer financial stability, PIRTEK might be for you.
#10. Snap-on
• Number of Franchises: 4,775
• Average Monthly Revenue: $429,319
• Maximum Initial Cost: $465,436
• Time to Return: Less than 14 months
Snap-on is another of the most profitable franchises that sells tools, but the retailer focuses on more than just automotive tools. Both the revenue and the minimum initial costs are higher than Matco, but the time to return might be slightly longer because of the higher initial costs.
UpFlip Top Franchise Opportunities
The following franchise ideas are some of the franchises we have interviewed. These make our best franchise opportunity list because they have low start-up costs, good business processes, and great owners who believe in helping franchisees succeed.
#11. MaidThis
This home and Airbnb cleaning franchise lands on the list of most profitable franchises instead because its extensive business support and remote business model provide many financial benefits.
You focus on business processes and pay others to clean the properties.
Franchise units require a $35K franchise fee and between $48K to $67K total startup costs.
The average location makes $10K per month in revenue. Assuming you make 30% profit, you’ll make back your money in less than two years.
Competing with other franchisees will not limit your financial success because most locations do not have a franchise. When you want to expand your business model, you can expand to other cities quickly.
Learn more about how to start a remote cleaning business from Neel below.
Like Neel's strategy?
Find out how to start a MaidThis franchise.
#12. Brown’s Pressure Washing
Brown's Pressure Washing just launched a franchise opportunity developed by founder Joshua Brown and UpFlip that enables you to launch a fully equipped pressure washing business seamlessly. The licensing fee gives franchisees access to video courses, a website, a boot camp, contracts, a territory, systems manuals, brand licenses, and a 24/7 online support community. Franchisees also agree to pay a 10% royalty fee to cover weekly coaching and administrative support.
• Licensing Fee: $20,000
• Total Investment: $50,000-$100,000
• Royalty Fee: 10%
• Space Needed: 100-2,000 square feet
• Employees: Hire employees or subcontractors to do the cleaning
• Territories: You can buy more than one territory if they are available in your area
• Franchising Funding Assistance: Yes, through third-party financing services
Find out how Joshua Brown started Brown's Pressure Washing below.
Want to use Josh's recipe? Become a Brown's franchise.
#13. Wise Coatings
A Wise Coatings franchise coats garage floors and other surfaces with a material similar to epoxy.
You’ll need an initial franchise fee of $50K and a total initial investment of $114K-$134K to become a Wise Coatings franchise owner.
The franchises make between $400K and $500K in revenue and 15%-20% profit margins. The average Wise Coatings franchise recoups its initial costs in two to three years.
• Franchise Fee: $50K
• Total Investment: $117K-$160K (including 3 months working capital)
• Space Needed: 100-2,000 square feet
• Number of Employees: 2-4 (suggested)
• Territories: Discounts for buying more than one
• Franchising Funding Assistance: Provided through Benetrends. Learn how to qualify.
Check out our interview with Brandon Vaughn, who runs a successful epoxy flooring business, below.
#14. Spray-Net
Spray-Net holds patents in a unique painting process that was innovated by Carmelo Marsala after he found a way to modernize the house painting industry. The company has 40 franchisees (and counting) and owns patents that mean only those who buy in and learn the process can offer it to their customers.
• Franchise Fee: $45,000
• Total Investment: $170,825-$241,825
• Royalty Fee: 8%
• Space Needed: 100-2,000 square feet
• Employees: Hire employees or subcontractors to do the cleaning
• Territories: You can buy more than one territory if they are available in your area
• Franchising Funding Assistance: Yes, through third-party financing services
See how you can start a Spray-Net painting franchise in this video:
#15. EverLine
John Evans started EverLine with $500 and a unique vision for parking lot maintenance. Twelve years later, the multimillion-dollar company has franchises all over North America that help keep other businesses’ parking lots safe and looking sharp.
• Franchise Fee: $49,500
• Total Investment: $164,744-$332,443
• Royalty Fee: 9% or $500 per territory+ 3%—whichever is greater
• Space Needed: 100-2,000 square feet
• Employees: Hire employees to provide the services
• Territories: You can buy more than one territory if they are available in your area
• Franchising Funding Assistance: Yes, through third-party financing services
Learn more about EverLine in our in-depth interview with its founder here:
Other Commonly Mentioned Franchises
There are plenty of other franchises that provide profitable opportunities. Some commonly mentioned options include:
- Anytime Fitness
- Dream Vacations
Anytime Fitness
Anytime Fitness earns monthly membership fees from people who want a workout. The company has 2,349 franchises and claims a 16.9% profit margin.
Dream Vacations
Dream Vacations franchises require very little upfront costs. You can get a franchise for a few thousand dollars and then you make a commission on each travel arrangement you help someone book.
Factors that impact franchise owners’ success
Factors that impact a franchise’s profitability include:
- Costs of goods or services: A franchise, like most small businesses, may spend up to 60% of revenue providing the primary products and services of the business.
- Franchisee satisfaction: A franchisee who is happy with the franchise business is more likely to be successful than one who is disgruntled with the franchisor. Prospective franchisees should talk to other franchisees to see if they are satisfied with their franchise units.
- Sales, general, and administrative (SG&A) costs: According to NYU Stern, SG&A costs are 14.4% of business spending, but the exact amount varies by sector. When SG&A is too high, the business is inefficient; when it is too low, the company may not make as much as the franchisee would like.
- Industry trends: Technology is evolving, and how a company responds to industry trends can make or break it.
- Rent: Owning a franchise will be much more profitable if the company can be a home business. You won’t have additional rent and utilities to pay. Read our resource on how to start a home-based business for more.
- Revenue: A franchise opportunity that has higher average gross sales tends to do better than one with lower gross sales.
- Royalties: Most franchisors collect royalties, which may be either a percentage of sales or a fixed rate each month. These royalties will eat into your profits. Be wary if they are substantially higher than your industry’s SG&A costs.
How to measure franchise profitability
There are a variety of ways to measure a franchise’s profitability. We’ll discuss how to measure a franchise’s profitability using:
- Net operating income (NOI)
- Franchise fee
- Initial investment
- Return on investment (ROI)
- Cash-flow
- Break-even analysis
Let’s look at how each of these helps prospective franchise owners judge the most profitable franchise opportunities.
Net Operating Income
The best metric to measure a franchise’s profits is the NOI. This measure of profitability excludes taxes, financing costs, earnings from investment activities, and depreciation to show how much money the business is making.
Franchise Fee
Every franchisor charges a franchise fee for the right to use their business name, business model, and intellectual property. Depending on the opportunity, expect to pay initial franchise fees between $1,000 and a million dollars.
Your franchise won’t be truly profitable until you have taken home at least this much from the franchise opportunity.
Initial Investment
In addition to an initial franchise fee, you’ll want to know the total initial investment to start owning a franchise. Franchise opportunities may require up to $5 million initial investment, but most are between $10K and $100K.
Until you make the initial investment back, you haven’t really made a profit.
Return on Investment
Another way to measure the most profitable franchises is by comparing the ROI. To measure this, you’ll use the net operating income divided by the total investment.
You can measure your ROI on both an annual basis and a lifetime basis.
Cash Flow
Cash flow is the amount of money going in and out of the business each month. A negative number means cash is flowing out of the business and you’ll need to reinvest or cut your losses, while a positive number means you are bringing more in than your expenses.
You can divide the initial investment by the cash flow to see how long it will take to get the investment back.
Break-Even Analysis
The break-even point considers the initial investment plus fixed and variable expenses and compares them to revenue. To break even, your investment and expenses equal your revenue—and thus, you’re not losing money. Check out our article on performing a break-even analysis.
Are you ready to become a franchise owner?
Buying any of the most profitable franchises is a great way to start your entrepreneurial journey. While buying a franchise location might cost more than starting your own business on the front end, they are more likely to succeed long term.
Which of these successful businesses are you considering purchasing?
Are you struggling to figure out how to run a successful business? Many business owners don’t figure it out on their first try, but Afshan Abbas, the owner of Fuchsia Shoes, told us:
[su_quote]Coming this far, [it] was having grit. We failed ten times, but the eleventh time it worked. So, it’s about repeating the process, trying out different things, and figuring out what works for you.[/su_quote]
We’ll share insight from successful businesses to help you learn how to run a business that lasts over a decade.
To effectively run a business, KPIs are necessary to measure progress. KPIs are metrics that measure how well your company is achieving goals laid out in the business plan, following your core values, and achieving your mission.
It’s commonly known that employees focus on what is measured and emphasized as important. Ensure that key performance indicators help measure the things that will keep you focused on running it as a business.
Keep reading for more business tips on how to run a business successfully.
One of the hardest things new businesses deal with is customer complaints. If you handle them well, they can help create a loyal customer, but you might lose a customer if you don’t satisfy their needs.
When a customer has a complaint, try the following process:
To run a business successfully, you have to manage your margins. For some companies, managing margins is easy.
Sanford Booth, a Big Frog franchise owner, told us:
[su_quote]Direct to garment is typically 60-70% (gross) margins or around 45-50% for screen printing, but it fluctuates from month to month based on how many non-profits I’m working with.[/su_quote]
Restaurants will often run such slim margins that they have to actively manage them by the hour to make sure their labor costs don’t rise too much and ruin their profitability. That’s why servers often don’t work eight-hour shifts.
Even if it’s small, you need a marketing budget. On average, businesses spend around 8-10% of revenue on marketing, but some spend up to 30%. During the early stages of the company, spend 8-10% of what you want to be making on marketing. It will pay off once you get there.
Be careful when marketing. You don’t want to spend it blindly. Pay attention to your cash flow and if it gets too low, alter your business plan to adjust for the marketing lessons you’ve learned.
Many business owners allow marketing to go far too long without improving it. You have to monitor the results, mainly social media marketing and paid ads.
If you just let it run without observing what channels are making a profit, you’ll lose too much money. When fine-tuning your marketing, make it a point to check its performance weekly. Once you’ve figured out which channels work, keep optimizing them and drop the rest.
Why Do Businesses Fail?
Businesses fail for many reasons, but the primary ones are:- Poor financial decisions
- Failure to grow sales
- Inability to manage inventory and growth
- Lack of Experience
How to Run a Business Well
#1. Use a Business Plan
To run a successful business, you need to focus on what the company is trying to achieve. A new business should write a business plan to help manage the company. Make sure to include: [su_note note_color="#dbeafc"]- Purpose of the company
- Business goals
- Mission statement and values
- Industry outlook including major and local competitors
- Market research
- Identify the target audience
- Identify ways to reach your ideal customers
- Identify the customer acquisition costs
- Marketing plan
- Financial projections for one year, three years, five years, and ten years
- Funding needed and how the company will get it
- A human resource management plan
- Necessary roles
- Employee benefits
- How to build company culture
#2. Use Profit Goals as Benchmarks for Success
Running a successful business means knowing your profit goals and measuring performance against them while running your business. These goals should be in a business plan, but you should frequently review them to measure your progress. The easiest way to establish profit goals is to start with the profit you’d like to make. Let’s assume your profit goal is $100K annually. Follow the steps below to find out how much revenue you’ll need:- Look up the net income ratio for your industry on NYUs Margins by Sectors chart.
- Divide your profit target by the net income ratio.
- That’s how much revenue you’ll need unless you can figure out ways to get a higher profit margin.
#3. Mission Statement
Successful business owners also use their mission statement to help guide business decisions. Your mission is simply what you do and why you do it. It is usually only a sentence or two. For instance, the following is Tesla’s mission statement: [su_quote]Tesla’s mission is to accelerate the world’s transition to sustainable energy.[/su_quote] It clearly states what the business leaders focus on accomplishing. Prominently displaying the company's mission where you and others will see it helps keep your team focused on your goals.#4. Values
You should write down your core values and keep them where you can view them regularly because your values should guide everything you do as you operate. Business functions such as customer service, hiring employees, and negotiating with vendors should all be based on your values. When you start a business, the values and mission are new ideas fresh in your mind, but as you progress further into the company, you may lose sight of them because of stressors like not having enough money. Make sure you review them consistently to align your business with your values. Keep reading for more tips on running your own business.#5. Key Performance Indicators (KPIs)
To effectively run a business, KPIs are necessary to measure progress. KPIs are metrics that measure how well your company is achieving goals laid out in the business plan, following your core values, and achieving your mission.
It’s commonly known that employees focus on what is measured and emphasized as important. Ensure that key performance indicators help measure the things that will keep you focused on running it as a business.
Keep reading for more business tips on how to run a business successfully.
#6. Show an Interest in Your Customers’ Problems (and a Desire to Solve Them)
A famous quote attributed to Theodore Roosevelt says: [su_quote]Nobody cares how much you know until they know how much you care.[/su_quote] Keep this in mind when you run a business because small businesses become successful through personal service. To truly understand how to run a company, you need to care about your customer base and help them solve their problems. Sometimes showing compassion can be a real challenge, especially when a customer is frustrated, but we can build our levels of understanding through conscious effort. Greater Good in Action is a site run by UC-Berkeley to help people develop better practices around compassion, forgiveness, and other qualities that help us be our best selves. I strongly recommend it. Keep reading for more business running tips.#7. Providing a Reliable Service Is Crucial
Potential customers expect to get what they need when they need it. When starting a business, make sure you make informed decisions about operating and what you carry. You must be reliable, or your target market will go elsewhere. The owner of Wild Wheat Bakery told us: [su_quote]You have to treat everybody that walks in this door with great customer service. Make sure they are getting what they need. Make sure you’re giving them quality food. Over 50% of our customers daily are our regular customers.[/su_quote] Check out our interview with him below. [su_youtube url="https://www.youtube.com/watch?v=j2_xwBgyFFU"] If you don’t provide your target market with the product or service they need, you’ll have difficulty maintaining your customer base and attracting new customers. Ensure you give the customer base the products and services they expect.#8. Deliver More than Is Promised to Every Customer
Imagine your air conditioning or heater stops working on an inclement day. So you call an HVAC company at 10 a.m., and they tell you they’ll be there within the next four hours. Meanwhile, you are highly uncomfortable waiting for them to get there. They call at the last minute to say they’ll be there in a couple of days. That’s a stressful scenario, and it’s not how to run a business. Sure, things go wrong, but that’s why a lot of creative professionals use the saying: [su_quote]Under-promise and over-deliver.[/su_quote] New businesses can do this by: [su_note note_color="#dbeafc"]- Providing worst-case time and price estimates and delivering for less.
- Throw in a small gift like a sticker, a coupon, or pieces of candy.
- Provide free bread or chips & salsa at restaurants.
- Fix something small that you can do quickly without charging.
#9. Reward Customer Loyalty
To effectively run a business, it is necessary to reward customer loyalty because two-thirds of new customers come from referrals, according to SignPost. If you don’t already have a loyalty program, set it up now and offer benefits that show you value your returning customers. To find a loyalty program that works for your business, check out Capterra’s shortlist. For best results, make sure it integrates with your customer relationship management software and accounting software so that you can effectively measure the results of your loyalty program. There’s more! Keep reading our tips on running a business. Keep reading to learn how to run a small business when a customer complains.#10. Handle Customer Complaints Immediately
One of the hardest things new businesses deal with is customer complaints. If you handle them well, they can help create a loyal customer, but you might lose a customer if you don’t satisfy their needs.
When a customer has a complaint, try the following process:
- Hear them out.
- Apologize for the inconvenience.
- Ask what you can do to make it right.
- Do what they ask (within reason).
#11. Operate Lean
Operating lean should be considered one of the basics of running a business. Lean focuses on several factors, including: [su_note note_color="#dbeafc"]- Limiting the amount of inventory and equipment you buy to what is currently needed
- Finding ways to remove waste
- Focusing on continuous improvement
- Making everything easier for employees and the business owner
#12. Avoid Unnecessary Loans
Borrowing money makes it harder to grow a business unless you have a solid plan for it and follow through. Loan payments increase expenses, and interest rates quickly become higher than your profit margins, especially when using credit cards. In one of his interviews, Paul told us that he avoids loans and selling equity because someone else thinks they have a say in the business.#13. Manage Your Margins
To run a business successfully, you have to manage your margins. For some companies, managing margins is easy.
Sanford Booth, a Big Frog franchise owner, told us:
[su_quote]Direct to garment is typically 60-70% (gross) margins or around 45-50% for screen printing, but it fluctuates from month to month based on how many non-profits I’m working with.[/su_quote]
Restaurants will often run such slim margins that they have to actively manage them by the hour to make sure their labor costs don’t rise too much and ruin their profitability. That’s why servers often don’t work eight-hour shifts.
#14. Cut Underperforming Lines
If you are offering products or services that tie up resources without making a reasonable profit, eliminate them. There’s no reason to have money tied up in inventory that isn’t selling. If you are using net-30 payments, slashing the prices to pay it before the interest kicks in may be necessary.#15. Outsource as Many Functions as Possible
As a business owner, focus on making the business money. You should outsource anything that doesn’t increase your business's revenue to the best provider for your budget. Areas you should consider outsourcing to another company or freelancers on Fiverr or Upwork include:- Bookkeeping
- Marketing
- IT
- Administrative work
#16. Offer Industry-Leading Pay and Benefits
If you decide you need to hire people, take care of them. A Harvard study showed that increased wages improved productivity more than the cost of labor, reduced turnover, and increased the ease of recruiting. The old saying, “Take care of people, and they take care of you,” definitely holds in business. Do some market research to find out what competitors in your industry are doing and then offer a little more. If you pay your people as much as you can and give them the benefits to take care of themselves, it will create loyalty that eludes many businesses today.#17. Hire Passionate Employees
Remember the mission statement and values we suggested you review frequently? Review them before every interview. Most jobs you can train people to do, but it’s much harder to teach people to have a positive attitude, passion for what you do, and share values they don’t already hold. So look for people who already embody your company culture. Just be easy on them in the interview. Some people are highly passionate but clam up in job interviews. If you can do a “working interview” and allow them to do the job with you for a few hours or a day, do it! If you can do a “working interview” and allow them to do the job with you for a few hours or a day, do it! You are far more likely to see a potential employee’s personality than if you just do a 30-minute interview. Most people have some anxiety in interviews. Based on my work in photography, it takes about 45 minutes for someone to shed their nervousness. Give them a chance to show their true self.#18. Maintain a Marketing Budget
Even if it’s small, you need a marketing budget. On average, businesses spend around 8-10% of revenue on marketing, but some spend up to 30%. During the early stages of the company, spend 8-10% of what you want to be making on marketing. It will pay off once you get there.
Be careful when marketing. You don’t want to spend it blindly. Pay attention to your cash flow and if it gets too low, alter your business plan to adjust for the marketing lessons you’ve learned.
#19. Hire an Agency
One of the benefits of hiring an agency is having multiple specialists to help you achieve your goals. A good agency should have: [su_note note_color="#dbeafc"]- High-quality content marketing specialists.
- Social media management specialists.
- Graphic designers create content such as infographics, videos, and memes.
- People who specialize in optimizing search engines.
- Paid ads experts.
- Google My Business Experts.
#20. A Successful Business Tells a Story
Marketing is like Hollywood storytelling. In it, your customer is the main character, and you are the sidekick, the person who helps them overcome their antagonist (the problem they are trying to solve). Make sure your marketing keeps that in mind at all times. If you successfully tell a story that communicates how you can help them achieve their goals, you’ll be on your way to knowing how to run a business.#21. Stop Wasting Time and Money on Marketing that Doesn’t Work
Many business owners allow marketing to go far too long without improving it. You have to monitor the results, mainly social media marketing and paid ads.
If you just let it run without observing what channels are making a profit, you’ll lose too much money. When fine-tuning your marketing, make it a point to check its performance weekly. Once you’ve figured out which channels work, keep optimizing them and drop the rest.
Closing Thoughts on How to Run a Business
Business success relies on a variety of different skills. Regardless of what industry you are in, you should make it a point to be resilient, open to change, and learn when to cut your losses. Learning how to run a business is highly challenging but equally rewarding. Don’t be too hard on yourself. Check out our blog about business podcasts to find more great insights on running businesses. What are the most challenging parts of business operations for you?
Clients pay hefty sums for a good residential painting company. Want to know how to start a painting company and make $10,420 per hour?
We’ll show you how Carmelo Marsala started Spray-Net and makes over $21 million per year. He discusses his painting services, pricing, and how to get painting jobs. Along the way, he shares a bit of his business philosophy.
[su_quote]You can’t fail if you don’t quit.[/su_quote]
Read on to learn how to get started in painting from a business owner who has trained more than 117 franchisees to use his patented painting process for roofs, vinyl, and other unique materials.
[su_note note_color="#dbeafc"] Click on any of the links below to jump to that section, or just continue reading.
- Case Study: Spray-Net
- UpFlip exclusive Spray-Net franchise
- Learn about the painting industry
- How to start a painting business
- Step #1. Learn professional house painting skills
- Step #2. Research the market
- Step #3. Create a painting business plan
- Step #4. Consider painting business names
- Step #5. Choose your business structure
- Step #6. Get a painter’s license
- Step #7. Open a business bank account
- Step #8. Get painting business insurance
- Step #9. Establish painting services and prices
- Step #10. Choose your painting equipment
- Step #11. Set up accounting and bookkeeping
- Step #12. Invest in painting business software
- Step #13. Advertise your painting business
- Step #14. Get your first customers
- Step #15. Document everything
- Step #16. Hire subcontractors or employees
- Spray-Net franchise offer
- Painting business influencers
- Painting business resources
- Start your own painting business [/su_note]
Case Study: Spray-Net
Straight out of college, Carmelo became a franchisee for the painting company College Pro. He realized exterior vinyl painting was something that was missing in the industry. He started digging into why and found that the standard paint production process just doesn’t work for vinyl application.
Carmelo started asking why additives weren’t added on site to adjust to weather conditions, and he kept hearing the same thing:
[su_quote]That’s just how it’s always been done.[/su_quote]
He decided to reimagine the process and formulate his own paint. Spray-Net was born, and today he makes around $21 million per year selling painting franchises and training the franchisees. There are now more than 130 Spray-Net locations in the U.S. and Canada.
Check out our interview with Carmelo below.
If you like how Spray-Net approaches the painting industry, consider our exclusive offer.
UpFlip exclusive Spray-Net franchise
We’ve partnered with Carmelo to offer you an exclusive opportunity to get a Spray-Net franchise and save.
Learn about the painting industry
How much does it cost to start a painting business?
Though car painting and artistic painting can be viable business options, in this guide, we’ll be covering house painting businesses.
Starting a house painting business requires startup costs between $50 and $35,000, depending on the type of painting business and whether you have the tools and equipment to start painting.
Painting companies that need a shop could cost much more than $35K because you’ll need to put a deposit on the space, remodel, and furnish the space. That's why many people consider starting a painting business from home. Costs will vary based on the region.
The basic painting supplies, like brushes, drop cloths, extension poles, paint trays, and rollers, aren’t that expensive. The main costs will be a vehicle, business formation, and insurance when you first start. You’ll save a lot of money if you already have a vehicle.
Do painting business owners make good money?
Yes, painting business owners can make great money, but it depends.
According to business research firm IBIS World, the average painting company makes about $140K per year with a 6.9% profit margin, which isn’t very good. Successful professional painters can make much more though. Carmelo told us about Spray-Net’s earnings.
[su_quote]The company makes $10,420 per hour. First-year franchises make around $500K [in] revenue per year, while older franchises average $1.2M. Gross margin is 59.44%.[/su_quote]
That means first-year painting business owners can take home over $100K in net profit. The older franchises are making about 2.5 times that. We came to these numbers by multiplying the revenue by the gross margin and then subtracting 40% (20% for taxes and 20% for additional business costs).
Do painters need to be licensed and insured?
Make sure to ask a licensed attorney about the requirements in your location, but most states require contractors to be licensed and insured. Make sure to register as a contractor if it is required in your location.
At a minimum, you should carry $1M per occurrence or $2M in lifetime general liability insurance to protect against damage done to clients’ property. In addition, you’ll probably need workers' compensation and commercial automotive insurance.
What equipment do I need to start a painting business?
You’ll want commercial painting equipment when you start a painting company. Some of the equipment you’ll need includes:
- Brushes
- Drop cloths
- Extension poles
- Paint trays
- Rollers
- A truck or van
- Painters tape
Spray-Net has additional painting equipment requirements, including sprayers and mixers, which are necessary to mix and spray the paint on location.
Their painting process is patent protected, so if you want to use their painting equipment you’ll need to buy a Spray-Net franchise.
How to start a painting business
Starting a painting business requires you to:
- Learn professional house painting skills.
- Research the market.
- Create a painting business plan.
- Consider painting business names.
- Choose your business structure.
- Get a painter’s license.
- Open a business bank account.
- Get painting business insurance.
- Establish painting services and prices.
- Choose your painting equipment.
- Set up accounting and bookkeeping.
- Invest in painting business software.
- Advertise your painting business.
- Get your first customers.
- Document everything.
- Hire subcontractors or employees.
Get ready to learn how to start a painting business.
Step #1. Learn professional house painting skills
You’ll need to learn how to paint professionally to avoid making mistakes that cost you time and money. Potential customers expect you to protect their property and don’t want to request touchups after you declare the job done.
Make sure to develop painting skills, like:
- Protecting the space
- Knowledge about acrylic, latex, and oil paints
- Using primers for interior painting (some exceptions apply)
- Properly using paint brushes, rollers, and sprayers
- Scraping, sanding, and patching
- Applying an even coat
- Cutting paint
And don’t forget to always paint a room from top to bottom.
Step #2. Research the market
This article is a good start for understanding the market and financial viability of a painting company. You’ll want to do more research to understand whether a painting business will be successful in your area.
Research the number of local painting businesses and their reputations, pricing, and services. You’ll also want to know how many area homeowners there are, or the number of potential commercial clients.
Understanding how others market their painting companies will help you manage your painting business so you can differentiate your marketing strategy from the rest of the pack.
Step #3. Create a painting business plan
Painting business plans help you, lenders, and your employees understand the company’s values, unique value propositions, and intended operations.
You can make a simple one-page business plan just to help you keep your business on track, or you can create a more extensive business plan for when you apply for business loans.
Carmelo told us:
[su_quote]I was young and gung-ho and didn’t have a plan. But now, I warn people [that] failing to plan is planning to fail.[/su_quote]
Learn more in our business plan writing guide.
Step #4. Consider painting business names
You’ll need a professional name for your painting business. Your business name will be how people recognize the business. It should be fun, easy to spell, and identifiable as a painting company.
You should look up your painting company name ideas on the United States Patent and Trademark Office website and other search engines to make sure the business name is available. Then you’ll want to choose your business structure and register your business.
Step #5. Choose your business structure
Painting contractors will need to register their painting business with their Secretary of State and potentially their local government. You have a few business structure options when starting a painting business, but the most common types are a limited liability company or sole proprietorship.
A limited liability company makes your painting business a unique entity (as long you keep your personal and professional finances separate). This prevents you from being personally liable if something occurs within the business. There are also tax benefits to a business being a separate entity.
Meanwhile, a sole proprietorship is a business structure where you and the house painting business are one entity, which means if an accident happens, your personal assets can be taken to reimburse the client or employee.
Learn more in our guide to business structures.
Step #6. Get a painter’s license
Many locations require you to become a licensed painter when starting a painting business.
A painter's license is just a business license that requires you to prove you have the insurance your area requires you to have. The best insurance to cover everything is often a business owner’s policy, but we’ll discuss insurance more below.
There may be other requirements, including testing or job experience, depending on the location.
Step #7. Open a business bank account
You’ll need a business bank account to keep your personal and business expenses separate. You can choose to get a business bank account from:
- Brick-and-mortar banks: These banks are local to you, have higher probabilities of approving loans, and are easier to deposit cash.
- Online-only business banks: A business owner can benefit from an online bank with lower fees and higher interest rates on savings, but it’s harder to deposit cash and get a loan.
Step #8. Get painting business insurance
A successful painting business needs insurance to protect the business owner, their employees, and their commercial and residential painting clients. You might be wondering, what insurance does a self-employed painter need?
The small business insurance you need when starting a painting business is:
- General liability insurance: This coverage protects you if your painting company accidentally damages or hurts a non-employee. It is typically a $1M per occurrence or $2M for a lifetime policy, but some local governments or commercial clients may require higher limits.
- Workers compensation insurance: You’ll want this in case anyone gets hurt on the job. It will cover their injuries and their wages as long as they weren’t negligent or intoxicated. This is mandatory in nearly every state.
- Unemployment insurance: This insurance protects workers who get laid off. It’s required by law in every state.
- Commercial auto insurance: You’ll need separate car insurance for your business vehicles.
Many of these can be combined into one plan with a business owner’s policy. You can learn more in our business insurance guide.
When you’re ready, we suggest going to Simply Business to get quotes from the largest insurance companies in the world.
Step #9. Establish painting services and prices
At this point, you have a business entity, business license, and insurance. You can operate your own business, but what services are you going to offer, and how will you price painting jobs to establish positive cash flow?
To give you an idea, we’ll cover Spray-Net’s services and pricing.
Spray-Net offers three main services:
- Exterior painting: They have spray coatings that work on exterior vinyl, stucco, brick, and doors or glass windows.
- Kitchen cabinet painting: Spray-Net offers indoor services, as well, such as cabinet painting.
- Roof re-granulating: I wouldn’t think to hire painting contractors if my roof has issues, but Spray-Net paints roofs and says the painting job adds 15 years to the life of the roof. Check out their explainer video below.
They price each job either by the square foot or the number of cabinets. They also provide an online estimator so potential customers can get an idea of how much the job will cost.
Their average ticket for a painting job is $5,815, which puts it between the cost of replacing and standard repainting. They offer warranties nearly three times longer than most residential painting companies.
Before you start a new painting business, you should probably look at their professional painting work. You might want to consider their franchise business model to make more money painting houses.
Step #10. Choose your painting equipment
As we stated earlier, when you start a painting company, you’ll need:
- Drop cloths
- Extension poles
- Paint trays
- Rollers
- Truck or van
- Painters tape
- Sprayers
- Mixers
- Paint brushes
- Booties for your shoes
- Respirators
You can get these at Home Depot, Lowe’s, or any paint supply store.
Step #11. Set up accounting and bookkeeping
You’ll need a good accountant and bookkeeper to keep your financials in order and help you comply with taxes. Ask other business owners in your area who they prefer.
Step #12. Invest in painting business software
You'll need software to run your own painting company. Here’s some of the essential software:
- Website: You’ll want to build a website. Which means you’ll need a domain name from somewhere like GoDaddy.
- Customer relationship management (CRM) system: You’ll also need to have a CRM to manage all your customers. Small business owners tend to like Jobber or Housecall Pro.
- Accounting software: You’ll want to get QuickBooks to manage your small business’s finances and payroll. A small business owner can make themselves an employee to receive a weekly paycheck.
- Payroll processor: A modern small business will need to accept credit cards, which means you’ll need a payment processor like Square.
Step #13. Advertise your painting business
Successful businesses require marketing to grow. Most small businesses in the service industry will use a combination of digital marketing and print marketing.
Carmelo explained:
[su_quote]We started by knocking on doors. Then when we painted town hall [and got news coverage for it], which created more jobs.[/su_quote]
Then he expanded to digital marketing and traditional marketing.
[su_quote]We spend $3-4M across the system, but you should spend about 10% of your revenue on marketing. Facebook and Google are best. Then you’ll want to add [NextDoor].[/su_quote]
Many people want to focus on branding, but Carmelo has other advice about how to start your own painting business.
[su_quote]Facebook and Google gets you in the door—then tell people about your brand [while you are providing a quote].[/su_quote]
Once you hit the point of diminishing returns on ads, it’s time to start making YouTube videos. Another marketing technique that helps drive customers to your own painting business is appearing on business shows.
[su_quote]DragonDen (similar to SharkTank) reached out. I originally said no, but after a few times, decided to do it. The business was so crazy Microsoft thought our server was broken.[/su_quote]
Next, you’ll want to get your first job.
Step #14. Get your first customers
A house painting company can use all kinds of techniques to get that first customer. Carmelo preferred going door to door.
You might want to practice painting pitches before you start providing quotes for painting houses. Carmelo used the one below when starting a painting company.
[su_quote]I noticed [this thing wrong on the house]. Did you know we can fix it for $X?[/su_quote]
After explaining the hows and whys, Carmelo continued:
[su_quote]I’ll give you a quote, then give us a call anytime. We’ll be in the neighborhood, so you should see us around.[/su_quote]
It might help to bring some painter's business cards. We cover the places you can get low-cost house painting business cards in our inexpensive business card guide.
Carmelo went on to explain:
[su_quote]Customer service is the biggest thing. There is a luck component to business. It’s a lot of hard work, but sometimes it’s just a matter of being at the right place at the right time.
For instance, when we got the town hall job, it was because we painted the house of a person working there. I strategically priced it to get the job for publicity. Then we got the press to cover it.[/su_quote]
You’ll also want to be careful about how much you take on at first. One of the biggest mistakes you can make is growing your painting business too fast. Carmelo explained:
[su_quote]We grew so fast that I stopped paying attention to the numbers. We reached a point where I wasn’t able to pay for payroll, and I had to change that.[/su_quote]
Step #15. Document everything
Before you hire employees or subcontractors, you’ll need to make sure to document your processes so you can teach them. As Carmelo said:
[su_quote]It’s especially important to [document everything] if you have ambitions to scale.[/su_quote]
This can include creating videos explaining everything you do on a job, typing your processes out, creating interactive tutorials, or all of the above. Carmelo explained one method he uses for documenting the processes for his specialized services:
[su_quote]We put a QR code on every paint can for the painting business pro to learn how to use it effectively.[/su_quote]
Step #16. Hire subcontractors or employees
Unless you want a really small painting company that just covers your salary, you’ll need employees or subcontractors. That means you’ll need a payroll processor. You’ll also need to do interviews and background checks.
Carmelo told us:
[su_quote]I base my hiring decisions based on whether I like them. If I don’t, I’m not going to like working with them. The other stuff I can teach.[/su_quote]
You can learn more about hiring straight from a recruiter in our hiring how-to.
Spray-Net franchise offer
Now you know how to become a house painter. Want to skip all the learning about how to get painting contracts, the average cost of painting a room, and advertising painting services?
Carmelo has a special offer for UpFlippers who want to learn how to become paint contractors. You can get a Spray-Net franchise and save.
Painting business influencers
You can find painting influencers like Carmelo and check out their videos, blogs, and social media to help inspire your own painting business.
Painting business resources
It’s useful to pay attention to industry trends as you learn how to start a painting company. There’s no better way than participating in industry organizations like:
- Commercial Painting Industry Association: Annual membership is $395 and comes with a peer networking group, networking events, webinars, subcontractor reviews, and more.
- Painting Contractors Association: Annual membership is $499 and includes annual awards, painter training, a streaming service, event and industry discounts, a recruitment portal, healthcare options, a magazine, and safety templates.
Start your own painting business
We’ve discussed how to get into painting with minimal startup costs, our special franchise offer for starting a painting business with no experience, and painting business resources that will help you as you go.
Ultimately, it’s up to you to put together a plan, get the startup costs, and open your business legally.
Will you start a house painting company, school painting company, or another type of painting company?
Comments
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2023-09-15 17:36:13
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2022-05-31 14:10:09
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