From Solo Painter to Freedom-Focused Business Owner: Mihai's Journey

Welcome to the Profitable Painter Podcast. The mission of this podcast is simple: to help you navigate the financial and tax aspects of starting, running, and scaling a professional painting business. From the brushes and ladders to the spreadsheets and balance sheets, we've got you covered. But before we dive in, a quick word of caution. While we strive to provide accurate and up-to-date financial and tax information, nothing you hear on this podcast should be considered as financial advice specifically for you or your business. We're here to share general knowledge and experiences, not to replace the tailored advice you get from a professional financial advisor or tax consultant. We strongly recommend you seeking individualized advice before making any significant financial decision.

Welcome to the Profitable Painter Podcast, the show where painting contractors learn how to boost profits, cut taxes, and build a business that works for them. I'm your host, Daniel Honan, CPA, former painting business owner, and your guide to mastering the numbers that drive success. Let's dive in and make sure your business is more profitable one episode at a time. I'm super excited today to speak with Mihai, who has an amazing painting business up in Ontario. Welcome to the podcast, Mihai. How's it going?

Very good, Daniel. Thank you very much for having me. Nice to be here.

Yeah, I'm glad to have you here. I know you're killing it up there in Ontario. Can you give listeners an idea of you started and where you are now. Uh, just when did you get started in the painting industry and what have been some major milestones along the way?

Yeah, so I, uh, I moved to Canada in 2013. Um, I worked for a painting company here for about a year and a little bit, uh, just in the beginning. And then in 2015, I opened the company. I just branched out on, on my own, just being on the tools and, you know, one-man show, like, uh everybody else, or almost everybody else. And I worked by myself for about 3 years, and then I started hiring some people, and I failed miserably in the beginning. That didn't quite work. Everything kind of changed, and I would say this would be the first milestone, is when I, when I joined the Business Grush group and met Nick May and all the guys in there, and I attended the Crank event in Denver. And that kind of changed my perception about everything, you know, in terms of hiring, in terms of business type, because I don't have any business background or nothing. And there was a little bit of an eye-opener that, you know, more could be done with a painting company than just, you know, make a living and, and be an employee, basically. And then from there, I, I believe it was 2020 when, uh, when I started to hire a little bit more than, you know, a helper or two or here and there, and I really got serious about business. So from there we grew. In 2023 we had, uh, 9 painters on staff and a project manager. And then since then we dropped down a little bit, so now we have 7 painters and 1 project manager to date.

All right, awesome. That's great. So it sounds like you, you know, you were the owner-operator 2015 for a few years. It sounds like you had some mind shift changes in around 2018, 2019 and really started getting serious in 2020 to 2025. And it looks like you had some really strong growth between in those 5 years.

Yeah, we did. Sorry.

Yeah, no, go for it.

No, I was just going to say we did. We, I mean, we're not quite the typical painting company. Money, right, that you hear that, oh, we scaled from like, uh, $200,000 to a couple millions or something. We're still close to a million. We, we never broke the million. Uh, this year we're probably gonna be at around $960K. That's what, uh, that's what the prediction is and stuff like this. But, um, again, um, we could probably be a lot bigger, but we decided that we're just very niched on what we were doing, right? So we, we only did the interior, for interior residential and kitchen cabinets. We've added that in, in 2020. We've also targeted kind of the, the 15 to 25% of the top earners in town, so that kind of limits us quite a bit. Now forward to this date, we're kind of starting to change that perception a little bit, and we incorporated exteriors and we've incorporated some commercials. So we're kind of trying to expand because we realize that You know, we're, we're kind of locked into our potential on how much we can grow. We, we reached 10 painters. That was like probably the, the highest that you could go in a place we are. Like where I'm at in Sudbury, Ontario, we have about 160,000 people. So we're pretty limited to, uh, to how much we can grow to that level, you know, and that, uh, that prices that, that we're charging. So yeah, that's kind of like the Thank you.

Yeah, so it sounds like you're, you're initially focused on interior and cabinets, and that allowed for some, some good growth, uh, to $1 million in revenue. And with the population only being 160,000, you feel like to really get beyond that, you need to add some additional services like exterior to, to basically increase the revenue from that point forward.

Is that Yeah, it's either that, either we cut down on quality and we drop our prices because we're constantly told that we're double the price than the next guy everywhere we go. Yeah, right. So that's a little bit harder to do and I don't really want to slash prices. So then I'd rather just expand a little bit in the areas where, you know, we could and still keep our healthy profits and everything.

Right. And you said 160,000 as the population, but you're targeting specifically like very high-end, uh, wealthy individuals so that you're actually working off a lot smaller population, probably, right?

Yeah. So maybe the top 20% of that, or maybe pretty much, yeah, the top 20%. And then every so often, like, we get into, into, you know, some people that get into money, either they got an inheritance or something like that, and, uh, you know, they, then they can afford us and stuff. But the majority of the people, yeah, it's there. So any, any kind of other jobs that we go with we found that it's kind of a waste of time to just go and quote because we never get the job. It's always the same thing. Oh well, what, what, what are you doing, you know, that you're so much higher? And, uh, you know, I think we have pretty good value propositions and everything, and we do provide a lot of value. But for people that don't have money, I don't think that really matters. You know, if they're not your clients, they're not in your target market, then no matter what you, what you give them or what you do, if the price is too high, you know They're not just not going to hire you, in my opinion anyway.

Yeah. And with the, uh, with the population you're targeting, the top 20%, that really means you're only, you only have about 30,000 in your, your niche with, with the, the pricing, the premium service that you're providing.

Pretty much roughly around there. Okay.

And so, so with that, you, you know, if 1% of that population, of that 30,000, is getting painting done per year. That's a few hundred per year. So yeah, you know, that's definitely— or yeah, so that's definitely— you probably have a good portion of the market, it sounds like, of that target market.

Yeah, like, I mean, we don't have issues there. Whenever we're in front of a right customer, there's no— they don't get other quotes. There's no doubt that we're the choice for them, right? Price is not an issue. It's like, I don't really care how much it is, I know you guys are going to do a good job, you're going to be here, I don't have any issues, let's just do it. And we are getting quite a bit of repeat customers now because we're on the 10-year mark this year. And for the first couple years we didn't get anything, but now we, we see quite a, quite a big percentage of those customers, uh, just reaching back out because either they move into a new home, either they're ready to, to repaint their homes and stuff like that.

Nice. And yeah, that sounds, that sounds like a good, uh, strategy to, well, one, reactivate past customers, makes a lot of sense, uh, to get repeat work, but also adding another service in that area since you're, you have a great relationship with your, your target market already. Add in, um, services that are close, you know, exterior painting, you're already doing interior painting. So that makes sense.

That, that helped us quite a bit because whenever I send the, the first mailer out saying that we're starting to do exterior, we got a big influx of our repeat customers just saying, oh my God, I'm so happy that you guys are doing that now. I have this, I have that, I have the other thing, you know what I mean?

Yeah.

So we, we got a lot of jobs that way to start, which is nice because it's the same thing. You can, you can charge the pricing that you want and maybe a little bit higher just to kind of, uh, you know, make sure that you don't lose your shirt in the beginning when you first learning production rates and all that stuff. Yeah, I mean, I got a lot of production rates from other people in the community and stuff, but until you get your own, you know, you're still kind of winging it.

Nice. Now that's awesome. And, uh, I'd like to go back a little bit, um, yeah, to in 2019 timeframe. Sounds like you had some mind shift changes in regards to hiring. Could you go into more detail on what was holding you back? Maybe some mindsets that you had that kind of were limiting you and what changed and how did that impact your business?

Absolutely. Like for me, I'm a perfectionist and like since I started, I was just every nick, every little thing, everything has to be perfect, right? And then when I first started hiring people, I was just like, what the hell, man? Like, do you not see that? Do you not see that? Like it was just basically you know, nobody was good enough for me or doing a good enough job for what I was expecting. And I lost a lot of people like that in the beginning because I was hiring people with experience, right? And I mean, probably the worst person to work for when with that attitude and that mindset. And then I remember I saw a video from Nick Slavik on Ask a Painter Now when he was saying, you know, the customers are probably only expecting about 70% of the quality you're giving, you know, 80-85%, and you should not ever expect 100%, right? And that was kind of the first thing that I'm like, maybe I am a little bit, you know, like trying too hard, and maybe I don't really need to go that extra mile because nobody's ever gonna see it. And so that was the first, the first thing. And then I always thought that, okay, you're never gonna be able to find people to work for you. It's, you know, it was that mentality that you can find people, you can find good people, and, uh, and all that stuff. And it was also limiting myself that I'm in a smaller market, and I kind of knew almost all the painters. Nobody was doing a good enough job. So I'm like, okay, well, I guess I'm just gonna be by myself, you know, and just make a living like this. Decent living, mind you, but you know, you're still an employee. Like, it's, uh, that's what it is. And then, uh, the next big change was when I went to to the Crank to Denver, and I met Nick May and a lot of other guys on that program. And, you know, I saw that everybody had bigger businesses and they had, you know, 10, 20, 30 guys, 40 guys. I'm like, well, obviously I'm missing something because if so many people can find people and can build a business that thrives and, you know, is profitable and you can get yourself out of the field and just focus on the business side of things and actually just treat it like a business, right? So when I came back, you know, I just kind of went with that attitude and just tried to not expect as much from the people and just kind of try to give a break and to understand that nobody's ever going to do it as good as I'm doing it, to my standards anyway, like to myself, and that nobody's going to give a crap— excuse my language— you know, as much as I do for everything and just really started to build systems instead, right? Rather than every time going on the field and just lay down on them and, hey, you didn't do this, you didn't do this and stuff. I'm like, okay, well, how can I reverse this? How can I be proactive? So I make sure that all these things are done in advance. So started implementing company meetings every Wednesday morning. That's like standard, no matter what happens, 8:30 to 9:30 is a full company meeting with everybody. Started building manuals and started building core processes and pretty much everything, you know, like you're explaining to a 5-year-old, like, okay, this is how it has to be done from start to finish. And then really enforcing those things. And I'm pretty lucky to have all the people that are working for me. They kind of buy in the vision that I want, and they're people that take pride in what they're doing. And, you know, they pride themselves on doing a good job. And from the beginning, when I started these company meetings, I involve them into the process from start to finish. So, you know, today we were talking about patching, let's say, let's build the procedure for patching and then getting everybody in there and getting everybody's input and basically creating the systems with them. They bought into it and they kind of feel they're a part of it and they have to do it that way because we all agreed to it from the beginning. And that made the world of a change, you know.

Yeah. Okay, cool. So it sounds like one of the mindsets where your standard was so high that it was the customer doesn't even care about the things that you were caring about. It sounds like, like, you, yeah, like the PCA has the standard for a painted wall. It's like, it should be covered if you can stand 5 feet away and under lighting with no, you know, assistance to look at the wall, if it looks good, then it's good, as opposed to using, you know, a spotlight and with a magnifying glass up to the wall, you know.

Yeah. So yeah, it sounds like it was a very, very unattainable, um, level of, uh, of finish that I was looking for.

Yeah. Okay, so you kind of adjusted it so that it was meeting the standards of your customers and who have probably have high standards, but you were just way above them. So just tweaking it down a little bit allowed you.

Yeah, just kind of go in between, right? Like just lower my standards a bit to where I can make them attainable for people. Yeah. That would, I mean, for people to be able to keep them on staff as well and not, you know, not frustrate them to the point that they want to quit.

Makes sense. Okay. So that was one mind shift change that allowed you to bring folks on and still have high standards without overburdening them with crazy standards. It sounds like.

Yeah.

And then, and then additionally, you, you know, you started building systems for your team that are like off the street available so that they could just read it, understand it. And they also help create. Because you're involving them in those daily meetings, which I think is really crucial to it.

I think that was the one thing that made the biggest difference because otherwise I think I would have still struggled if I just put everything together and I would have just gone, okay, you guys have to do this. You know, it would have never flew.

Yeah, I think that's a key piece because a lot of folks listening probably have heard you got to create systems. Like everyone hears that you got to create your processes. But I don't think enough emphasis is probably put on involve your team in the creation of those processes so that they are bought into it and they actually, they feel like there's ownership there where they created it or they helped create it. And so now they feel like they need to, like psychologically, they have to make sure it works and they follow it. Is that what you've kind of seen?

Pretty much, yeah, pretty much. And we've, we've kept that going, right? So even to this day, every, every time we meet, we discuss things and how can we change, what do we need to change, what do we need to keep doing, what do we need to stop doing. And, you know, is, is there a better way? Is there a new product that we could be using to make our life easier or to make your life easier? Because they're the ones in the field working with everything, right? Um, so That really helps. And that really, like, everybody's been saying that they, they can't wait for the company meetings, right? Because it's interactive, it's, it's always, you know, it's a way to improve, it's a way to make their life easy, and as a whole, to the whole company, pretty much.

Yeah. No, yeah, what you just said reminded me of, uh, I think it's the UPS founder, I forget his name, but he would always ask his, his lower-level employees, that one, the ones who are actually doing the work, he would always ask them some question to the effect of What's one thing that you would stop doing in the business, or one thing you would start doing in the business, or one thing that we're doing really well that you feel like we should keep? So there's always that feedback from folks that are actually executing the work, because sometimes as a leader, you're like, you're up in the tower and you're not in the day-to-day doing the work. And so you can kind of lose touch with what, what's working and what's not working.

Absolutely. You, you tend to think that you know everything that's happening, but you don't.

Yeah, cool. So you, you kind of had some mindset shift changes there. You brought on a larger staff, you created ownership and started to see the growth. What are some other challenges that you kind of had to overcome in that growth period?

Well, the next one was when I, when I hired my project manager and, you know, there was, there was the delegation part and letting go of things. That was the next one because, you know, I was kind of a control freak. I really needed to know everything and do everything. And if somebody wasn't doing it right, I was the only one that could do it right or fix it. Or, you know, rather than spend the time to teach somebody how to do it, I was just like, oh, it's going to take me longer to teach you. I'll just do it kind of thing, right? So that was kind of the second part. Okay, how do I remove myself from all the things that I don't have to be involved? With and just empower people and, you know, train and just build that culture of, you know, taking ownership for mistakes and for all that kind of stuff. So that was, uh, it was probably a hard year, that one, just, you know, mentally more than anything. But, uh, I mean, uh, we've kind of overcome it. Like, I still have the tendencies every once in a while to just revert back to that, and then I'm just reminding myself, nope, not a good way. Stop, you know, be a leader, not be a, you know, like a manager kind of thing. Mm-hmm.

At what point, like revenue-wise, were you— when you determined like, hey, I really need a production manager?

So this is a little bit different than every other company as well, because my project manager, I trained him from the ground up. So I took— he came in as an apprentice. In 2020 and then taught him painting and everything. And he really showed interest in, in being with the company in a more managerial role. And we've always been talking because the goal for the company is to expand out of this area, so open more locations to, to bigger cities and, you know, expand that way. And, um, you know, I'll just keep on talking with him in the beginning, okay, would you be interested in, you know, taking maybe over this location or maybe, you know, being in a general manager position or stuff like that? He did have some positions before where he was working as a manager in some other departments and some other areas, some other fields, and he showed great interest. So we kind of roll with that idea right from the beginning. Okay, well, we'll teach you this, I'm gonna teach you this and all that. So when we had 5 painters, we decided to, to do a hybrid role. So, um, based on all my calculation, we would need to have 8 painters on staff to be able to, to make sense to hire an overhead position for a project manager. So we just calculated the percentage. Okay, if we have 5 people, then you'd have to be 40% in the field still and 60%, you know, doing the project manager stuff. So that's what we pretty much did. And then at one point he became full-time when we were at 10 painters. And then now it's because we scaled back, he's back at like 30%, or I think it's 30-something percent that is in the field. So that way, uh, it still allows me to, to have freedom from the field in terms of projects and, and everything. And, um, you know, it's a little bit more harder on the bottom line, a little bit, you know, just because sometimes, yeah, we do have 5 or 6 painters, but you know, there's vacations, there's all this, there's projects, or there's inefficiency in hours and stuff like this. So you, you can really kind of feel it in that, in that point, right? But I'm very happy to just not have to be there all the time and be able to focus on the things that really matter for me and, you know, have my time and enjoy my life to the way I want to live it.

So yeah, I think that the way you handled bringing on that production manager sounds really smart because you, you basically have a blended role. And so 10 painters would mean that you would need a production manager to manage them. 100% of the time. But if anything below that, you basically— okay, if we only have 8 painters, that's 80%. If it's 6—

no, it was— it would be for 8 painters, that's 100%. That's a full time. That's, that's how I calculated. Yeah, based on our numbers and everything. But it was easy for him to do 10 because, you know, it was still kind of the same amount of jobs because 3 of those were trainees. So, you know, when you put weight for weight, it was still kind of like 8 point 2-5 painters or something like that based on their weight. So it was good.

So 8 painters, 100% production managers. That's like 4 crews approximately if you're doing 2-man crews, right?

Yeah. Something like that.

Okay. And then if, if there was only 6, then there, he's basically 75% doing production management work and the other 25% he, he's doing, he's grabbing a brush and he's painting with the crew. Yeah.

Yeah. Okay.

Cool. Now that's a, that's a, a cool way to kind of think about it and, and basically have that blended role so that, you know, it's a win-win still. Cause a lot of folks, I feel like they, when they're trying to hire a production manager, they feel like it's all or nothing, you know, where I need a production manager, they're going to just do production management and not blend the role at all. And so it kind of handcuffs them into that. And when, when I think that that's a creative solution, I think that seemed like it worked, it's working. It works beautifully.

Like he's He's been for 2 years now, 2 and a half years in this role. And I've also been training him into sales and stuff because ultimately he's going to be taking over my position as a general manager when I move from here and open another location and stuff. So what does that allow me to do is like I can leave any time from the company. So last year I took 3 months vacation and I was out of the country for the most part. And he was pretty much running the show, right? Sales and everything. And like, I have commissions and bonuses and everything tied to it, so they're making really good money. I probably made the same money last year as he made, right? But for me, what that allows me to do, having the freedom to just leave whenever I know that everything's being taken care of, and, you know, also knowing that I'm not sacrificing the net for it just because, you know, it's hybrid. Like, if I'm not here, I don't pay myself. I mean, I pay myself, but you know, you know what I mean? Like, I'm just kind of like I'm a shareholder. When I'm not around here. He's taking the, the percentage and everything, so that's been working really good.

Yeah, no, that's, that's amazing. 3-month vacation last year.

Yeah, it wasn't all in one, it was broken up, but it accounted for 3 months.

Yeah, it's still—

I was gone for a month and a week the longest, so 5 weeks. Yeah, that's awesome to come back to, so it was good.

And so, um, so during that point in time did you have someone doing sales, or like, how did that work?

So it was like, I was helping him as well with the sales. So he was doing, uh, like, he was doing all the appointments, like going in, taking all the measurements and all the dimensions and stuff. And he was putting together the quotes that were the simpler ones, and then I was putting all the other ones, right? Because we're very, very heavy on systems. Like, we have everything systematized, and we're about 90% automated. On everything. So we— that part runs like clockwork. So it's, uh, it's pretty seamless. So I mean, for me it worked because I mean, I'm still working here and there when I'm putting quotes together, but you know, it's different when you're working from Europe in a country on a beach or something. And, uh, you know, doesn't really matter. Don't really find it like work as long as everything's running smooth here and the people have work and everybody's happy, then that's all that matters.

Yeah, no, that's, that's amazing. 3 months vacation, you're pretty much out of the loop and, uh, he's taking, taking over things. And so, um, you're just helping him out a little bit with the more complex stuff, it sounds like.

And yeah, and then, you know, I was still a resource for him. So if, if there was something that he couldn't handle or something that, you know, he needed help with, I'm always there, right? Like, my phone is on, my email is on. Like, I don't— it's kind of like a hybrid vacation, right? I'm there, but I'm still kind of taking care of the things here, right? Which I don't mind at all.

Yeah, and I think you guys do virtual quotes, right? Where they—

we do, yeah.

Is that so?

We do both. So we give the people the option. Whenever somebody inquires, we give them the option. It's like, listen, we can either schedule an in-house estimate or we can send you this form and you fill it up. Which option do you want? You know, there's benefits to each and there's downsides to other. But we find that a lot of people, maybe they have busy schedules, maybe they can only be available after hours or weekends, and we keep it straight from, you know, the working hours. And, you know, they take that version, the virtual quote, and, you know, they get a ballpark. If everything looks good, we'll then schedule an in-house estimate. Because if we know that, you know, the price looks good to them and they want to move forward, then I'll go in the evening or in the weekend to meet with them, you know, on their time. But otherwise, you know, if we don't have that first level of, you know, understanding, then doesn't really work.

Yeah, so if, if they were expecting it to be $500 and it was $5,000, then you saved yourself the time of having to— yeah, to go out.

And I mean, we, we talk about all this on the, on our, uh, discovery call, right? Like when, when people call us and, you know, we kind of vet them and, uh, you know, kind of throw some ballparks here and there just to see how, how they feel about it, especially with cabinets, because it's a lot easier, right? And then for, for interior painting, we kind of, based on all the data, kind of developed the pricing for floor square footage as well, you know, depending on what you need done. So because the majority of people when they call, they say, oh, I have a 3,000 square feet home, how much is it going to be to paint, right? We get that question all the time. And I was always saying, well, you know, that if we paint the floors or the ceilings then only, then I could tell you, but otherwise it's impossible. So I'm like, okay, well, how could we figure out a way where, you know, we can kind of give a ballpark to these people? So We just run all the data, and based on kind of square footage, we have a, like, a coefficient that we multiply it with, whether it's just walls, just ceilings, wall ceilings, trim, and everything. And we can kind of put a ballpark together, you know, okay, it's going to be between $7,000 and $9,000 or something like that. It's better than not having any kind of answer for them. And, you know, that kind of, oh my God, well, that's ridiculous, blah blah, and then end of conversation, you know, next. Kind of thing, or they're like, okay, yeah, well, we could probably work with that. And then, you know, we discuss further, we schedule an appointment or whatnot.

Makes sense.

Okay.

No, that's really interesting. So I like how you guys are incorporating that, that virtual quote component for those busy professionals that can't put a, you know, set aside an hour in the middle of the day on a weekday, you know, Yeah, yeah, most folks are not able to do that, especially high earners. So that makes a lot of sense. So with, with that, you know, it seems like you have a really great reputation based off, you know, a ton of reviews, all 5-star. And you've, you know, you started just, just yourself and you had really high standards, kind of adjust those standards, brought on a team. And you've been able to, it seems like, communicate your vision and they've bought in and you've built a great team to be able to continue to serve at a high level to high wealth individuals. What do you think has allowed you to really be able to do that and be able to leave for 3 months at a time? You know, do you have like core values or something that is keeping the team on track? And like, how do you ensure that the quality is staying intact even though you've grown your team so much since the beginning?

So we do have core values and, you know, like we talk about them often, but I think the core values are not important anymore. I think they're just built in in the culture within everybody, right? And I think one of the things, it's me not letting the quality go and still keeping high standards, just not, you know, unattainable standards kind of thing. So I was still on top of them like a wet rag whenever something wasn't looking good or something is, you know, it's not done the way they should. And, you know, I'm there every step. And even now, like, if something happens and stuff, like, I keep them accountable and If there's something that they messed up, they got to go back and fix it. It's all that thing. They know that unless they keep up the standards, they're going to have nothing but problems in the company. We lost a couple of people. They weed themselves out. Because if you're constantly being schooled and constantly feel like you're in kindergarten, you're not going to like that very much. On top of this, we also have a pretty good bonus system. So everything, it's based on production and quality and all that stuff, right? And that allows them to make really good money and it keeps them, you know, keeps them very engaged and very on top of things because, I mean, they would rather put that money in the pocket than go back and fix something that hasn't been done the first time. Together with that, there's a pretty high level of accountability and checking. So at the end of each day, every painter has to make an end-of-day report with exactly what they've done, with pictures of the area they've done. The project manager goes by on each job every day just to check on everything and talk to the customer and, you know, problem solve, see what's what. And at that level, we're also checking. And then the lead painters on the job site, they're responsible for checking all the time for everybody that's there. So each job has one lead painter assigned. That is kind of like the mini project manager, right? So among all those levels, I think we pretty much, you know, nail it.

Yeah. And so could you tell me more about your bonus system? So are you basically— you have budgeted hours, and if they are under the budget hours, they get a portion of that or all of that?

Yeah, pretty much they get all of that. So basically, if a house is budgeted for 100 hours If they're on 80 hours and it passed the quality and everything, they get those 20 hours as bonus. Okay.

So if budgeted for 100, they do it in 80, they get 20 as long as it passes a quality check. Is this done by the production manager or?

Yeah. Okay. By the project manager. And then there's a caveat to that because if there's ever a callback for that job, then that's going to count towards the bonus for, you know, it doesn't matter if that bonus for that job has been paid already, that's going to count into the total bonus for the next month or next period, right? Gotcha. Okay, so the bonus pretty like as soon as the, the job is done in the next month, at the end of the month, the next pay period, they're going to get their bonus for the previous month. Uh, and we keep this very accurately. We actually keep it per room, per person, how they work, right? Because, um, like if, uh, let's say you have 2 people working in an area or 3 people working, uh, Or how should I say it? Yeah, I mean, if there are multiple people working in an area, right, we kind of like to keep track of each area. No, I'm probably saying that's wrong. Sorry, you're probably going to have to cut that. If you would have, let's say, 4 or 5 people on a job site, right, and you're bonusing everything on a job site, it would kind of not be fair, right? Because if some people are working on a high area or some people are working in bathrooms versus something else, you know, that would be kind of, uh, not, not fair. So like this, we, we keep track per room. So let's say John worked in 3 bedrooms upstairs, then he's gonna be bonus just for those 3 bedrooms that he worked in, right? And that kept everything very fair, and they appreciate that because, you know, it's like, okay, well, it's I'm actually being bonused on my work and on my, uh, my productivity. Not, you know, somebody's slacking downstairs on their phone and I'm busting my, uh, my ass up here, you know.

Now that's really, really, uh, that's really cool. So, uh, because I've never heard of someone— I mean, obviously I've heard of the bonus system, uh, but not never by area. Um, so you're If, you know, John is assigned the bathroom and the hallway and the kitchen, he gets a budget for those 3 areas and then—

So everything is budgeted. Like when they get the budget, they get it broken down by room. So this bedroom has 5 hours, this living room has something, has something. And the way we do that at the end of the job when they do their— and I mean at the end of the day when they do their end of day report, Then they specify, they break it down exactly like how many hours I worked in this room, how many in this, how many in this with pictures and all the description. And that's, you know, that's being timed into the timesheets, but it's also broken up per room. So at the end of the job, you have exactly everything broken down with percentages. If there's, you know, 2 or 3 people working in the same room. So you say you have an open concept and somebody worked, you know, 5 days and somebody worked 2 days. Then that's broken down percentually based on how many hours they worked to the full hours of the job, or area, I should say.

If John, if he's under budget, well under budget, but Tim, who's working on the same job, and he did the living room and he went over budget.

Yeah, that's the caveat that, you know, as a company, I decided that I'm going to take a loss on that. If that means that people are going to be compensated fairly. You know what I mean? Because we've had jobs where, you know, some people are making 20, 30 hours of bonus, but the job is actually over budget. You know what I mean?

Yeah, yeah.

It's, you know, I wouldn't feel that it's fair for the people that, you know, that worked really good and they brought those rooms under budget. To be penalized for the other people that messed up, right?

Yeah.

I think that that's one of the things why our culture is really good, because they know that everything's very fair and very transparent and, you know, they never have to worry about anything kind of like that. But I know what you mean. Like, that's always— I'm like, why did I do this? I should have done it the other way around.

Yeah. I mean, no, that's definitely putting the— giving the employee a really great opportunity. And I'm assuming like the folks that are not hitting the budget, they're probably I guess, what's the process for them? Like, if you have someone that's consistently not hitting the budget since they've gone, they're not getting them, they're gone.

Like, in 2 months they're gone. They don't last because, uh, you know, I mean, fair enough, 1 job, 2 jobs, 3 jobs, maybe you have a bad period, maybe something's going on at home, you're not sleeping, things like that, right? But if it's consistently, then you know that obviously something's gotta give. So what I've done in the past, I didn't, uh, I didn't fire them, but I just dropped their price to the percentage that they're actually working. So we have, uh, um, our, um, our— I mean, not average— our— a painter that's at 100% weight, uh, it's making $30 an hour, and that's kind of the base. So if you're at 80%, then it would be 30 times 80%, right? So I just drop their salary to exactly what they're producing, and then there's no bonus there, but I'm also not paying extra. So that makes sense, kind of. That didn't really happen. Like I've done it a couple of times, but the people left anyways. Right.

So yeah, that makes sense.

Nobody's going to stick around then. And yeah.

Yeah, no, this makes sense. It sounds fair. Cool. Well, this has been a really great conversation. I think you've provided a ton of value to folks that are listening with the bonus, the bonus system that you just went through with the blended role that you have for your production manager. The mindset changes that you went through, I think, will help a lot of folks. Do you have any closing thoughts or anything for the audience?

I would say just figure out what kind of business you want for yourself, what kind of lifestyle do you want to have, and make that business work for you. Because I hear a lot of people, you know, I mean, it's very easy to get into the weeds and just, you know, listen to everybody how they say, oh, I've scaled to $3 million in 3 years, and, you know, we're making this much money and we have 50 guys and stuff. And yeah, it's sexy, it sounds good, right? Like to say I'm running a multi-million dollar business and all that stuff. But, uh, how does your life look like? How does your day-to-day like? What's the quality of your life? Are you enjoying the journey or is it just a struggle every day? You know, and I'd say like just to anybody, just try to figure that part out and then, you know, the rest just comes naturally.

Wise words, definitely. I mean, the business is there to support you. So I, yeah, I love it. That makes a lot of sense. Awesome. Well, I really appreciate your time today, Mihai. And I—

Always a pleasure.

Yeah, I really appreciate it and everything. And for the listeners, with that, we will see you next week.