Painting contractors typically spend $500–$1,000 to land each job. Set your deposit to cover that cost upfront so you have cash for the next customer, and aim for 45% gross profit to cover overhead and actually make money.
Do you know your average customer acquisition cost? Knowing your customer acquisition cost in your painting business can help you determine if you should spend more money on marketing to scale your business, and it can help you determine what your minimum deposit should be. So customer acquisition cost is the amount you spend to close a sale. These are things like Facebook ad spend, Angie's List cost, Painter's Choice lead cost, etc., and the commission you pay your salesperson. Most painting businesses have a customer acquisition cost of $500 to $1,000 per job they close. With an average job size of $5,000, that's about 10 to 20% of the job size. So number one, your deposit needs to cover your customer acquisition costs of 10 to 20%. This allows you to get cash to get the next customer. And then number two, your gross profit needs to be 3 times bigger than your customer acquisition costs. Your gross profit needs to be 45%, and this is going to make sure that you have enough cash left over to cover your overhead costs and your profit.
What’s REALLY Holding Your Painting Business Back? (Find Your Bottleneck in 5 Minutes)
