Commercial Textured Coatings Nc


Creating income was not started by the company until 2003 after it was given a $60K painting contract as element of a $3M estate home construction project in the upscale Wakefield community in North Raleigh. That first year in company QC grossed $190K in total revenue which yielded approximately 25% in pretax gain.

With no salesman on staff and working with a nominal marketing budget, sales grew at an uninspiring rate to $294K in 2005, giving less than anticipated gains.

During the company' third year of operation Mr. Phillips decided to abandon the residential sector fully and pursue only commercial1 and industrial2 chances. While working almost exclusively in the commercial and industrial markets, the business grew by another $100K in 2006. The move from residential to commercial endeavors resulted in instant increases in profit margins.

By 2007 QC installed complex coating systems for quite big and renowned corporations like Pfizer, Progress Energy, Becton Dickinson, and Merck. The CMs/GCs QC partnered with comprised Zachary, BE&K (now KBR), MJ Harris, US Contractors, and Fortney & Weygandt.

Brand Demarcation

It immediately became clear to Mr. Phillips that the company should only operate within the confines of the commercial/industrial market. After spending several years working as a Quality Engineering Manager in the high-tech world of Printed Circuit Board production, the Creator was able to identify a level of professionalism and quality control in industrial construction that was entirely absent in the residential market.

QC has now established itself as an industrial painting contractor. It recently invested $6K in website upgrades, business card redesign, new logo and tag line, as well as a redesign of firm attire, i.e., t-shirts, golf shirts, and safety vests, etc. These changes are part of a renewed focus on developing the company brand.

QC's active customer base includes commercial/industrial GCs and CMs, together with industrial production businesses (OEMs)6. Care painting deals with Tyson Foods Sara Lee, and Herbalife involve the application of industrial, high performance coatings. Because of the intricacy of the services supplied, its customers are now billed by QC at a relatively high rate, particularly compared to the residential marketplace. Higher rates are well justified and pricing aspects are discussed in the subsequent section. The same essential variables that drive the cost of commercial and industrial painting up are also factors that pose barriers for smaller, less established contractors attempting to go into the marketplace.

Price Factors and Entry Barriers


The purpose of this plan isn't to chide the residential construction industry. There are a lot of subcontractors and builders operating quite successful companies working alone in the residential market. However, it is necessary to point out the differences in various sectors of building--if for no other motive than to underscore the competitive advantage potential in QC. Most residential building is performed by self employed (self-performing) contractors and subcontractors. Other than superficial inspections conducted by local municipalities, there is no regulation or oversight on residential projects, particularly when it comes to painting. There is rarely a written contract between GC and subcontractor. Because there is no contract, there are really no change orders, so additional work is performed at the subcontractor's expense. Residential projects are rarely audited by OSHA7. There are no formal processes for submittals, invoicing, quality reviews, scheduling, or closeout.

Conversely, in order to compete in the industrial sector, painting firms must comply with strict rules and regulations administered SSPC8 by OSHA, EPA9, Suppliers, Project Owners, CMs, Surety Businesses, and also The Department of Labor. Contrary to the claims of the Department of Labor, these conditions drive operating costs up substantially. Many small businesses simply don't understand these compulsory regulations, refuse to comply with, or cannot afford.

QC has successfully finished the prequalification process with lots of CMs and continues to pre-qualify for major jobs in the region. Since 2006 the firm has been developing security policy, standard operating procedures and types, and workmanship standards which meet or exceed business requirements. The business has compiled an on-the-job safety record which fulfills all business standards. It's a goal of the company NACE11, and to obtain multiple certifications with the important certification companies OSHA, SSPC.

Procedure and Product Knowledge

High priced stuff and high performance present problems for smaller, less seasoned painting contractors. Even the possible problems can burn the experienced contractor these products introduce. It is essential that installers have a comprehensive grasp of the explosive product characteristics and also the complex procedures needed to successfully apply high performance coatings. Price, process, and product knowledge are the key elements that keep a lot of painting contractors from competing in the industrial building arena. In fact, it's what keeps QC from competing in certain subsectors of the sector, e.g., water towers, mobile towers, and nuclear power plants.

An ill prepared surface can easily lead to a huge number of dollars in wasted time and materials --not to mention the irreparable damage to one's standing. It is challenging for project and CMs owners to accurately qualify a coatings contractor for use or a specific job requirement. QC is now in the process of compiling a group of certifications and files that will supply the information they want to thoroughly measure the qualifications and capabilities of the firm to project managers.

Administrative and Overhead

During the transition from residential and light commercial to industrial painting of QC, the overhead and administrative costs became clear very fast. There were easily forty hours logged simply preparing the paperwork required to perform the contract. The quantity of office support required to support the field operations is large and requires a particular degree of technical skill to do properly. Training records, NDAs, Drug Screens, Schedule of Material Submittals Values, Insurance Certificates, Change Orders, Security Strategies, and Federal, State, and Local Government documents all need to be filed with the customer before any teams are mobilized. This presents another entry barrier for lots of painting companies and is quite taxing on small businesses.

Other expenses which are commonplace to industrial painting contractors are insurance requirements with $10M coverages, bid bonds, payment and performance bonds, legal fees, bookkeeping services, equipment leases, and travel. Most projects require the leasing of heavy equipment such as swing staging, scissor lifts, booms, and scaffolding. Using this equipment adds additional paperwork, insurance requirements, and training costs, e.g., fall protection plans, safety plans, operator training, and a variety of Personal Protection Equipment (PPE).

QC spent $100K in 2014 on journey. Most of the work of the company is outside the Triangle Area. These are costs that are paid upfront which eats cash. Managing cash flow is crucial to being successful, with sixty to ninety day payment conditions being the standard for the majority of firms. Again, this is one of the more notable barriers to entering into, and successfully competing in, the industrial painting market. Hotel, per diems, fuel costs, and idle time for lack of work are all actual expenses which need to be financed well beforehand of progress payment receipts.


The preceding high level summary of the history of the company highlights some of the barriers QC has surmounted of doing business in its first decade. The organization has managed to browse the industrial building's entry barriers, and while doing so has created a commendable customer clientele. Coming off a record year in sales and profit, create substantial growth over the next five years and the company is poised to take advantage of its present click here situation.

With the best staff, legal and financial associates, advisors, and accounting firm, QC should make fast progress toward becoming one of the premier painting companies in the Triangle Area. The Creator expects the firm to make important advances in the following couple of years, as laid out in the ensuing strategy. Within the next five years QC painting crews are going to be a familiar sight on industrial building projects all across North Carolina and its bordering states.

Leave a Reply

Your email address will not be published. Required fields are marked *