Financial Model to Achieve 20% Net Profit

Eric Barstow graduated with an economics degree, seemingly destined for Wall Street. Instead, he stuck with the painting business he started in college—a side hustle that was already generating $110,000 a year while he worked only five to ten hours a week. Realizing the massive opportunity and low competition in the home service space, Eric leaned in. Today, he is the co-founder of National Painting Group, projecting $35 million this year, and runs Painting Business Pro. And guess what? He barely knows how to paint.

Eric’s entire model proves entrepreneurs don't need trade skills to build a multi-million dollar service business; they need systems. His strategy relies entirely on leveraging subcontractors—a method that fixes profit margins, eliminates liability, and perfectly manages seasonal slowdowns. He reveals his exact tactics for finding reliable subs (including his specific Craigslist and paint store strategies) and shares the "Phase Zero" marketing hustle needed to land your first customers, including his scripts for door-to-door marketing.

He details his proven sales process, including how to use price anchoring and specific incentives to close deals on the spot, and breaks down the financial model required to maintain a 20% net profit margin. If you want to build a highly profitable business without ever picking up the tools, this episode is essential listening.

Takeaways:

- You do not need to be skilled in the trade to build a successful trade business; Eric is an awful painter, but he excels at building marketing, sales, and management systems.

- Leveraging subcontractors instead of employees is the most efficient way to scale a service business, as it fixes your margins (fixed price per job), reduces liability, and allows you to scale up or down instantly with seasonal demand.

- Find reliable subcontractors by posting ads twice daily in both the "general labor" and "skilled trades" sections of Craigslist, or by approaching painters in unmarked vans at local paint stores.

- In "Phase Zero" (getting from $0 to stability), focus only on marketing that generates leads quickly, such as door-to-door sales and lawn signs. Avoid long-term plays like SEO or vehicle wraps.

- A highly effective lawn sign strategy is placing them near high-traffic retail areas (like Costco or Whole Foods) on a Friday afternoon, as city workers are unlikely to remove them over the weekend.

- Use "price anchoring" in your sales process. Before showing the contract, verbally tell the customer the typical price range for a job their size (e.g., "A house like this is usually about $6,000") to reset their expectations.

- Create urgency and close deals on the spot by offering incentives that also benefit your business, such as a small dollar amount discount (never a percentage) if they sign that day or agree to take an urgent open spot on your schedule.

- You should aim for a 20% net profit margin. A healthy budget allocates 50% to labor/materials, under 10% to marketing, 6-7% to sales, 6-7% to project management, and 7-8% to overhead.

- The market size is irrelevant; success depends on implementation. Eric has clients doing millions in revenue in towns with populations as small as 27,000.

- Build the business around your desired lifestyle from day one. By setting firm constraints (like working only 30 hours a week or never on weekends), you force yourself to build efficient systems rather than just working more hours.

Tags:  Business Skills, Service & Consulting, Subcontracting, Marketing, Home Service

Resources:
Grow your business today: https://links.upflip.com/the-business-startup-and-growth-blueprint-podcast

Connect with Eric: https://paintingbusinesspro.com/