Common seller tricks in painting
A busy year is not the same as a book of business. Sellers will highlight a large project and skip the quiet months and the callbacks on peeling work.
- One apartment, HOA, or general-contractor relationship treated as the company’s normal volume.
- 1099 painters who may be misclassified, or who will not show up for a new owner.
- Leftover paint and materials listed at retail when much of it is worthless.
- Warranty work on jobs sold cheap to ‘keep the crew busy.’
- Interior winter work invented on the listing but thin in the monthly numbers.
Which numbers to verify
Split interior, exterior, commercial, and residential. Look at monthly revenue against weather. Job-cost a sample of larger bids: labor hours, materials, and callbacks. Reconcile deposits. If the owner still sells every job and runs every crew, recast that time. Backlog should be signed work, not hoped-for quotes.
Licensing and key-person risk
Contractor licensing, lead-safe (RRP) certification for pre-1978 housing, and sometimes municipal registrations are required. Lead-safe compliance is not optional paperwork; it is a liability if the company has been skipping it. Confirm the firm’s certifications sit with people who are staying, or that you can obtain them before you take similar jobs.
Equipment and condition
Sprayers, lifts, scaffolding, and vans need a hard look. Rented lifts may be a hidden cost. Inventory of paint often should not be valued at cost. Ask how much work is sprayed versus brushed, and whether the equipment matches the claimed mix.
Seasonality and the calendar
Exterior work is a weather business. In many markets a few wet weeks can wreck a month. Interior and commercial work can fill winter, but only if that work actually exists on the P&L. Close timing matters; a late-summer buy can be followed by a dead fall.
Customer concentration
A property manager’s turnover work or one general contractor can be most of the profit. Those accounts rebid. Get percentages and termination terms. Retail residential is more fragmented but depends on reviews and the estimator — often the seller.
Questions to ask before you make an offer
- Please break out revenue by interior, exterior, residential, and commercial, by month, for three years.
- What share of work comes from your largest three customers, and when are those relationships up for bid?
- What backlog is signed versus quoted?
- How much labor is W-2 versus 1099, and have you had any classification or wage claims?
- Who holds lead-safe and contractor licenses, and who will hold them after close?
- May I job-cost a sample of completed projects, including callbacks?
- What equipment and lifts are owned versus rented, and what is their condition?
- How many estimating and production hours does the owner still work each week?
- Are there open warranty claims or disputes over finished work?
- After an LOI, may I speak with your accountant and a crew lead?