Growth Tips for Your Small Business Bringing Mindfulness to Your Work Surviving Australia’s Deadliest Natural Hazard
What’s your Heatwave Plan?
Payment Disputes With Domestic Clients
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CONTRIBUTORS
From the Editor
• Angela Smith • Andrew Gissing • Anthony Igra • Jim Baker • John Wilson • Leo Babauta • Lucinda Coates • Monroe Porter • Robert Bauman
EDITOR
Hi Everyone, Welcome to the first edition of the Aussie Painting Contractor for 2018. Now all the kids have settled into school life again and the morning traffic has got busier after the end of the holidays. This year we will continue to bring you the most up to date information on what is happening in our industry. We welcome back Dulux and Graco as sponsors of the Painters Training Wheels as well as Trade Risk with the great insurance deals that they provide our Members and the industry. Have you thought of employing an apprentice? There are federal and state grants in most states and territories as well as subsidies for Workcover when you employ them. For more information contact us and we will assist you with your needs. In the coming month the Painters Training Wheels is on the road again and this time heading out to Roma with a couple of stops on the way. If you see us on the road give us a beep and a wave.
Nigel Gorman Until next year, EXECUTIVE EDITOR
Happy Painting!!
Caroline Miall GRAPHIC DESIGNER J. Anne Delgado
Nigel Gorman
nigel@aussiepaintersnetwork.com.au
07 3555 8010
Contents 6 Bring Purpose and Mindfulness to Your Work YELLOW PAGES
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Is it worth it to advertise?
Cartledge Family
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death due to the excessive use of the lead
INCENTIVES: The Good and The Bad Australia’s ‘deadliest natural hazard’:
13 16
Switching from Sole Trader to PTY LTD COMPANY
19
Understanding Financials
30
22 10 QUICK GROWTH TIPS
Industry Idiots
34
for your small business
Important Contacts
35
Payment Disputes with Domestic Clients Glossary of Paint & Painting Term
25 28
what’s your heatwave plan?
Opinions and viewpoints expressed in the Aussie Painting Contractor Magazine do not necessarily represent those of the editor, staff or publisher or any Aussie Painters Network’s staff or related parties. The publisher, Aussie Painters Network and Aussie Painting Contractor Magazine personnel are not liable for any mistake, misprint or omission. Information contained in the Aussie Painting Contractor Magazine is intended to inform and illustrate and should not be taken as financial, legal or accounting advice. You should seek professional advice before making business related decisions. We are not liable for any losses you may incur directly or indirectly as a result of reading Aussie Painting Contractor Magazine. Reproduction of any material or contents of the magazine without written permission from the publisher is strictly prohibited.
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Bring Purpose and Mindfulness to Your Work Our work lives are filled with busyness, distraction, procrastination, responding to messages, checking on messages, and getting lost down rabbit holes.
like. We procrastinate more. Or we’re super busy, responding to a thousand things, making lots of decisions, and not very mindful during this chaotic work day.
We struggle to be mindful and to focus on our meaningful work.
What’s going on?
And yet, many of us want to create a life of meaning, focus, and mindfulness.
We know this, and yet we struggle. Why? What keeps us from this life of mindful focus and meaningful work? In this guide, I’ll talk about why we get pulled away, and then how to bring mindfulness to the process to find focus and create an impact with your work.
Why We Can’t Focus If you think about how you spent your last few days, most of us would say we’re more distracted than we
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A number of things: 1. We’re actually afraid to focus. The work we want to focus on is hard, full of uncertainty, uncomfortable. We want to do it, but we’re putting off the moment we have to enter into this uncertain space. We’re going to the “comfort food” of our distractions instead of the discomfort of the focus. 2. We’re afraid to simplify. To focus, we have to clear away all our distractions, say no to social media, our phones, our messages, our email. We have to say no to the easier tasks that we’re really good at. This kind of simplicity is uncomfortable for many people, and again, we go to “comfort food” distractions and easy tasks instead. 3. We’re constantly pulled away. You might put yourself in a space of simplicity and focus … but then your attention gets pulled away. We have so many notifications, so many messages, so many shiny distractions … and our attention is like a little monkey jumping from tree to tree. In some ways, this is
because technology is designed to grab our attention. But we allow this to happen. 4. We’re unsure about what path to take. We know we should focus, but shouldn’t we also be doing this other important task? Or those three pretty important tasks? Or checking for an important message/email that might come in? We have fear of missing something important, fear of choosing the wrong thing, fear of taking the wrong path when there are many available. This uncertainty can freeze us, or cause us to constantly switch. OK, so it’s fear, uncertainty, discomfort, and pulled attention. How can we bring mindfulness to bear on these four horsepersons of distraction? Bring Mindfulness Into the Arena Armed with the knowledge of why we’re not able to focus, we’re going to further arm ourselves with mindfulness and walk confidently into the arena of meaningful work. The first thing to acknowledge is that it’s OK to be afraid, OK to want to comfort yourself with easy tasks and distractions, OK to feel uncertainty. We’re not horrible people for being this way … we’re human. So we can look at our habits and smile on them with unconditional friendliness.
Let’s practice mindfulness in our workday with a series of questions. QUESTION 1: What’s the best way to structure my day? In this inquiry, we’re wondering if it’s best to constantly switch from messaging app to messaging app, from email to social media, from news sites to blogs, from small admin tasks to other quick tasks … filling up our day and not focusing on our most meaningful work. In my own inquiry, it brings mindfulness to how I spend my time, how fragmented I allow my attention to be … and then it brings me to an intention to simplify and focus. I still need to check email and messages and do the smaller tasks … but I can lump them together at certain times of the day, and clear space for big chunks of focus and meaningful work. This intention isn’t always met, but the inquiry brings me closer to it. QUESTION 2: What do I want to focus on? This isn’t a question many people ask themselves each day. Ideally, you’d ask it at the beginning of each day, but also at various points throughout the day. It shifts you: you go from, “What should I check right now” or “What can I quickly do right now?” to “What is the meaningful work I want to do now and give my full focus to?”
ing no to those million things … so you can say yes to your meaningful work. So you can say yes to complete focus and mindfulness. QUESTION 3: Why am I not focusing on it? If you picked something to focus on and you’re working on it, great! But if you’re not … why not? What’s getting in your way? What are you afraid of? What are you comforting yourself with? If you can identify the fear, instead of allowing yourself to habitually run from this fear … lean into it. Go towards it. Allow yourself to feel the fear, and stay in it, befriend it. Then go into your focus zone, in the middle of the fear, and let the fear be your guide and your friend. It means you are alive, that you are pushing yourself into discomfort for the sake of what you care deeply about, that you are creating meaningful work instead of running. Beautiful! QUESTION 5: What is my intention as I focus?
In other words, what do I care deeply about? What kind of dent do I want to make in the world, and how can I start to make that dent right now?
As you get started with a focused session, even if it’s only for 10-20 minutes … it helps to ritualize it. Have a clear beginning, and even a clear end. What will you do to mark the beginning? Maybe stretch, smile at your work, and set an intention. An intention isn’t a goal, but how you want to go about doing the task … for example, I might say, “I want to stay focused on this task, put myself into this uncertainty for the sake of the people I care about and serve, and stay present in the middle of it.”
It shifts from saying yes to your million things and messages, to say-
Keep this intention in your heart as you put yourself into this focus session.
QUESTION 6: What is this moment like, as I work in stillness? Now you’re in the middle of the focus session … bring mindfulness to that task. That’s simply a matter of awareness and curiosity. Bring awareness by asking: what is it like right now? What sensations can I notice? How does my heart feel as I take this gorgeous action, filled with uncertainty? Bring curiosity when you feel like switching tasks and running … by asking, “I want to run from uncertainty, but what would it be like to stay?” The truth is, we don’t know. We think we know that we won’t like it, but actually we don’t really know until it happens. So take the curiosity stance: seek to find out. Come to this task with an open mind, and you might find a gentle wonder that you didn’t expect, in the middle of your meaningful work. Now, you can do this for your meaningful work, but you can also do this for any task — responding to an email, answering a text message, reading an article online, contemplating a decision with care. Bringing purpose and mindfulness to your work can be a place filled with joy, if you allow yourself to move into that space with intention and curiosity, inquiry and love.
Leo Babauta
a successful ‘simplicity’ blogger and author from California, the creator of top 25 Blog,
ZEN HABITS
2018 February Issue | 7
YELLOW PAGES
Is it worth it to advertise? When I began my Brisbane painting business (it seems so long ago now), there was little choice in the way you could advertise. There was the letterbox drop, newspaper, vehicle and banner signage, sponsorship and of course, the ‘Yellow Pages’. That was it! There were no computers, internet or mobile phones back then, so it was quite a struggle for me to build a client base, especially when I only arrived from my home town of Perth a few years before. If you go back to when you started in business, you’ll remember it was quite exciting. Am I correct in saying for a few months you were running on a high thinking, ‘This is great! I’m my own boss and making lots of money?’. Now we all know our first clients would have derived from friends, relatives, people we know and referrals. We have also experienced that this did not not last long and work began to run low. We were then subject to using some sort of
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paid advertising to get our name out there to attract clients to call us. In 1986, the year my company became registered, there was only a single ‘Yellow Pages’ book. I can remember clearly that it was quite thick. Around fifteen years later, there were so many businesses advertising, they had to split the book into two sections; A-K and L-Z. The companies that were in the painting section alone consisted of over ten pages. That added up to more than 2,000 painters that were trying to get a clients’ attention to contact them. This really meant you had to have a descent sized advert to be noticed, as a ‘one liner’ was lost amongst the multitude of others. As it was the only main-stream avenues for advertising, ‘Yellow Pages’ charged, in my mind, what they liked. The reason being; ‘no other competition’, so it was quite expensive! There was a time when I was paying $2,400 for my small block advert (around eleven lines in total). But what choice did I have? If I wanted the work; I had to do it.
Then thanks to the invention of the home computer with ‘World Wide Web’ connection, it became very popular for the everyday householder and business owner to search and advertise. Because of this, the ‘Yellow Pages’ began losing many of its’ regular customers. Businesses chose to focus their advertising money ‘online’ instead, as they knew they could reach more people at a cheaper price. Also you were not limited in advertising space as everything about your business could be written in a website. With all this happening, it eventually led to the reduction in size of the ‘Yellow Pages’ to a single book again. As they were becoming aware and noticed the market was switching to this ‘online’ advertising, they developed their own marketing platform for businesses and named it, ‘Yellow Pages Online’. It was a very wise decision to do this otherwise they would have eventually followed in the footsteps of ‘Kodak’.
Today, the majority of the Australian population own a computer, laptop or smart-phone and use these devices to search for a business. So what is to become of the ‘Yellow Pages’? Recently I received the latest 2018 edition through the post. It is so small now that it easily fitted into my letterbox. From last year, the advertising in the painting section alone has now reduced to two and a half pages in total. In doing a quick search I found eighteen painting companies chose not to advertise with them again. The question now is, ‘Is it worth advertising in the ‘Yellow Pages’ as more and more are using ‘the net?’
I still believe it is (for a few more years anyway). I will give my reason why. The day I received ‘the book’ in the post, I asked myself the question; ‘Will I advertise with them for another year? Is it going to be worth it?’ Well; that afternoon the homephone rang with a lady enquiring
about wanting a quote for painting the exterior of her house. I went through all the standard questions with the last being where she found my name. Low and behold it was from the ‘Yellow Pages’. When I asked her why she still uses the Yellow Pages, she told me she didn’t own, or even wanted to own a computer. This has been the same case in a dozen calls I received last year and the year before. So there is still that small minority living in the medieval-age who cannot face the technological progress of computers. With the $750 it costs me to advertise, my records show I still quote ten to twelve jobs a year to the total value of around $100,000. Normally I have a 4550% success rate with this form of advertising so to me it was a ‘nobrainer’ to continue to advertise with them, (until of course it drastically diminishes to only a few calls a year as then it wouldn’t be viable). No matter how you advertise or how you acquire your work I want
to give you one very important bit of advice, and that is you must ask your client, ‘Where did you find out about my company?’ If you do not do this then you’re essentially throwing your advertising money down the drain. I have asked this question religiously to everyone that has contacted me regarding a quote. This tells me what advertising campaigns are working and what is not, which in turn helps me with the allocation of my advertising dollar. (Just to let you know in the 30 years of my record keeping, it shows that I have had 840 customers who contacted me through my advert in the ‘Yellow Pages’ with 1.3 million dollars of those projects being accepted. Not a bad return! Many thanks ‘YP’)
Jim Baker www.mytools4business.com
2018 February Issue | 9
Cartledge Family Mandy, the friendly voice you hear on the other end of the phone when you call our office has been going through some family history. She discovered that her Great Great Great Great Grandfather was a painter that worked on the Sydney Harbour Bridge. Below is an extract of information that she came across. It’s interesting in so many ways.
Married Twice: First wife was : (Emily?) Mary Agnes (nee Wilton). Born, Penguin, Tasmania. Birth date unknown.
The family of George Horace James Cartledge, (my grandfather), as listed below as much as I know. I have had lengthy discussions with my three older sisters and other relatives who cannot add anything more.
George Horace James Cartledge was a painter and after moving to the mainland did spend many years as a painter on the Sydney Harbour Bridge. This eventually led to his death due to the excessive use of the lead used in the paints of those years.
George Horace James Cartledge. Born in Tasmania, (possibly Burnie or Launceston), we are not sure where and when.
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We do not have details of the second wife. We do believe that the children from the second marriage were all born somewhere on mainland Australia.
2018 February Issue | 11
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INCENTIVES:
The Good and The Bad The people in your painting business (you and your team) are the ONLY ingredient to your success that cannot be copied by your competitors (or at least until human cloning becomes a done thing). Due to this, and simply because finding new staff is a time consuming & painful process, incentivising employees to motivate and retain is common place in painting businesses. “Incentives”, is an overarching term for countless techniques that businesses, small and large, use to motivate performance and retain staff. These techniques can be divided into two categories - financial and non-financial incentives. Like most aspects of business, these incentives have associated advantages and risks… so which type of incentive should you be using in your business?
Financial Incentives Bonuses, commissions and pay rises are all common forms of financial incentives used in painting businesses. Financial incentives are awesome because they give staff something to work for, provide instant gratification on accomplishments and can almost immediately spur positive changes in staff performance. Despite this, the benefits of financial incentives have been matched
with criticism. Personally we see huge benefits in using financial incentives, but like all business decisions, we must acknowledge the potential downfalls of doing so. Financial incentives can: Narrow staff focus leading to high performance only in areas that will bring reward and poor performance in areas that aren’t incentivised De-motivate staff when goals resulting in incentives are marginally missed or when fellow staff are reaching goals and getting incentives whilst others aren’t Forms a transactional relationship where staff don’t work hard through genuine commitment but instead
work for the reward. When a transactional relationship is formed staff will do the bare minimum, they are unlikely to put their hand up for afterhours and they have a high risk of finding work elsewhere since they are only interested in the financial incentives, and any of your competitors can offer that.
Non-financial Incentives The use of non-financial incentives in painting businesses have two extremes… Extreme 1: They are simply considered important by painting business owners and ignored
2018 February Issue | 13
Extreme 2: They are actions that trade business owners will do naturally and relentlessly, most of the time not even realising that they are giving their staff a non-financial incentive. Non-financial incentives include growth opportunities, recognition, autonomy, flexible work hours and job enlargement (giving a staff member increased responsibilities so that their job is more challenging). Since most of these non-financial incentives have the ability to enhance job satisfaction, they intrinsically (internally) motivate staff to perform and to remain committed to their job and the business they work for. However, as with financial incentives, nonfinancial incentives have some associated risks.
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Non-financial incentives can be: Less effective at increasing output, for example increasing the amount of bricks laid in a day because the reward is often seen over time rather than attained immediately like in financial incentives Often misused by business owners through neglecting to link the nonfinancial incentives to the goals of the business. All incentives, both financial or non-financial, must further the strategic interests of your business. For example, upskilling a tradie provides them with motivating growth opportunities but also enables you to re-delegate work strategically through your business . So, what’s best? Financial or nonfinancial incentives?
Answer: Both are best and neither is better than the other… Use a combination of financial and non-financial incentives in your painting business. This will ensure that you are addressing the various interests of all staff members and balancing out the pros and cons of various incentive methods. For MORE, on how to retain staff in your painting business check Episode 9 of The Tradie Show: ‘How to Find, Hire, and Retain the Best Possible Staff’. CLICK HERE to watch it for free. -------------------------------------------------
Angela Smith
Co-founder – Lifestyle Tradie
“Helping Trade Business Owners Fast-Track Financial & Lifestyle Success”
2018 February Issue | 15
Australia’s ‘deadliest natural hazard’: what’s your heatwave plan? Heatwaves are Australia’s deadliest natural hazard, but a recent survey has found that many vulnerable people do not have plans to cope with extreme heat. Working with the Bushfire and Natural Hazards Cooperative Research Centre and the Bureau of Meteorology, my colleagues and I surveyed 250 residents and 60 business managers in Western Sydney and the NSW North Coast. We found that 45% of those at risk – including the elderly, ill and very young – did not proactively respond to heatwave warnings as they did not think it necessary or did not know what to do. Few at-risk people reported moving to cooler locations, and more than 20% of people in Western Sydney were concerned about the impacts of energy prices on their ability to use air-conditioning. For most people, extreme heat left them feeling hot and uncomfortable or unable to sleep, though around 15% felt unwell. Few people reported checking on vulnerable family members,
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friends or family during heatwaves. Businesses also suffered disruption, and most companies with employees working on machinery or outdoors reported lower than normal productivity. Many people said that they didn’t need to take any further actions to adjust to future extreme temperatures. However, for some extreme heat is already impacting their living preferences, with around 10% of people indicating that they are considering moving to a cooler town or suburb. Read more: Are heatwaves ‘worsening’ and have ‘hot days’ doubled in Australia in the last 50 years?
A history of deadly heatwaves Australia has a long history of deadly heatwaves. The table below shows numbers of deaths and death rates per 100,000 population from episodes of extreme heat in Australia by decade, reaching back to 1844. The information comes from PerilAUS, a database that records the impact of natural hazards reaching back to the early days of
Australia’s European settlement. The death rate is the number of deaths per head of population in the country at that time, and was consistently, significantly higher between 1890 and 1939 than for any period before or since. An extraordinary heatwave occurred between October 1895 to January 1896 that impacted nearly the entire continent but especially the interior. PerilAUS records 435 deaths, 89% of them within New South Wales. Deaths also occurred in South Australia, Western Australia, Victoria and Queensland. Bourke, in NSW, lost 1.6% of its population to the heat: temperatures of 40° in the shade were already being recorded in October, mid-spring. During the disastrous 1939 Black Friday bushfires, 71 people died in Victoria. But at least 420 people died in the heatwaves which preceded the fires, largely in New South Wales. The heatwaves were accompanied by strong northerly winds and followed a very dry six months, increasing the severity of the subsequent fires.
Most will remember the catastrophic bushfires that destroyed several towns in Victoria in 2009 but not many will remember that these fires also followed two heatwave events across Victoria and South Australia, where at least 432 people died. In 2009, new records of three consecutive days over 43° in Melbourne and eight over 40° in Adelaide were set. A feature of these heatwaves was the very hot minimum temperatures, with Melbourne’s temperature falling to between 20-25° overnight and Adelaide to just 30°.
We must all plan ahead There is no reason why a deadly heatwave could not strike Australia again this summer, and there’s at least some evidence that the frequency of heatwaves in Australia is increasing. Sudden peaks in airconditioning use also creates the risk of overloading electricity grids and prompting blackouts, so it’s important to think about how you can stay cool without power.
warnings by listening to radio broadcasts or searching emergency websites.
selecting a cooler place, like a shopping centre or library, you can visit during peak temperatures.
Simple measures, like rescheduling outdoor activities to cooler parts of the day, closing curtains and blinds and staying indoors are always sensible. Research suggests that elderly people may be particularly reluctant to use air conditioners, but if your household contains vulnerable people it’s important to use every cooling option available.
Make a plan for pets and animals, particularly those who will be left outside during the day while the household is at work or school. Ensure they have shade and access to plenty of water.
It may be possible for some people to use an app or timer to turn on their air conditioners during the afternoon to cool their house, then turn it off after 6pm to avoid contributing to peak demand. Read more: High energy costs make vulnerable households reluctant to use air conditioning: study
If you have friends or family who are elderly, sick or very young, make sure to check in on them. Consider
On a larger scale, better urban planning and house design – and even planting shade trees near houses – are needed. Unfortunately, deadly heatwaves are part of Australia’s summer, and it’s likely they will worsen under climate change. Planning ahead can literally be a life saver. ---------------------------------------------Andrew Gissing
Adjunct Fellow, Macquarie University
Lucinda Coates
Risk Scientist, Risk Frontiers Natural Hazards Research Centre, Macquarie University
Some easy ways to stay safe include tuning to heatwave and emergency
2018 February Issue | 17
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Switching from Sole Trader to PTY LTD COMPANY Many tradies start their self-employed life as a sole trader, but as their business grows, switching to a company is not uncommon. It can make a lot of sense to go this way. When you go out on your own for the first time, you never know for sure if things are going to work out. Why spend thousands on setting up a Pty Ltd company, when you can get up and running as a sole trader with an ABN for virtually nothing?
• The business activities have not changed
This is what we find is the case with many tradies who become Trade Risk clients for the first time.
• There are no pending claims or circumstances that you need to notify us of
But what happens when you switch to a Pty Ltd? Is your sole trader insurance now useless?
Even if you don’t meet the above criteria we should still be able to switch your policy, but it will be a little more complex depending on the situation.
Thankfully not! In most cases when you switch from a sole trader to a company, you’ll be able to change your existing Trade Risk policy with minimal fuss. You will need to let us know of course, but the process is generally quite straightforward provided that the following criteria are met: • The same person who was the sole trader is now the sole director of the new company
The same applies if you are switching from a partnership to a company. Provided that the same partners are now the directors of the new company, the change to your business insurance should be very straightforward and not require a whole new policy.
Is it more expensive to insure a company compared with a sole trader?
This is a common question, but the answer is generally no when it comes to public liability insurance. Public liability is priced on a number of factors, such as the trade you are undertaking and the size of the business, either by revenue or staff numbers. So if your business activities are staying the same and the size of your business isn’t changing, there should be no change to the cost of the insurance. Keep in mind that there may be a small fee to make the change to the policy, but the actual insurance cost shouldn’t jump up. Whilst on the subject though, it probably is a good time to review the information that we have about your business.
2018 February Issue | 19
If your business is undertaking different activities, or has grown in terms of staff or revenue, this would be a great time to check that your insurance is up to scratch. Again this doesn’t mean that you need a whole new policy, but may mean that your existing policy needs to be updated to meet your current needs.
Anything else to do? If you’re paying your insurance monthly, you should switch your payment source to come out of the new bank account you’ve set up for your company. Whilst it has no affect on your insurance, your accountant will appreciate it at tax time!
You’ll also need to ensure your licenses are in your company name. This is especially true for Qld electrical contractors, where there are very strict rules stating that the name on the licence must match the name on the insurance.
吀栀攀 瀀漀爀琀愀戀氀攀Ⰰ 椀渀攀砀瀀攀渀猀椀瘀攀 洀攀琀栀漀搀 琀漀 瀀爀攀瘀攀渀琀 瀀愀椀渀琀 眀愀猀琀攀ⴀ眀愀琀攀爀 瀀漀氀氀甀琀椀渀最 琀栀攀 攀渀瘀椀爀漀渀洀攀渀琀⸀
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Next step Call us on 1800 808 800 and our friendly team will help you out. Visit our website
www.traderisk.com.au
Public liability insurance for painters, from just $407 - Includes cover for spraying - Unrestricted heights option* - Cover from $5m to $20m - Monthly payment options - Easy online application
Premium of $407 is based on $5,000,000 public liability insurance policy paid annually for a painting business in QLD with one manual worker. * A 15m height limit applies, but can be removed for an additional premium. Tradesman Insurance Services Pty Ltd t/as Trade Risk (CAR 422847) is a Corporate Authorised Representative of 2018ABN February Issue | Westcourt General Insurance Brokers Pty Ltd, Australian Financial Services Licence No 238447. 81 009 401 772.
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10 QUICK GROWTH TIPS
for your small business Small businesses can grow in boom times as well as periods of difficulty by working smarter and taking advantage of opportunities. Put these following effective tips into practise to help grow your business.
Utilise new technology Modern technology can save you time, improve productivity and reduce your operational costs. Make use of Facebook, Twitter, Google+ and other social media tools to market your business. Xero is the number one cloud accounting app that can allow you to bill and receive money on site. Receipt Bank allows you to snap and forget. Take a photo of that docket and submit via the app and it appears in xero with all the work done for you.
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Communicate better Always take a friendly but professional approach to any form of customer interaction including written invoices, quotes and emails. Create guidelines for dealing with customers in writing and over the phone. Reply to messages as soon as possible. If you take too long to return a call or email, you may lose a potential customer to a competitor. Try writing a blog or column about your chosen industry. Think about sponsoring an event or gifting your products or services to a local sports team, community group or school.
Become more innovative Even if your products and services are selling well, always look out for new ways to refine your business. Organ-
ise regular brainstorming sessions and invite staff to share their ideas on ways to improve products or services.
Tighten up your credit policies For any orders, make sure your customer completes a credit application and that they understand your terms of trade. Encourage your customers to clear payments quickly by emailing or posting invoices and giving clients a clear time frame to pay. Revisit your terms of trade and make any necessary changes if need be.
Improve your record keeping If you’re selling products, keep a record of every product sold and ensure you’re aware of how much stock you have.
There are free or low-cost point-ofsale (POS) computer programs that can manage stock inventories and provide a record of each product sold. Create a database for future follow-ups by recording clients’ names.
Join business associations and organisations Business associations and organisations give you access to industry leaders about current innovations and developments within your chosen market for an annual membership fee. They hold regular events, seminars, short courses and networking evenings which can be incredibly valuable for meeting business owners, identifying investors, and learning more about your industry.
Develop a website If you’re a well-established business, potential customers will be searching for you on the Internet – often before they pick up the phone or walk through your door. An effective website needs to be functional, communicating what you offer and your point of difference.
Manage your time more effectively Take note of where your time is going each day. Some tasks could be consolidated, or completed at a dedicated time each week. There are free or low-cost time management tools such as Toggl and Google Drive that monitor your daily workload and can generate weekly reports.
Buy good quality business cards and use them Take any opportunity to hand out your business card when you meet new people – even outside of work.
Generate referrals There are many ways to create referrals and grow your business. For example, you could pay for them per lead, write a blog, attend trade shows, or simply advertise through various media. Your small business will need to harness a variety of methods for it can grow sustainably, so take the time to plan ahead and try some new approaches. Good luck and let me know how you get on.
2018 February Issue | 23
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Payment Disputes with Domestic Clients Mrs Jones seemed nice enough. She made you cups of coffee. She inquired as to your family’s wellbeing. She shared a joke with you most days. That was then. Now you haven’t been paid in two months, she’s ignoring your calls, and her lawyer-brother-in-law is threatening to sue you for $450 000.00.
engaged to carry out a defined scope of work for a defined price or rate. You are not doing someone a favour, or helping a friend. By letting the relationship cross the line into friendship you inevitably invite poor practices into your work that will cause a payment dispute.
Relationship
This is perhaps the root cause of most of your problems. You have allowed the relationship to get too close. You must remember that Mrs Jones in your client. She is not your friend. You have been
Variations
Now because Mrs Jones is such a nice person you have most likely done additional work for little or no cost. Or maybe you have bought her some materials at trade prices to be nice [and so made no money on it!], or maybe you have done additional work but not bothered to get it signed off as a variation, because it seemed too formal for someone so nice.
Welcome to domestic building. In recent times we have had a number of these stories come through the door and they all have things in common that contributed to the payment dispute. These are the saddest stories because they all start out so well. The parties like each other, the relations are good, the work seems to go well, everybody is happy. Let’s take a closer look at how this all goes wrong.
the relationship to become personal. You must insist on payment no matter what. After all, your own divorce would not be an excuse for not completing the contract work, would it?
Keep the relationship friendly, but business-like at all times. Many contractors are told that they can’t get paid because the couple who hired him are now getting divorced. Many contractors have had the client cry in front of them, and feel sorry for them, and then back away from payment. This happens because the contractor has allowed
These are key errors. The biggest cause of payment disputes in domestic work is variations. It is very common for clients to get carried away with extra work orders only to come crashing to earth when you invoice them. At this point they will pick a fight with you and try to find some reason not to pay you; alleging defects is common.
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To keep this under control, do the following: • Always quote additional work and get it signed off by the client. I am amazed at how few contractors insist on getting Mrs Jones’ written approval before doing variations. It must be because she is just so nice. • Always try to get to a firm price. If this is not possible then agree on a rate or a ‘capped value’. • Avoid ‘do and charge’ methods for domestic variations. Your client will always underestimate what it costs, so get it on paper beforehand. • Each month, somewhere on your invoice or claim, note the value of the initial quote or budget, and then show the current value of completed work. That way you can say that your client was well aware that the works had exceeded the contract price. Many clients argue that they had no idea that the work was a variation, or that the contract sum had been exceeded. You need to knock this one on the head. Variations will either make you more money, or lose you everything. So keep them under control, and keep the relationship ‘business-like’.
Scope of work
Another typical cause of dispute is the agreed scope. Too many contractors use quotes that only vaguely describe the work they have agreed to undertake for the agreed price. This leads to your client insisting that a whole pile of work that was not in your scope, MUST be in your scope. Because your quote was vague you feel you need to accommodate the client and do the extra work; and lose yourself money.
Avoid the issue by:
Scoping your work in detail. Refer to plans, measures, site locations, materials etc. It must be easy to see exactly what it is you are offering to do for the price.
Anthony Igra
For more great articles and video information about dealing with payment problems go to
www.contractorsdebtrecovery.com.au or call us on 1300 669 075
26 | Aussie Painters Network
2018 February Issue | 27
Glossary of Paint & Painting Terms
Vv
Ww
VARNISH A transparent coating material based essentially on resins and/or drying oil and solvent.
WASHABILITY The ease with which soiling can be removed from a coated surface by washing.
VEGETABLE OILS Oils obtained from the seeds or nuts of vegetable growth. This includes such oils as linseed, soybean, perilla, hempseed, tung and castor oils, etc.
WATERBLASTING Cleaning of a surface with a jet of water, with or without the assistance of compressed air, which may contain certain additives, such as corrosion inhibitors and an abrasive.
VEHICLE The liquid portion of a coating material in which the pigment is dispersed. VISCOSITY The resistance of a fluid to flow. VOLATILE MATTER The substances that are released from coating materials by evaporation under specified conditions. VOLATILE ORGANIC COMPOUNDS Solvent emissions from the wet film while drying that evaporate into the atmosphere. VOLUME SOLIDS Expressed as a percentage and means the volume of solid material contained in the paint that forms the dried film of the paint after application. The remainder of the paint evaporates.
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WATERBORNE PAINT A paint in which the pigment and binder are dispersed or dissolved in a continuous phase that consists essentially of water. WATER-DISPERSIBLE PAINT A paint consisting of a stable dispersion in water with little or tendency to separate during storage. WATER-SPOTTING The spotty appearance of the film of a coating material, caused by drops of water on the surface that remains after the water has evaporated. Water spots usually appear lighter than the surrounding paint. WAX BLEED An excessive amount of wax on a substrate that causes the surface coating to discolor and breakdown. WEATHERING The exposure of a coating or coating system to an atmospheric environment.
WEBBING The development of wrinkles, often in a well-defined pattern, in the film of a coating material during drying due to the irreversible swelling of a partially dried surface skin. WELDING PRIMER A coating material that is applied to an unpainted metal surface for protective purposes that does not have to be removed prior to acetylene welding and does not prevent the making of a satisfactory weld. WET EDGE TIME The period of time during which the physical condition at the boundary of the film of wet edge a coating material allows the same product to be applied to an adjacent area and to be live edge blended imperceptibly with the existing film. WET FILM THICKNESS Thickness of a liquid film immediately after application, before it begins to dry WET FILM THICKNESS GAUGE Wet Film Thickness Gauges are designed to quickly and easily measure the thickness of coatings immediately after they have been applied to a substrate. WET-ON-WET A technique whereby a further coat is applied before the previous one has dried and the composite film then dries as a whole. WETTING The ability a vehicle possesses to spread uniformly and rapidly over the surface of pigment particles. WHIP BLASTING Light abrasive blast cleaning. WHIRLING The centrifugal removal of excess paint from articles that have been coated by dipping. WHITING An inert, white amorphous pigment composed principally of calcium carbonate. Used extensively for making putty, and as an extender in paints.
WHITE RUST Term loosely used to describe corrosion products of certain non-ferrous metals. WINDOWING In coating materials for dipping. The formation of a film of the coating material across holes pierced in the component being painted. WIRE ENAMEL A coating material, usually unpigmented, applied to copper wire to confer insulating properties when the wire is subsequently used in electrical equipment. WOOD FILLER: Paste or liquid form used to fill holes or blemishes in wood to create a smooth surface for painting or staining WRINKLING The development of ridges and furrows in a paint film once the paint dries. WOOD ALCOHOL Same as methyl alcohol or methanol. This is the term often used by the laymen. WRINKLE FINISH A varnish or enamel film, which exhibits a novelty effect very similar to fine wrinkles or irregular ridges.
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Any Terms that are identified within the painting & decorating industry as “defects” images; possible cause; solution and prevention methods are provided.
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More of “X” next month...
Glossary of Paint & Painting Terms
2018 February Issue | 29
Understanding
FINANCIALS
As a whole, contractors do not understand or are not very interested in accounting. Sadly, understanding financials information is not all that complicated if your data is recorded in a useful format. Many of the statements we receive from contractors are in jumbled accounting formats. To make matters worse a family member or office person does the books but they receive little input from the owner. All too frequently they are just chunking numbers into a chart of accounts.
Estimating is much harder than accounting. Estimating is predicting cost and requires multiplication and production rates. Accounting is merely addition and subtraction and is the actual tally of expenses after they have occurred. To have a profit and loss statement that makes sense, you should use a format that matches your estimating logic. For example, do your record superintendent cost with field labor or as part of overhead. The correct answer depends on where you included that cost when you bid the job. If it was included in field labor, you should record the cost in field labor. If you included it in your fixed overhead markup, it should be included in fixed overhead. There are two kinds of cost and six categories within those two types.
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These two types are overhead and direct costs.
Overhead or Indirect Costs: These are the costs that are difficult to charge to a given job such as office rent, admin costs, gasoline, vehicle maintenance, depreciation, telephone, etc.
There are two kinds of overhead costs: Fixed Overhead: Is the cost that is fixed regardless of the amount of work you do. For example, your rent stays the same regardless of the number of jobs you are performing. You can change your rent by moving to a larger or smaller building but that is not quickly or easily done. Variable Overhead: Is cost that cannot easily be tied to jobs but fluctuates directly to the amount of volume you are doing. For example, the more work you do the more gasoline and tools you need.
Direct Costs:
Are job costs or items that can be charged directly to a given job. Below four broad categories are listed but you can have multiple accounts in each category.
Field Labor:
This is for labor that is performed in the field to install jobs It should also include payroll taxes and workers comp. While labor as a direct post can be hard to assign to a given job, both are a percentage of labor and are applied as labor burden when a contractor bids work. Field labor should not include admin salaries as they are part of fixed overhead. If your field workers are paid in the winter or on a rainy day, that should be charged to fixed overhead as downtime and budgeted each year.
Subcontractors:
Subcontractors merely take the place of field labor.
Material:
Is the material that is left on the job with the customer? It is part of the actual job?
Special Job Costs:
These are onetime expenses such as equipment rental or travel pay which should be charged to that job. If you did not have the job, you would not need the expense.
Monroe Porter
is president of PROOF Management a firm that teaches seminars and runs networking groups for painting contractors.
www.proofman.com
2018 February Issue | 31
䴀礀 倀愀椀渀琀
䌀漀猀琀椀渀最 䴀礀 䠀漀甀爀氀礀 刀愀琀攀 䜀甀椀搀攀 䌀愀氀挀甀氀愀琀漀爀
眀眀眀⸀洀礀琀漀漀氀猀㐀戀甀猀椀渀攀猀猀⸀挀漀洀
32 | Aussie Painters Network
眀眀眀⸀氀攀愀搀⸀漀爀最⸀愀甀
2018 February Issue | 33
The Industry
Idiots
34 | Aussie Painters Network
Important Contacts Aussie Painters Network www.aussiepaintersnetwork.com.au
Ph. 0430 399 800
National Institute for Painting and Decorating www.painters.edu.au
Ph. 1300 319 790
Australian Tax Office www.ato.gov.au
Ph. 13 72 26 / Ph. 13 28 65
Award Rates www.fairwork.gov.au
Ph. 13 13 94
Fair Work Building & Construction www.fwbc.gov.au
Ph. 1800 003 338
Mates In Construction www.matesinconstruction.com.au
Ph. 1300 642 111
Workplace Health and Safety Contacts Comcare WorkSafe ACT Workplace Health and Safety QLD Victorian WorkCover Authority WorkCover NSW SafeWork SA WorkSafe WA NT WorkSafe WorkSafe Tasmania
www.comcare.gov.au www.worksafe.act.gov.au www.worksafe.qld.gov.au www.vwa.vic.gov.au www.workcover.nsw.gov.au www.safework.sa.gov.au www.commerce.wa.gov.au/WorkSafe/ www.worksafe.nt.gov.au www.worksafe.tas.gov.au
1300 366 979 02 6207 3000 1300 362 128 1800 136 089 13 10 50 1300 365 255 1300 307 877 1800 019 115 1300 366 322
www.actcancer.org www.cancercouncil.com.au www.cancercouncilnt.com.au www.cancerqld.org.au www.cancersa.org.au www.cancervic.org.au www.cancerwa.asn.au
(02) 6257 9999 (02) 9334 1900 (08) 8927 4888 (07) 3634 5100 (08) 8291 4111 (03) 9635 5000 (08) 9212 4333
Cancer Council Australia ACT NSW NT QLD SA VIC WA
2018 February Issue | 35