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In this episode, we are going to tackle Pricing! Knowing what you’re Worth. My approach to this subject is both technical & practical. First, an interview with Terry Peterson, who has 40 years in the business of powder coating & now consults coaters like us. He’s seen it all.
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The 2nd part will be Ross, owner of Maui Powder Works who has a very no stress method to his estimating. Stick around to hear each way to determine the best way for you We’re dropping lots of nuggets of wisdom along the way.
Part 1: Interview with Terry Peterson Consulting
RossKote(Kim): Welcome Back to the RossKote Powder Coater Podcast where we are building Community around powder coating. We interview influencers in the industry and cover trending topics to the industry. So powder coaters can effectively learn and grow their businesses. I am your host Kim Scott. This is episode 5 and today we are Tackling pricing getting what you’re worth. My approach to this subject is both Technical and practical First and interview with Terry Peterson who has 40 years in the business of powder coating and now consults coders just like us he has seen it all in the second part. We’ll talk to Ross owner of Maui powder works who has a very no stress method to estimating stick around to hear. What each of them has to offer and hopes of helping you determine the best way for you and your business now, let’s introduce our first guest Terry Peterson. Hi Terry. Thanks for being on the show today.
Terry Peterson: Hi Kim. It’s great to be here.
RossKote(Kim): This topic of pricing just doesn’t seem to go away. It seems like the most quality custom coders that I talked without. There are humble honest hard-working people. So if you’re good, shouldn’t you get paid what you’re worth?
Terry Peterson: Well, yeah, I mean in essence you you’re right Kim and there are different levels of coders that are out there. Some are very meticulous about what they do and some are just out there coating you’ve got hobbyists and you have people that are you know, really striving to create a lifelong business and provide for their family and make a name for themselves. And I think most powder coaters are pretty artsy in their backgrounds. I know I was when I started my business So the number of years ago and I always wanted to do the best for the customers. But yeah the pricing yeah it is. It is a question that keeps popping up you see it time and time again on the internet and I do have people ask me about it from time to time and that
RossKote(Kim): So why do you think coaters struggle with it? Is it just a confidence game?
Terry Peterson: Well, some of it I think is I think I think some coders I know certainly when I started out and I’ll solid reference a lot of what I did in the beginning. You know what we start out with those the biggest shop the best equipment and you’re trying to Garner, you know as much as you can for your product and once you kind of get past that that fallacy and you’re working more of what we were just talking about a few minutes ago about quality and building a Until then you start working down to the the the Grassroots of how you’re going to how you’re going to charge for your you know for your services and you know what? I think the basic menu for anybody is that you’ve got to figure out how much everything is costing you and that includes your energy cost. How much did you pay for your oven? How much did you pay for your other equipment? How much is your time worth? How much is the powder that’s going on to the items that you’re doing and how much time are you spending prepping it? And those are pretty much the basics, you know questions that you need to ask and just put it down on paper and sometimes you’ll surprise yourself. There’s two how much it’s actually costing you, you know, and you’re
RossKote(Kim): right
Terry Peterson: realizing well, I’m not charging up plus there’s always the good old method of how much are my competitors charging and then you kind of work your system.
RossKote(Kim): right
Terry Peterson: Backwards and say okay if they’re charging this can I get away with that or how can I make my process more efficient to make what I need to make on it so I can have a profit.
RossKote(Kim): I do want to go there and I think before we get going much further. I want to kind of go back up a little bit and kind of give us your background. How did you get started? And you know, how did you learn all this stuff?
Terry Peterson: Yeah, you know, how did I learn it all? That’s a funny question. I have people ask me this all the time. And I usually give my Consulting customers a brief history of where I’ve come from. So they feel comfortable with who they have coming into their shops. But anyway about 30 years ago. I was in the paint contracting business at a fairly large business going and I heard about this new powder coating process and this new way to coat metal items. Like most people are when they first start out doing something new. I just went out and found somebody had to used oven and had a hard time finding somebody with a powder gun, but I was lucky enough to come across somebody and I bought the equipment and the funny thing was that oven was put in and it was installed a couple days later. The gentleman that I purchased my gun from came in dropped it off with a small bag of clear and said, okay. Here you go. Goodbye, and I won’t wait a minute. Wait a minute. What am I doing with this thing? And so he kind of gave me a brief. Well, here’s what you do. You put the powder here, you shoot it. It sticks to things you throw it in the oven you’re done and I thought hey, this is great. So I started yeah, you’re right Kim.
Terry Peterson: How easy is this and a lot of those comments over the years from customers geez that looks so easy to do and as I started doing it, luckily, I just started doing things for myself to kind of play with it and I realized it. There’s a big learning curve to this thing and over the years again. Yes me how did I learn? I learned by the good old hard knocks. I graduated from the University of Hard Knocks with a PhD a few years ago. Believe me and that’s… that’s how I learned it just by making mistakes. There were many times that I was in the shop, two three days straight never went home. Just simply because I had to have products in – for customers and there weren’t turning out right until I learned and taught myself what I needed to do to make that product right because there product right because there was was nobody to go to and for a period of time I was doing work for people literally all over the country. literally all over the country. in Arizona had him from New York in Arizona had him from New York south east west north. I mean everywhere because nobody was
RossKote(Kim): right
Terry Peterson: doing it. So I had to learn I had to learn and it just and that’s kind of how I got my education and in Powder Coating and I’ve just tried to work the craft when I did have my shop over the years and get as good as you know with it as I possibly could so yeah, that’s kind of where where I started out where I came from this
RossKote(Kim): Well, that seems like I mean, it’s kind of interesting because you know, we had Thresh 99 out last week on that previous podcast. If you haven’t heard that one I recommend going back to that one.
Terry Peterson: Yes.
RossKote(Kim): It was an excellent interview because he kind of and I guess that’s kind of where we’re going with this podcast is we’re kind of filling in the blanks, you know filling in the back story to to how where we are today and I like this story that you just gave us your story because it really kind of adds to that another piece to that puzzle of you being sort of a second-generation powder coater and how you were able just because you were the only guy you were able to Garner all this business from around the country because there wasn’t anybody else they could they could come to and I think that that helps add a little little bit more to how we where we came from and where we’re going and I want to before we get much more into talking directly about prices pricing and and you know sort of the how competition plays a role I want to preface one of the top books for business out. There is a book called traction. I Know if anybody out there is an Avid Reader. I came across this book through a friend and you know, it’s called Traction. It’s by G. No Wickman and on page 47 may start to go into how people make mistakes and I started to laugh when I got to this page. Because the example that he is giving about the classic mistake that people make is about a couple of guys who got into powder coating and I’m I was laughing so hard because it’s like here’s the number one, you know, you would think it would be mistakes on you know, I don’t know a restaurant business or you know a retail business because there’s so many of them, right? but ironically the samp the example
Terry Peterson: right
RossKote(Kim): they give us an example it is about powder coating and you know, if you’re in the business, it’s kind of like I giggled when I read it because it’s like yeah, you have to know these people really didn’t know what they were doing. So, basically let me just set this quote up from the book traction by G. No Wickman and they’re talking about basically pitfalls. that could lead into making not thinking things through or like the grass is greener on this the other side or you know, the they’re calling it the surest way ways to lose your diamond mind and this couple guys that had a business they were getting bored with it, I guess and they I wanted to do a transaction of with this warehouse and they owned a realist. They were real estate guys. They were Real Estate Investors. Right? And so they came across this Warehouse that they wanted to partner with this other guy who came to them and he goes man. I got all these customers who want powder coating and everything. NG and the quote goes this particular bullet came in the form of a business proposal from a man who wanted this real estate company to buy an industrial building he owns so he could start an engine powder coating company. Well right there like engine powder coating coming like a what but anyways continuing on the deal was that he would lease the building from this real estate. Investor guys would use the proceeds of the sale to build the line and the facilities the man had customers already lined up sounds legit, right, you know, and he just needed to build the company and open its doors on Paper. It was a million-dollar idea excited by the prospect the co-owners decided to go one further and partner with this guy in the powder coating. It’s after investing a million dollars of their own money and a year and a half of their time. They eventually closed the business in the three months. It had been open. It had lost a total of three hundred thousand clearly. It was the worst business decision of
Terry Peterson: Yeah.
RossKote(Kim): their careers.
Terry Peterson: right
RossKote(Kim): There was however a serious silver lining six months later when someone stepped in and bought the company for almost as much as they had put in they’re Lucky on the other hand. They still lost a year and a half of
Terry Peterson: right
RossKote(Kim): time and focus on their Core Business, which was real estate. So I think it’s just a funny example
Terry Peterson: right
RossKote(Kim): of how things can go bad in a powder
Terry Peterson: right
RossKote(Kim): coating company and pricing is just obviously one of it and you and I talked earlier about the whole startup. You know how Americans just go into things. They don’t really think things through and we just kind of dive in that’s just our nature as you know, in our nation, you know, we just do it and you know, like your example of
Terry Peterson: exactly
RossKote(Kim): just learning the hard way, but I mean what do you advise and I’m going to preface this by saying like, you know, this is just your method, right? This is not you know.
Terry Peterson: Correct. Yeah.
RossKote(Kim): Tell people exactly what you’re going to know, you know, you have Consulting and so we don’t want to talk too deeply about it. But you know, what are some of the things that people should be considering about pricing you touched on a little earlier, but maybe we can go a little deeper now. What are those? What are those things that we have to think about fixed and variable costs stuff like that.
Terry Peterson: Exactly, just like you said, I mean you really have to sit down and honestly look at what you’re costing is going to be and that includes as we were talking about before your energy costs your consumable costs your cost of your equipment your overhead your energy if you have any labor if you’re taking any money out of the business or planning on and that’s something that you really is kind of a No-No in the beginning. because your your truck while it all
RossKote(Kim): pray
Terry Peterson: back in just to just to keep the operation going, you know it there’s a it’s all pretty tried and true. But then with the powder coating business you also have to be aware of and I think this is probably what happened to those gentlemen that we’re trying to do the engine coding business. You have to be involved with the brass tacks of your business yet be inquisitive. You have to learn you have to and what it takes to produce that product and not just okay. I’ve got customers, they’re going to send me work and we’re just going to buy the equipment to do it. There’s so much more to it as we were saying earlier with learning the ins and outs, you know it just again, it’s pretty basic but it’s something that a lot of a lot of folks don’t look at when they are starting a business. What’s this darn thing going to cost? And I mean you need to look as we were saying before it and everything because there’s something that’ll just wheel you away. Let’s take for instance reduce and
RossKote(Kim): Yeah, yeah.
Terry Peterson: rejections. Do you figure out how much time it’s taking you to do that you go. Okay. I’m making $100 on this project. I’ve got all my cost covered. But what happens if this project fails and we know this happens particularly with totter coating because you’re dealing with Heat Source you’re dealing with with Metals. You’re dealing with contaminants and cleaning. So this is a factor that a lot of a lot of folks don’t build into their costing which I think is really really important. You know, I’ve seen businesses that I’ve worked with that they’ll just they’ll go. Well, I’m not sure rejection. How many parts you rejector for? What’s the problem with your rejections? I go. I don’t know. a day 20 days or We’re you know x amount it may be ten G data go don’t you ever look at what that’s costing, you know, we don’t we’re not really concerned about that. But yet on the other hand when you sit down and you evaluate their business with them, they’re going out but we’re not make as much money as we should be making how can we do that? Let’s go. Let’s go back and take a look at you know, how we can avoid these rejection. So again, you know, that’s a technical aspect of the business, but it’s still a major cost factor that you have.
RossKote(Kim): Yeah, and before we met you Terry, I had consulted a local guy here in Maui to kind of help Ross. This was in the early days of where
Terry Peterson: Uh-huh.
RossKote(Kim): we were starting to get projects come a bigger projects coming in and stuff and I kind of was getting after him
Terry Peterson: right
RossKote(Kim): And I kind of was getting after him about underbidding jobs and stuff because I don’t think he was During reduce. I mean the whole point is it is a confidence game in two ways. I mean it’s charging enough, but then Right? also knowing hey, I don’t want to redo this. How am I going to do it, right, you know the first time and you know, one
Terry Peterson: Right, right. right
RossKote(Kim): of the things that he gave us tip, I
Terry Peterson: yeah
RossKote(Kim): guess that he gave us is that you know, if if you can if Ross considered the job to be easy, Then you know obviously he wouldn’t have his spidey sense wouldn’t be jumping out of them and he could just charge, you know, like if he’s looking at a project he’s never done before, you know, any wasn’t thinking it was going to be hard to just give him that project. But if he had any doubt or intuition came to him about this project to add 10 to 15 percent On top of the first number that came to him, right? So, you know if you it is and I think
Terry Peterson: That’s nice.
RossKote(Kim): Ross finally, you know, well, he has his own method to this day. But for those of the people, you know, for those of you out there, you know, you’ve got that first price that just jumps in your head when you’re looking at a project and then Always I don’t want to doubt yourself. But like, you know, if you’re not sure add 10 to 15% and it’s easy to do that in your heads. You know, like if it’s 500 add 50 bucks make it five fifty you know,
Terry Peterson: right
RossKote(Kim): and that’s just a simple simple little nugget I guess out there to do. Of course, I think some of the other You know technical stuff is to get it on paper. Like what you’re saying is really you got to get it on paper which means you have to have some way to track whether you’re using QuickBooks or some other method of accounting. And for those of you that do, you know start looking at your profit and loss statement, your balance sheet, your cash flow. How do you help your customers? You know that level where you can actually dive into the numbers. I mean what sort of things line items do you look at on those reports?
Terry Peterson: Well, I mean again, I’m not an accountant and and I you know, just to kind of preface this I don’t I don’t even pretend to be an accountant by any means numbers are not my bailiwick. But you know if customers come to me and they ask me about some of these things. I mean, we’ll delve into their getting back to we talked about their basic costs and looking at him have you put down on paper? You know, what your actual what you think you’re actually Costs are it’s so important, you know to get back to the Grassroots and it’s great to have an account. It’s great to have accounting programs. But in starting you really need to have that in black and white in front of you and keep Callie that on a daily basis. So those are the things that you know, the questions. You know, how do you know where your You know, how do you know where your What is your powder costing you? What is your powder costing you? Do? product? How long is it taking you those type of things and if they
RossKote(Kim): Yeah.
Terry Peterson: those then I’ll go maybe really need to start looking at some of those areas a lot closer and so many people start in the business and I’m going to take this into two forms one just not even considering those things. We were just talking about and others they’ll jump into a goal to seek an accountant or accounting programs and they’ll have spreadsheets and I have all this, you know information that they can Garner. But they don’t know how to put it there to make sense of it. So there’s again you have to understand your business. You have to understand where your costs are coming from and that’s pretty again. I’m repeating myself. That’s pretty basic nuts and bolts you’ve downloaded your costs are and believe me. Everybody does when they sit down and look at it. They know that it costs because they pay the bills every month.
RossKote(Kim): Yeah, and I you know when I first
Terry Peterson: So
RossKote(Kim): started looking at those, you know scary things that started popping out of my Quickbooks those reports, you know, I couldn’t make sense of them and I actually even done a business class on him and you know, one of the things that my bookkeeper pointed out to me was like look at your cost of goods. It’s and you know, because that’s just generally everything right and if your cost of goods exceeds, I think it’s like, you know, you don’t want that number to be that percent to be over 50% In fact the lower that number the lower that number the
Terry Peterson: Oh, yeah.
RossKote(Kim): better because that leads you know, two more. Profitability in a sense. That’s how you would read a you know, you can compare that to your profit now, there’s a formula for that but QuickBooks I know has a percentage thing. You can click in there and it’ll give you that percent right off. It calculates it for you. So ideally you want your costs you want that percentage below 25% and that includes your employee cost expenses, which is extremely Hard to do and you understand why these industrial coders are just so into the numbers and so technical all the time because that’s how they know. They’re you know businesses doing Wells looking at the numbers and stuff and that kind of leads back into what you were saying is to look at these look at your costs because that’s where you start where you can start finding that trail to profitability. bility and making you know
Terry Peterson: Exactly. Exactly. Yeah exactly Kim, you know and if there’s any if there’s any hard advice I could give somebody starting out and I know that’s pretty much you know, the audience were trying to approach today and that is as hard as you work on your powder coating and as hard as you work on your techniques work on your accounting work on making sure that you’re you’re watching your expenses that goes hand-in-hand on a daily basis. And you will learn it as you mentioned earlier, you know Ross has got a pretty good way of estimating things and everybody gets to that point. If they pay attention to the numbers you will get to that point and it’ll just become second hand and taking a look at an object and taking a look at a problem and going yeah. This is what it’s going to cost even if you have to counsel and that’s something else you learned over the years is how to counsel your customers to kind of Get them aware of potential issues that could arise with a product. They’ve given you so you learn these things over the years, but unless you really pay attention to it. And again both the powder coating aspect of and your technical aspect. You’ve got to pay attention to the cost and that time factor that you’re putting into it because that’s where your money is going.
RossKote(Kim): Yeah, and most of these powder coaters today are bootstrapping their scaling which means they’re not really buying equipment until they need it. I know that’s how we did it as we didn’t buy the whole enchilada powder X thing like a lot of them do and then get into it from there. I don’t think that would have worked
Terry Peterson: right
RossKote(Kim): for us to be honest with you because we really didn’t even know. The time how much customers were out there for us to even get because you know, we were so excluded here. But you know, it’s you know there’s more like I said, there’s more dissemination or just more information out there for customers to get interested in this finish for their everyday products.
Terry Peterson: right
Terry Peterson:yes
RossKote(Kim): comfortable Zone here. Now with what we’re talking about because when you are faced with competition, direct competition or indirect, you know, knowing that other side can actually help you in your business and how it relates to a brand. Because when you know the industry from that perspective you understand now where you fit in the market and that’s what’s so powerful with understanding, you know, a lot of guys just don’t care or and that’s fine. You don’t have to care because you got your own thing going on and you know, you’re doing just rims or you’re just doing brake calipers or Or whatever you don’t care about
Terry Peterson: Hello.
RossKote(Kim): these other jobs, but for those that want to scale larger and faster doing these industrial jobs actually can get you there. But knowing what the competition is, you know charging helps you get that fit because maybe you’ll find something. So let’s talk about how do you find how does competition play a role a competition pricing play a role? in your pricing
Terry Peterson: Well, I mean, it does play a role because I mean if you’re doing a certain item of widget and your competition is bidding on that same widget you you do need to have some semblance of an idea of where where they’re going with their cost and you can’t be two hundred dollars apart when they’re $10 part, you know, just because you say well I’m worth this. Well, you might be worth it. But is it worth doing the job for you? So Our competition is something that it is good. And it’s bad. I always viewed it as an advantage to me because people are always looking for coaters, especially nowadays. I’m finding this more and more with customers I deal with and it’s always good to know and keep in touch with those customers, even though they’re not your customers keep in touch with them because things do arise from time to time. It gives you insight as to what cost Things Are. Our gives you insight as to what your competition is doing for them. And is there an inroad for you to jump in and grab some business from these folks? So, you know, it’s a cost thing. It’s understanding where your at and where your competition is that type of thing. But yes, definitely you need to have an idea of where your competition is at charging whether again it be rims and I’ve seen all kinds of crazy prices all over the place on those two to win. You know to Industrial think so.
RossKote(Kim): So would you would you recommend like
Terry Peterson: Yes.
RossKote(Kim): calling your competition to to ask are pretending you’re I mean, I don’t
Terry Peterson: Well, it’s
RossKote(Kim): know. How would you do that like or would you call the customer and say hey and
Terry Peterson: yeah, no, somebody catch me.
RossKote(Kim): I yeah, I mean that’s gets a little
Terry Peterson: Yeah, a lot of times you you can call
RossKote(Kim): tricky, right?
Terry Peterson: call. Yeah, I mean calling is they’re not they’re not about to give you the time of day, but I would just suggest setting up an appointment. Just take some time during the week. And I know everybody’s busy but if you want to expand your business and and make it grow, you have to develop a customer base. You can’t just do a certain item because that certain item is going to dry up. So you have to develop a pipeline of a customer base per se just even if you take a day every two weeks and set up appointments with people say I’d like to come in and talk to you about my services. You start learning a lot and you start developing relationships with these customers and it may take a couple of times. But you start learning where your competition is at through those discussions with the sit down face-to-face as I’ve always been a face-to-face person with folks. I’d much rather deal with them that way because you know where they’re coming from they know where you’re coming from. So if you’ve got that wherewithal in your personality to do it, I highly suggest that’s how you Uncover the information that’s out there Suite is the best way to do it.
RossKote(Kim): So kind of more like a long game perspective.
Terry Peterson: Yeah, really? It is a long game.
RossKote(Kim): Yeah.
Terry Peterson: Yeah there unless somebody is you know, you hear through the pipeline that hey XYZ manufacturing really having a hard time with you know, their powder coater. You may want to go see him and that
RossKote(Kim): right
Terry Peterson: Those are terrific situations, but you need to develop that customer relationship part of your business also and you learn a lot and it does take it. Of time believe me in the first month year year-and-a-half. You’re not going to develop all of that overnight it takes time. But if you’re in the business long-term to establish a long-term business, that’s what you have to do it to develop your base line of customers.
RossKote(Kim): Yeah, I think that’s I mean just to even be ready. So if that does happen, you know, you have something you know that you can present or have some assemblance of getting ready to prefer something like that to happen in your life right now and just always trudging
Terry Peterson: exactly
RossKote(Kim): forward with your marketing plan or your you know, and how that plays into revenues, you know, but go ahead
Terry Peterson: Right, right, and I dunno I want to
RossKote(Kim): what were you going to say about that?
Terry Peterson: in the fact that I mean nowadays social media plays such a big part in helping businesses develop, but it still comes down to that personal relationship and you’re going to find that especially when you get into the industrial markets and Commercial markets in wanting to delve into that it may get you some awareness, but that personal contact is really ultimately what is going to develop A strong customer base and a good reliable customer base to work with over the years.
RossKote(Kim): Yeah, you know it’s true and that’s exactly what we’ve been sort of lately up against you know, is that industrial job the ones that bring you the big bucks are much harder to get we can you know, and that the problem isn’t that they’re not out there. I think they are out there the
Terry Peterson: Oh, yes, they are.
RossKote(Kim): problem. Yeah, the problem has been for us. Is getting in front of these people because they are so busy. They don’t unless you’re doing a lunch and learn kind of presentation kind of thing and their professional so they’ve got their own way, you know, if we’re taught in an I’m talking like contractors Architects, these are some of the targets that we have here that I’ve been trying to get in front. Of either that or you’re spending a bazillion dollars in front of at it some, you know Builder conference or something like that, you know, there’s that approach to that. We’ve tried to put you need a paying a lot of like membership fees and in you’re still an outsider, right? You know, so, you know, that’s how
Terry Peterson: right
RossKote(Kim): here, you know here been here for us, but you know, it might be a little different on the mainland. I don’t know just because it’s so much bigger. I can’t imagine but You know, it’s kind of well up until covid that’s been our kind of where we’ve been going is just trying to get in front of these people and doing these presentations and getting and still they still need education because they’ve got their own thing that they learned in college or their own method or way of doing things in their business and they haven’t really thought outside of that. So it’s not just getting in front of them. It’s now convincing them how wonderful Coatings are Powder Coatings are you know, but I
Terry Peterson: exactly
RossKote(Kim): think having that’s how the brand kind of is for me. That’s how the brand kind of has started is just trying to get in front of these people to talk to them about it. And I think once they hear about it, they’re like wait what, you know, other than that, it’s been like a mistake that’s happened and now they’re under a deadline and they’ve reached out to us and you know, we’re now able to help solve their problem and that’s usually been the two ways that we’ve gotten these larger because they’ve heard it from someone else that we did this job and whatever rotation
Terry Peterson: Mhm
RossKote(Kim): it’s tough. But I think I think we’re right. I mean like there’s I think we’ve presented a few different ways that you know, we’ve even called a competition, you know, and ask them how much they’re charging, you know, and then trying to assess they’re where they’re coming from, you know, or what why do customers go to them? It has been kind of like, you know, helping us figure out where our placement is in the market which has also helped us with our pricing.
Terry Peterson: Right, right. Yeah, it is a total awareness the
RossKote(Kim): Yeah.
Terry Peterson: total awareness and I we started off talking about pricing but it all comes back to this, you know, and without proper pricing you don’t make any money, but all these factors are involved in a total awareness of your business and of the community that you’re going after to Garner work. Yeah, it’s not, it’s not just buying an oven buying a gun and saying okay. I’m in business. Going to start coding things. There’s so much more to it and nowadays. It’s maybe a little more difficult because there are so many places popping up but being aware of developing good customer service understanding where your basic costs are at and then working your craft and working and working and working and I’m going to say this above all be as honest as you possibly can to your customers. Be honest, look at educate them. Let them know what you’re doing and let them know why you’re doing because that develops such a relationship that just goes miles. All you have to do is make one goof up or FIB to a customer and have it get out and enjoy all your hard work goes right down. The drain saw honesty is still the best policy.
RossKote(Kim): yeah, and I think a lot of I mean at least a lot of the quality custom coders that I talk to you out there generally our humble honest hard-working people, you know, but at
Terry Peterson: Mhm.
RossKote(Kim): the same time that same kind of personality trait makes them to a fault sometimes they enter charge and and stuff and so I hope that you know, this is a great way to kind of wrap up our talk because It kind of leads back to that, you know how to get paid what you’re worth and you know for some of us, I think what you said to own awareness having an awareness about it. Okay, it’s sometimes not easy to work math and numbers in your business. A lot of people shy away from it. Some people are just naturally good at it. But either way it’s just becoming aware of it and trying to hopefully use some The things that we’ve talked about today to implement in your business to utilize so that you can at least address, you know your pricing so it’s not necessarily adding one in one, you know equals to all the time. It’s just kind of having that hard conversation with yourself, you know, or your wife who’s complaining or your girlfriend or whatever. ever right
Terry Peterson: A good way to put it.
RossKote(Kim): Right because I’m usually the one going you didn’t charge an S. You didn’t charge enough, you know, whatever and stuff and so it’s a great way to kind of wrap up is just to have that awareness and have that conversation with yourself. Try to put some numbers together, reach out to Terry if you can’t find a little plug for you Terry, I don’t know if you need another plug but you’re so busy already, but you know, there are Consultants out there. They’re so if you do, you know reach out to a bookkeeper and throw them a couple hundred bucks to help you get an accountant, you know, some of these things do help but it is up to you to do it. So would you agree Terry?
Terry Peterson: Oh, I know I fully agree. I mean and and and again numbers don’t lie and it is difficult for a lot of folks. I mean it was difficult for me in the beginning both of my commercial painting business and also especially when I started the powder coating business, but you just have to force yourself to look at that evil. Notebook that is sitting there on your desk. It has all that information in it because it’s so important. It’s so important.
RossKote(Kim): Yeah, and I think that that’s four for me to just do one final thought. I’m not naturally that way either with numbers, but I forced myself to sit down and start to look at them. And you know what the thing is once I got into it. I really got into it because the numbers tell a story right? That’s what they do.
Terry Peterson: They sure do.
RossKote(Kim): And it’s, it’s all of it. It’s the competition and knowing where Places in the market and then it’s all these numbers and then trying to tease out that story behind it and how to go about doing that, you know and everyone, you know, it’s all basically the same but I hope to have a deeper conversation maybe later about that maybe get an expert in here on on that. You know, what kind of numbers do you look at and stuff like that, but I think for the most part from a basic point of view You know, you kind of know what they are. You know, it’s you’ve simply brought them to this conversation today about powders and you know your fixed costs and some of the stuff, you know versus pricing and you know, it’s all been captured here today and stuff.
Terry Peterson:
RossKote(Kim): So, you know, how do you want to throw out how people can get a hold of you if they have any questions?
Terry Peterson: Yeah, I mean if they do they can contact me through my email at mailto:tepowder@msn.com or my phone number is eight one five. Five, four five seven seven zero nine.
RossKote(Kim): That’s awesome.
Terry Peterson:Mhm
RossKote(Kim): Now Terry. You’re awesome. Thank you. I mean you certainly helped us think a lot of things through while we’ve been scaling as fast as we have and I certainly appreciate you on the show today because I think we’ve definitely given people some food for thought and you know, I hope to have you back again sometime soon type may be talking about some other stuff.
Part 2: Interview with Ross Scott
RossKote(Kim): Okay. All right. So now we’re going into the second half of the interview or part two of pricing and getting what you’re worth or what is your worth? I’ve for this part of this section. We’ve decided to invite Ross, owner of Maui Powder Works to the show Ross…How are you doing today?
Ross Scott: I am doing good. Welcome.
RossKote(Kim): How’s that dining room table? Is it working for you?
Ross Scott: It’s Square.
RossKote(Kim): Okay. Well, why don’t you just get right into it? I mean tell us your journey about how That you took to get to where you are today with pricing and the confidence that you have to charge what you do?
Ross Scott: Well, obviously I come from Multiple business backgrounds. We had our painting business before that and that was a great mechanism for Price Discovery because we were doing all these jobs with the hotels. I ran a sailboat company before that with employees and taking tourists out on rides and we had a lot of maintenance involved with that. Vessel and you know we learned a lot about the cost of doing maintenance and when I was actually very young. I had a paper route. So, you know, I’ve kind of been in the entrepreneur State my whole life, but as far as price Discovery goes and for Powder Coating it was a little more. Kind of like oh my goodness. What am I gonna charge? And how do I go about charging this and the best way I can say it doing this is Is basically look at the job. Figure how much time it’s going to take? And how much supplies you’re going to burn doing that job. Once you understand just that basic least common denominator part, then you can start figuring out your price structuring. It just didn’t happen overnight. I did call around and figure out what other people are charging and I was like going how come this is so expensive and how come this is so cheap. I couldn’t quite put it all together and you know, obviously over the time I went. Oh, that’s why that’s expensive and that’s just too cheap that guy doesn’t know what he’s doing, you know?
RossKote(Kim): right, and I think they’re you know,
Ross Scott: Okay, so
RossKote(Kim): there is some homework that the powder coders that are getting started in the industry have to do I mean, it’s just part of the process of if you want to get into this business. That’s just one of the things you do the more pieces of the puzzle. You can put them together. I think Terry and I went over this briefly the more the more you can get confident about the Perspective or the enter entrance to Market is for your specific business, you know, and I think we have a good example of that right here in Maui where we have a powder coder near us that specializes in hotel furniture, and he doesn’t necessarily. Want all the crazy stuff that comes into our shop every day. I mean, he doesn’t want that variation or that variable or that, you know, he’s just locked into what he does this works for him and he’s okay with that he wants to get into that at all. I mean it really helped us determine that
Ross Scott: but yeah, basically like you said they do Levi Furniture and that’s their business model. and they are really good at it. And you know, I do an occasional Lanai set here and there but I hate doing it because it takes a lot of time and here comes when I’m talking about. You have to figure out how long it takes for you to do your job. And you know if you start doing the numbers you go… Holy crap. I’m not making any money doing this, you know it that it’s that simple. So I stay away from things that are too laborious and take too much time to do and I try to stay on things that are Keep Me In the Zone of making money, so Like rims, I’ve got that down. I’ve got those things down and I I
RossKote(Kim): Yeah.
Ross Scott: can basically do a set of four rims and four hours. And you know we charge basically $500. so if you break that down, that’s $125 an hour, so
RossKote(Kim): right
Ross Scott: that’s that’s okay. That’s not my actual. Target rate I’d rather be at about 150 an hour.
RossKote(Kim): right
Ross Scott: I feel for the amount of Stuff we have in the shop that we’re providing. We’re like a high-end welder basically and you know this because of the cost of things that we have like the media. The stripper and being that we’re here in Hawaii and to get these things here is so expensive that I should be at least charging 150 an hour. And so you basically can look at it
RossKote(Kim): right
Ross Scott: that way that’s one way to look at it. Say how long is it gonna take me to do this job? So, you know here I go off the model of rims. You got four rims? It’s gonna take you know, four hours a time. You can break that time down you got an hour to strip and you have the amount of stripper you’re using now, of course, if you have it like in a containerized vessel and you’re reusing it, you have a time decay of of that so you can keep reusing it, but eventually you have to re-ad to it and add more so, you know, that’s a hard cost to figure out what that is, but you know you haven’t but let’s just look at it at time wise an hour to strip and then you have basically let’s just say two hours to sandblast and then rinse and then tape And then from there you got about an hour to code them. So there you have it for four hours.
RossKote(Kim): Right, so you should start with how much you want to start making per day or per hour is what you’re saying.
Ross Scott: well, yeah, you got to have them at almost two outlets. And one Outlook is the hourly and or the job just look at the job. What am I doing? And you know a good thing to go look if you’re new to business and you’re new to powder coating. I highly recommend checking out that show American Restoration on TV that guy is named Dale. He it’s amazing how he basically you’ll just take me through this long to do it gonna have paint and this sandblast is this and yeah, so your price is $7,000, you know, he’ll say something like that and you just go. Wow, he just rattled that right off his head and it’s pretty amazing how he does that but he’s been doing it for so long he can do that. I’ve gotten why I can route it off
RossKote(Kim): right
Ross Scott: pretty much quickly in my head also, but I have to put pay pen and paper to it because there’s hidden costs and you have to be very careful because that’s what can get you in the end.
RossKote(Kim): Yeah, and so sometimes it’s sort of a little bit of a confidence game and a math game. It’s about how good you are about adding numbers in your head but no one no Powder should feel. Like I guess my thing is I know when you have a customer staring at you in the face and they’re wanting you to give them a price right then and there no one should feel. Like they should have to do that at all and if they do feel compelled to do so. no, either already know that going in you’re gonna feel that downward pressure of like they want you to charge less or they’re you know, but charge take the other I challenge all these coders out there to actually charge more and see what happens. That’s the challenge because until you say well, yeah, I want this much for this week, you know, don’t even give them a reason just say I’m gonna do this job for this much and see what your customer says. I mean, yeah, it’s possible that they may say that it’s too much and they’re gonna go somewhere else than fine. Go go do that, but you don’t have to constantly push the roof up, you know, especially when you’re learning and trying out new things and you know, when you’ve nailed a good finish, you know, you can do it again, so I don’t know. What do you think of that advice?
Ross Scott: I think it’s great the best advice I have ever been given in my life was given by an old friend of mine and he basically said that when you’re charging and you give the price to the client, he should Grumble a little bit. He should basically go over that’s kind of kind of I don’t know. Okay, but you know what? I’m gonna do it that when when that happens, you know, you’re charging perfect you when you’re when you’re
RossKote(Kim): Yeah.
Ross Scott: not charging enough you go. Okay, it’s gonna be this much for the job and they go sure no problem and you’re like damn I should, you know like to charge more because you want you want them to kind of go just a
RossKote(Kim): Them to think yeah.
Ross Scott: little bit of hesitation on their And and if they’re not hesitating you’re not charging enough and that’s a good good bear, you know barometric
RossKote(Kim): Good point, very good point. Yeah.
Ross Scott: pressure model there.
RossKote(Kim): Right exactly.
Ross Scott: but I did have you know what, you know, I’m going over the hourly, you know, but I don’t look at that pretty much anymore that when I first started that’s how I I looked at it and I was like, okay, this is what I need to charge, you know, and to get the pricing but then after doing this for so many years I realized this oven makes this much in our this oven makes that much an hour and that other oven makes that much an hour and I’ve learned that by looking at
RossKote(Kim): Yeah.
Ross Scott: How I run my shop I can charge more or less for it. And when I get a big call for a big job. I immediately go. Okay. Well this job can be done in this oven. And I know this oven can run at this rate. And this is what I’m charging how and then what I do instead of figuring out I go well how many batches is gonna take to do this job and then
RossKote(Kim): right
Ross Scott: And then and then from there I come up with my price.
RossKote(Kim): Yeah.
Ross Scott: Of course, I add in the powder the time of taping racking too. You got a you know, some of these
RossKote(Kim): especially on yeah
Ross Scott: jobs. Oh my God, you could spend three hours just racking up. just one run in the oven and you
RossKote(Kim): Yeah.
Ross Scott: know, so you have to take that an account you you do because there you
RossKote(Kim): You do.
Ross Scott: know, it will bite you in the end if you know.
RossKote(Kim): So what we’re talking about is batch pricing, which I’m not sure how many
Ross Scott: yeah, that’s
RossKote(Kim): people do that. Now I think we use it in two different ways. We use it like how you just described in how you get your like… If you’ve got a big call and you’ve got to throw out an estimate to a client. It’s sometimes easier to break things down by the part or by, you know, instead of linear inches or feet or whatever. I I never we never really have prescribed to too much to the linear feed and I know they do it in the industrial thing and that’s different those people have all kinds of math equations and spreadsheets and and formulas for that stuff, but it’s hard for the batch coder or the custom coder to do it. That way. We just don’t have the
Ross Scott: Yeah, yeah, if you basically take all your pricing and of the batch for the oven and how many times you’re gonna do it how much powder you’re gonna use and so forth with supplies and you basically take that number and you divide it literally by how many linear feet you’re doing or whatever and you can come up with the linear foot price that way too and we’ve we have found that we’ve actually come under National standards for linear pricing. I’ve learned wow and it’s like you said, there you go. Well, maybe we should add more into here or or and you know, I look at you know, that’s right. That’s a real estimate. We gave them and I stick to it and and it always works out it always
RossKote(Kim): It does.
Ross Scott: works out. Now there’s also you know another. Segment to this as far as what you should charge, you know, and this is a more of a macro View and because we’ve been talking more of a micro view breaking everything down. And this is very important because a lot of people don’t look at this and every business needs to have a goal which they need to achieve and you know, you might say Hey, you know, I want to make you know, $200,000 this year. Well, how much money do you have to do in a day?
RossKote(Kim): Oh, yeah. it’s just right. alright And we blew through that one. Now Yeah, we got covid-19 right now exactly. But I think you’re right. I mean you got whatever it is you got to make enough so that you can cover your business expenses and then still put food on the table and pay your mortgage and your rent or whatever. You know what I mean? I mean that’s I think that we’ve covered that pretty well between you and Terry. And stuff, but I want to divert just a little bit off of this. Oh just I mean just another perspective. I guess it’s not really a diversion. But you know because there’s There are customer expectations and then there are deliverables. Right and sometimes you and I get into it. Yes, we’re a husband and wife team and we argue all the time about practically everything. and
Ross Scott: healthy arguing
RossKote(Kim): Well, we’d like to say that we can get kind of rowdy at times but you know because and and here’s here’s where I’m getting that because this is what you know, you are such a perfectionist and as many of the coders that listen to this show are And it’s just you can’t help it. It’s your nature. You don’t want something to go out unless it’s absolutely 100% spotless. Perfect. No flaws, whatever and then there’s the kind of pricing that and then there’s the price that the customers are willing to pay like the top dollar right? And this is another thing that I’m not sure how many people out there are doing, but you’ve got to understand that there’s only so much your audience or your customer or your target group is going to pay. based on your geographical location your brand and your product and
Ross Scott: Right, right.
RossKote(Kim): and you know, sometimes you go above and beyond with this and it gets me kind of riled because there’s only there’s still only going to pay this price and I know you do it just because that’s who you are. And of course that’s helped us in ways that you know. Reputation wise has preceded our company, but there is you know, you got to keep in mind that. You know without making yourself so crazy with the Perfection side. You still got to think back? Okay is my customer going to be okay, if there’s one little dimple in there or one little bump or you know, and that’s that’s where I think the subtlety of understanding that and being okay with what you’re delivering or what you’re pushing out the door really really comes to it. So are you gonna be that super neurotic if you you know powder coder where it has to be 100% perfect because if you are you should be charging top dollar top dollar if you
Ross Scott: Yes, definitely.
RossKote(Kim): if your crossovers like us where we do so many different kinds of jobs and we’re just scaling big little small old new whatever and in between, you know, we need to price a to be kind of come becom. Until timing things because there’s only so much time we can spend on rims and it’s not out of the spectrum of all the products we do or jobs we do. I’d rather take a bigger gate job railing job because we make so much more on that and it’s so much easier to do than a restoration job or something like that. So Do you want to add any I mean, did I kind of cover that pretty well, or I’d like you to add into that if you can.
Ross Scott: Well, I think you said that correctly, you know, obviously I think it’s new Fabrications coming in your shop. It is so much easier to deal with you know, so it’s quicker. It’s faster. You’re gonna get it done when you’re dealing with restoration. You’re tearing something back. I mean taking stripping and Sandblasting and You know, you’re spending way more time and there’s only so much somebody will pay. For their restoration and a lot of times I tell people you know what I can do for you. It’s gonna cost you this much and they go. Whoa and I go yeah, it’s a lot of time. So maybe you should throw instead of throwing good money after bad just buy new, you know, and you know, you
RossKote(Kim): Yeah.
Ross Scott: just have to kind of send them on your way and you know in all honesty. It’s the right thing to do because you’re you’re allowing your schedule to be more open to the better paying jobs, but you know, these These are
RossKote(Kim): Right exactly.
Ross Scott: But you know, these These are different times now, so, you know,
RossKote(Kim): true
Ross Scott: you know, you know, like I’ll take a job. I won’t necessarily want to do it and I might negotiate a little bit on it just because I know we got to keep the numbers up. So, you know, those are things you
RossKote(Kim): right
Ross Scott: have to keep in mind too and you know, you don’t want to be out of business you want to be in business and you know, you got to answer your phones. It and that’s the most important
RossKote(Kim): That’s the main thing.
Ross Scott: you know, and and and then you have
RossKote(Kim): Yeah it is.
Ross Scott:
RossKote(Kim): right and you know for those that are
Ross Scott: I know that
RossKote(Kim): sort of on the shy side or kind of procrastinate getting a job getting estimates out. My advice there is to not really get yourself out of that ditch and do it, don’t procrastinate getting job quotes out, do it as fast as you possibly can and challenge yourself to do that first before you even start powder coating for the day. I mean just do it because I’m telling you a lot of times. It’s the first estimate that they get that they go for because it’s the first one out that they get and a lot of the time these jobs need to get they’re just trying to get it out or done or they don’t want to you know, sometimes they’re waiting for three bids. Sometimes they just can go with the one I don’t know but Like get do that first do not procrastinate getting estimates out. That’s number one advice. I think the other thing too like you touched on with the restoration too is, you know, a lot of this stuff people inherit or they want to restore it or it’s an antique that their mother left them or you know, whatever and they get it for free yet. They want to restore it, but they won’t pay To for the restoration because they got it for free. Right like their mindset is so off kilter, right? I mean I had that happen to me and
Ross Scott: It’s yeah.
RossKote(Kim): the refinishing business with the furniture and she’s like I got this for free from my great aunt. Why would I want to pay all this money for you to restore it? Okay, definitely. Not your customer right? Get out the door, go away, you know.
Ross Scott: And that’s a very important thing. You just hit know your customer. Who is your customer? Who do you want it to be your customer you because that’s very
RossKote(Kim): now
Ross Scott: important. We know who our customer is and we basically say, okay. This is our customer. We are going to attract that customer here and that’s who we want, you know, so if you start bringing in those customers that you don’t want, you know, oh God and then it’s like it just like an eternal Loop. They’ll tell their friends and then you’re like no no. No, I don’t want to be doing this.
RossKote(Kim): Right. You don’t want to be that guy.
Ross Scott: I don’t like
RossKote(Kim): You know.
Ross Scott: I don’t I don’t I don’t do Iron Furniture. No, no. No, we don’t do that here.
RossKote(Kim): Yeah, yeah. Yeah, don’t don’t be that guy because you do and it’s just this endless cycle, but I think that that’s I think that’s really where we should end because that’s the confidence right? That’s the confidence that you have when you are doing pricing, you know,
Ross Scott: Yeah.
RossKote(Kim): so we’ve touched on the math part, but we’ve also touched on the confidence part.
Ross Scott: Well, yeah, it’s confidence, but you gotta look at it hourly daily monthly yearly and Once you figure those projections out what you want to do, you know, then you can break it down to a daily cost, you know and go. Okay.
RossKote(Kim): right
Ross Scott: This is what I need. We’re not a cost but a you know a goal, so you’re like, you know, I
RossKote(Kim): goal sales goal
Ross Scott: So you’re like, you know, I need to make this much of a day in order to make this much in a month in order to make this much of a year. And you know, it’s really important. I I learned that from my father my father taught me that and and you know, it’s like it was also awesome advice. I mean I used to go into his office as a young teenager and look at these charts and just go wow and you know, I was always I was just impressed by that and we have took in that and do that in our office and that’s what we do and it’s an incentivizer because you you see the numbers on the wall and you go. Okay, we got to do more, you know to make this happen, you know, and if you don’t see that When you don’t you’re not aware of it. And you know, and that’s all part of. Pricing you, you know, and it’s like
RossKote(Kim): Yeah.
Ross Scott: well, you know, you know if I just charged You know $10 more. What does that do to the end game? Oh boy, you’d be surprised what it
RossKote(Kim): right
Ross Scott: does. You know, I I run into this all the
RossKote(Kim): right
Ross Scott: time, you know, people charge me. Yeah, I’m charging $90 an hour to sandblast I go you’re what I go. How much does it cost to fill up your pot?
RossKote(Kim): right
Ross Scott: You know and then they go they don’t think of those things and I’m just like I’m like whoa, you know and that
RossKote(Kim): right
Ross Scott: comes, you know, to buying equipment. How much does it cost to run that piece of equipment, you know, you know when we were looking at that dustless Blaster, you know, I asked her I did the math on it. I was like, this is insane no way and
RossKote(Kim): apology is to anybody that owns one of those. Sorry.
Ross Scott: and I said we’re gonna
RossKote(Kim): We nearly we we nearly I don’t know. What’s the word we nearly missed the miss that one.
Ross Scott: No, it looked great. It looks good on the video. You’re like I get you get all you
RossKote(Kim): Great on.
RossKote(Kim): Yeah, we touched a bullet, right?
Ross Scott: Well, I’ll break out right out of business.
RossKote(Kim): Yeah, but I think there’s some stuff
Ross Scott: and you know
RossKote(Kim): that I found on the internet that I wanted to bring up really quick and they’re just four points that I just wanted just to do a couple, you know things back and forth with you and that is Number one everyone has a different starting point and I think that that plays into pricing and confidence. I mean, that’s no brainer there, right?
Ross Scott: Yeah. Yeah, I mean you have to basically figure out what you’re worth and You know, what? Is that? What is that number, you know mechanics are you know a good mechanic will be a hundred dollars $120 an hour, you know, just a normal run in the milk mechanics gonna be 35 to 60 bucks an hour and and it’s the
RossKote(Kim): Yeah.
Ross Scott: And and it’s the same thing with powder coaters, you know, you know, there is matter that time we went to Oahu and and their company it’s no longer in business, but we went over and checked out their facility and I went oh The Wonder they’re charging $50 a rim. I was like, wow, I mean there are
RossKote(Kim): Yeah.
Ross Scott: literally operating in the open error. I was like
RossKote(Kim): I mean, yeah dirt floors.
Ross Scott: I was yeah.
RossKote(Kim): Yeah, it was okay.
Ross Scott: know, so
RossKote(Kim): We get it. You know what we went over there to look there just to kind of go. Oh now we get it right. So now you got it and now you realize oh why we’re so much different or better right, you know and you realize but you have to go and do it
Ross Scott: It is exactly.
RossKote(Kim): you do, you know
Ross Scott: Well, you know if you’re paying for a nice building and you have nice equipment and that is money that is out of your pocket to do that and you have to refill that pocket. So you have to charge properly for
RossKote(Kim): Yeah.
Ross Scott: that.
RossKote(Kim): right
Ross Scott: You can’t give it away and you know
RossKote(Kim): but everybody starts at a different
Ross Scott: you you know.
RossKote(Kim): point and everybody, you know, like you look at roro you look at Black Label you look at velocity all these guys they didn’t start yesterday. They started as many years ago and you know to be like them overnight isn’t gonna happen but to you know, but you have to just keep doing you,
Ross Scott: No.
RossKote(Kim): you know.
Ross Scott: Well that and that’s our story we started remember we we started with the the whoop up the stupid little hot coat gun from Eastwood and we have the the infrared heat lamps. I mean, I didn’t even have a blast cabinet. You know when I first started
RossKote(Kim): I don’t even know what you’re talking about there. I know I mean, yeah, I know it was pretty Grim but we started right we did something we started, you know,
Ross Scott: Yeah, so you gotta start.
RossKote(Kim): nobody wants to remember that we started like that. No, you know, but that’s how we
Ross Scott: I remember how I started.
RossKote(Kim): started.
Ross Scott: I remember every excruciating decision in every hard turn where I had to make a left or right and I said this is what I’m doing and that’s unfortunately businesses like that and we are making decisions as of this moment.
RossKote(Kim): Yeah, tell him the good news.
Ross Scott: Okay powder coders out there. We just secured a new building. We’re moving our building from the west side of the island to the central part of the island, which will give us more business for us. This is a great move. We’ve been wanting to do this for many years. It just happens that you know with the covid-19. It’s just been a real pain in the butt. But yes, we are making that move and
RossKote(Kim): Yeah.
Ross Scott: it’s gonna be a good move. We’re very excited about other good news. We have the patent coming out for us on our secret weapon. I’ll just leave it at that and
RossKote(Kim): Yeah. We just filed that yeah, lots of good stuff.
Ross Scott: Yeah good things. So, you know even in bad times you can always have a positive outlook and that’s another thing always it’s that it’s easy to get negative. I mean you have to be real. But try to keep that positive outlook and good things will happen.
RossKote(Kim): Yeah. And we’re gonna have I’m setting something up with Kevin Coursin from PCI Powder Coating Institute hopefully in the next week or two and he’s gonna go over some highlights from the annual meeting that we attended regarding powder coating and the state of powder coating and where we’re at. So I’m gonna eek out as much of those details as I can from the meeting as to help everybody out there know where the industries are going right now and stuff, but let’s be okay. So here’s number two. Everyone is unique and has a different level of talent. So find out what your talent is if you like doing a lanai for we call it Lanai Furniture, but outdoor furniture if that’s your bag then and you do really well with that do that, you know, like be that guy, you know, if your rims or your brakes or Until brake calipers do that. You know it just everybody, you know, not everybody’s gonna be good at everything.
Ross Scott: No, and certain things you have to be super. Like perfectionists and you know, we’ve you know, we’ve realized that like with rims and stuff. You have to be at that, you know, 98 to 99% Perfection rate. You have to be that way and that’s why you have to charge if you don’t charge properly you’re gonna bite you the butt because you’re gonna end up redoing and stuff. You almost have the price in the fact that you’re gonna redo. a rim here and there, you know another another perfectionist thing
RossKote(Kim): right
Ross Scott: is like guns. If you’re doing like people that want their barrels powder coated and you know at the beginning I did this a few times and I realized while this crowd is super perfectionist and it’s like whoa, and it’s like I have to
RossKote(Kim): right
Ross Scott: slow down so much to do this that I would have to charge such an exorbitant rate. It’s not feasible and at that moment
RossKote(Kim): right
Ross Scott: that’s where I realized. We’re not doing that.
RossKote(Kim): right and the point is to train is to
Ross Scott: you know, but
RossKote(Kim): train the customer market up right?
Ross Scott: Yeah, well.
RossKote(Kim): I mean to let them know how well how awesome Powder Coatings are so that they will pay more for them right as
Ross Scott: yeah, and and there’s people that are
RossKote(Kim): a just a general segment.
Ross Scott: specialized and that’s what I was getting at. So, you know, I I don’t specialize in that that’s not my deal and if
RossKote(Kim): You know.
Ross Scott: somebody comes in and say I want this done I’ll say okay, it’s gonna cost as much as with it and if I have you know, because you know, all the guns are very difficult because of all the oil stuff and you just it it’s just one of those things like it’s like
RossKote(Kim): Yeah.
Ross Scott: you’re literally Powder Coating in WD-40 and it’s like, oh my God
RossKote(Kim): right
Ross Scott: fisheye Central. So anyway, you know, but there is
RossKote(Kim): right
Ross Scott: people that have more time and there are basically You know what? I you know, I’m gonna do this out of my house and I’ve got this and I don’t need to buy the big oven and I don’t need this and and I just got a little tabletop, you know bench Blaster and you know, their costs are considerably lower than my cost and they can do that and they can spend the time and provide a living for themselves. And that’s the thing. So, you know, if you’re coming from that angle at home guy, you know, you’re gonna have lower costs. You can bring everything down and charge less, you know, it’s just The big guys out there are going to charge more because we have to and we’re gonna but also we’ve been doing it for a long time. We’re gonna bang it out fast and and
RossKote(Kim): right
Ross Scott: it’s gonna look good says we have
RossKote(Kim): so here’s go ahead. Sorry.
Ross Scott: We just have the years of experience, you know, and there’s there’s
RossKote(Kim): right
Ross Scott: that can compete against a guy who’s been doing it. For 20 years versus a guy who’s been doing it for a year.
RossKote(Kim): right
Ross Scott: It’s just there is just no way.
RossKote(Kim): Well, think about this though, like I mean not where you know, a lot of guys that are starting powder coating companies today do have that experience. They’ve just been working for someone else too. So, you know, that’s you know, what we’re talking about is, you know, if you’ve been as you know, you’ve been working at a line cone system for a while and now you’re gonna get in a custom coating. I mean, there’s you know, there’s gonna be some learning curve there and stuff, you know,
Ross Scott: Yeah, and that that’s a mental thing. That’s a mental thing. So what you just described is a mental thing. Basically the guys have been working for somebody who’s you know, his whole entire time and now he wants to be the owner and you know it has been making the bids. We don’t know, you know, so if he’s
RossKote(Kim): Yeah.
Ross Scott: not if he’s not comfortable with that, you know, that’s entrepreneur 101 you have to be comfortable with that and that’s where I started off at the very beginning, you know, you have to run a lemonade stand first.
RossKote(Kim): Right. Yeah.
Ross Scott: you know, if you can’t run one of those you’re asking for trouble and basically you need to get the help or have a mentor or
RossKote(Kim): Mentor yeah, like get someone like Terry who was on earlier Terry’s awesome, and he’s Such a wealth of knowledge. I mean, we just barely tapped into what he knows. And he’s got a really good rapport. He really gets one-on-one with you. He listens. I’m just trying. I’m not trying to plug Terry just because that’s what he does but he’s certainly been helpful to us. We do use him but I mean I brought him on just for the pricing part, but he helps so many different kinds of he helps custom coders and line coders alike. So he’s got he’s just your man, you know, but let’s get on number three because this one really is key for us the resources available to you as another person are different so that definitely plays into us for sure because it’s all about the shipping over here in Hawaii. And anytime you’re buying a new piece of equipment. You got a cost in that the shipping is going to cost just as much as the as the equipment itself
Ross Scott: Yes, yes, so there’s and there’s lots of different pricing between the equipment itself. I mean you can go from one sandblast pot that’s you know, two thousand dollars or sub two thousand dollars and then you know, the brand up is almost five thousand. You’re like, well why why is this so much different? You know, so you need to figure out why that’s different and is it gonna mean that you’re gonna be operating at a lower cost? Because in the long run something that’s more expensive might operate at a lesser cost. So you need to understand those things. I’m trying to think of some other thing. Oh like the media, for example. You know Garnet we’ve come to the conclusion for us. It’s the cheapest medium to use for sandblasting. But in the mainland you have you can use that star bright and you can there’s other you can use coleslag. There’s you know various beads you can use all of those glass bead aluminum oxide and you can get those for a lot cheaper but for us we it was darn it. It’s the cheapest and that’s what we It’s the cheapest and that’s what we
RossKote(Kim): right
Ross Scott: keep in mind, you know, what works best and what’s quickest and that is the most important what’s quickest. and
RossKote(Kim): Yeah, definitely. I mean but it equipment and no doubt. I think everybody knows at this point how important equipment is in the powder coating, you know how to keep your game going and improve your game too. I mean, you’re not gonna I mean maybe some people will be yelling at me for this one. But you know, you start to see all these beautiful, you know shots on Instagram on Wheels and and you know calipers and all kinds of automotive and motorcycle parts and stuff like that guys. They’re not using the Eastwood gun to get that. Okay, they’re using the top of the line gima Wagner, you know, whatever. I mean they’re using those top of the line guns. I mean they just are so it’s if you think you’re gonna get that level. Until with your little $200 gun. It’s not going to happen, you know.
Ross Scott: Yeah, that was mind-boggling when I went from the Cheap-o gun to the Wagner. I was like and that was the old what EPG 207 model and I was just like wow and then of course when I bought the the Wagner Sprint
RossKote(Kim): You didn’t even know how to use that thing.
Ross Scott: I was like I was like wow. Yeah. I know I spent many times in the the message boards figuring out where the settings need to be, you know, and
RossKote(Kim): Yeah.
Ross Scott: those are it’s and nowadays it all comes prepackaged. You just hit the button and go, you know, it’s like yeah. All right, this is great and you know, but yeah you get what you pay for there’s you know, definitely a $5,000 powder coating guns gonna shoot way different than a thousand dollar gun. I can tell you that but that’s something I’d like to do is do a comparison shoot and some video one day of all the different various guns and
RossKote(Kim): That would be cool. Okay, Gama Wagner, Piccolo.
Ross Scott: Yeah.
RossKote(Kim): What’s the other one the cool can?
Ross Scott: Dark, Nordson. Well, there’s Nordson..
RossKote(Kim): Nordson yeah
Ross Scott: Yeah, and there’s many others. But yeah, that’s not but I’m I wasn’t
RossKote(Kim): give you our address.
Ross Scott: trying to name names, but you just did.
RossKote(Kim): Yeah, I did. I mean I’m a troublemaker today. Okay. Here’s the last one just know that there is always someone going to be better than you. Nobody wants to hear that but it’s true.
Ross Scott: Yes. Yes, and also, you know I could expand on that too is also no when you’re wrong and make a mistake, you know, so, you know, there’s always gonna be some better fish out there, you know, and when that happens you just go. Well, you know, it’s time that my game here. What do I need to do that? You know and and some people are just more predispositioned for this business than other people are so you
RossKote(Kim): two, yeah
Ross Scott: you know, you have to you have to you kind of have to be in the right mindset to begin with and then from there just keep elevating your game, you know, but let’s this is getting off we’re talking about price so
RossKote(Kim): Well, you definitely like to know, you almost have to be like you to get burned by the oven at 400 degrees. That’s quite a qualification. You definitely like to get shocked every now and then with electricity. You know, those are just some of the things you like to get chemical burns.
Ross Scott: Mhm.
RossKote(Kim): Those are just some of the things you have to put up with in this business. But you’re right and I you know, either you, you know, you’re either gonna be that person that’s gonna be the better person. And if you’re not it’s okay, I guess is what I’m you know, it’s okay to not be the next row or the next whatever I mean like It’s a there are plenty plenty room to be just the best of at who you are or what you do, you know.
Ross Scott: Yes. Yeah, and you get understand what
RossKote(Kim): So keep it reasonable.
Ross Scott: you’re lit, what are your limitations? You know, I have my limitations.
RossKote(Kim): Yeah, what are your limitations? Yeah.
Ross Scott: There’s certain things. I just don’t want to do just because
RossKote(Kim): No, I know.
Ross Scott: me, it’s not that I don’t want to do it because I can do it. It’s just to me it’s just not feasible in the cost to do it and you know.
RossKote(Kim): cost or time or your time because you
Ross Scott: and I watch I watch these guys, you
RossKote(Kim): know how long it’s gonna take.
Ross Scott: know, they do the taping and wiping and it’s just like wow, you know, you’re talking about almost, you know, an hour and a half to two hours on each Rim, you know, and it’s like
RossKote(Kim): Yeah.
Ross Scott: whoo, you know, your cautious went right up doing that, you know, and that’s just for the taping in the wiping and then you got all the other costs involved. So, you know, it’s like at what point do you get to charge and will the customer accept that that’s the thing so then there’s you know, it’s just one of those things so it comes to labor of love. you know and and there’s people that
RossKote(Kim): Yeah.
Ross Scott: do that but I I won’t you know, because I know I have to make money at this. So when it comes too much of a labor of love I kind of like, okay. I and I just tell the client I can do this but it’s gonna cost as much and then they go. Oh and I go yeah, it’s just because of the time but I can do this and I always always have basically another scenario for them to to make them go. Oh, well. Yeah, I like that. Let’s do that. You’re like, yeah. Okay, you know, so just just just
RossKote(Kim): Yeah, you can always change their
Ross Scott: don’t limit yourself.
RossKote(Kim): mind, right?
Ross Scott: Don’t limit yourself, but always have
RossKote(Kim): right
Ross Scott: Street for them an Avenue for them to travel down, you know, and you know,
RossKote(Kim): That’s a good point. Very good point. Yeah.
Ross Scott: so
RossKote(Kim): Yeah, definitely. Well, that’s a I think that’s a great way to end I this is Man, I didn’t think we were going to be able to talk about this much and cover so much. I might have to turn this into two episodes because you know, Terry had some valuable points, but we’ve also covered some other really interesting different perspectives and thought-provoking maybe stuff with just people haven’t had a chance to To even think about because they’re so busy powder coating, you know to you know, but it you do sometimes have to take some time to slow down and and invest in yourself. And one of the things to do is to invest in your pricing invest in your confidence and and and do a I guess a temperature take a temperature of where you’re at, you know, and and is there an opportunity for you to improve your pricing increase your pricing or are you you know, are you just happy where you’re at? All right. Well that concludes the episode of pricing and getting what you’re worth. I hope you’ve enjoyed everything you’ve heard today and you’re able to improve where you’re at. Please remember to like share and subscribe to the podcast and of course always always send us comments questions. If you’ve got an idea for a new podcast direct message anywhere, email us mailto: info@mauipowderworks.com , and I hope you have a great day out there. Take care.
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