August 1, 2025 • 41 mins
From $160K to $4.5M in 4 Years: The Monster Energy Painting Success Story
In this episode, we sit down with the CEO of Montenegro's , to uncover how he and his brother built a thriving painting business in Idaho, starting from scratch and scaling to millions in revenue. Learn their secrets to balancing residential and commercial projects, managing cash flow, and overcoming major challenges like delayed payments and contract pitfalls.
🔑 Key Takeaways:
- How knocking doors and relentless hustle led to their first $100K commercial project.
- The critical mistake in a contract that cost them a year of payments, and how they bounced back.
- Why maintaining a strong residential base is essential for weathering commercial cash flow delays.
- Their growth journey: $160K in Year 1 to $4.5M by Year 4.
- Tips for hiring, team communication, and staying positive in the entrepreneurial grind.
Whether you're in construction, painting, or any service-based business, this episode is packed with actionable lessons on scaling, risk management, and the power of family partnerships.
👉 Don’t miss their advice on finding the right market and saying NO to bad deals!
FREE WEBINAR ALERT: Want to stop overpaying in taxes? Join our free webinar: “Making More Money and Saving on Taxes: Bookkeeping for Painters” happening August 5th. Save your spot here:
https://bookkeepingforpainters.com/Webinar
For being a loyal listener, I want to send you a copy of my new book Profitable Painter. Inside, I’ll show you the exact frameworks that have helped painting businesses save big on taxes, increase profits, and scale with confidence
Head over to profitablepaintercpa.com/book and grab your copy today. Don’t wait — this is my gift to you for being part of the Profitable Painter community.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Profitable Painter Podcast.
The mission of this podcast issimple to help you navigate the
financial and tax aspects ofstarting, running and scaling a
professional painting business,from the brushes and ladders to
the spreadsheets and balancesheets.
We've got you covered.
But before we dive in, a quickword of caution While we strive
to provide accurate andup-to-date financial and tax
(00:20):
information, nothing you hear onthis podcast should be
considered as financial advicespecifically, welcome to the
(00:51):
Profitable Painter Podcast, theshow where painting contractors
learn how to boost profits, cuttaxes and build a business that
works for them.
Speaker 2 (00:55):
I'm your host, daniel Honan, cpa and former painting
business owner, and your guideto mastering the numbers that
drive success.
So let's dive in and make yourbusiness more profitable, one
episode at a time.
I'm super excited today to betalking to Jose and Alan of
Montenegro Painting, superexcited to jump into it.
Welcome to the podcast, guys.
Speaker 3 (01:17):
Thank you.
Thank you Appreciate that.
I appreciate the opportunity,man.
Thank you.
Speaker 2 (01:21):
Absolutely no.
I'm glad to have you.
You guys have built a greatbusiness over there in idaho and
so I um, I think you will bringa lot of value to the podcast.
I'm super excited to jump intoit.
Uh, could you just, for thelisteners, could you kind of
give us a picture of what yourjourney has been in the painting
industry, like how did you getstarted and what are some major
milestones that you've had alongthe way?
Speaker 3 (01:44):
all right first.
First of all, I just want tointroduce myself.
I am Josue Montenegro, ceo ofMontenegro Painting and
Construction, and I'm Ale.
Speaker 4 (01:54):
Montenegro.
I'm the CEO of MontenegroPainting and Construction.
Speaker 3 (01:58):
So when we started, we moved from California like
five years ago, almost fiveyears and a half ago, and we
started working.
We was working for anothercompany in Idaho, like you know
employees per hour.
And one day, you know, I justtalked to my brother and I told
him bro, we need to makesomething.
You know, together we have agood communication and quality.
(02:19):
You know, we're master painters, we know the work, you know
100%.
So we decided to do our ownbusiness.
You know, we build the logo andwe find some magnets, some
signs, magnet signs, and we buyone small black Tacoma and we
start knocking doors.
You know knocking doors and bigcompanies, huge painting
(02:42):
corporations, doing cheapest,cheapest work as a contractor,
you know.
And five months later, oralmost eight months later, the
people they just don't knowabout, montenegros, you know,
and who they are, or they do agood job.
So that's how we start.
Speaker 2 (03:01):
Nice.
So it sounds like you guysmoved over from California to
Idaho, you teamed up with yourbrother, alan, and you guys just
basically started doingguerrilla marketing.
It sounds like you're doinggetting putting signs up and
then going door to door justknocking and trying to find
folks that were that need somepainting done.
Speaker 3 (03:21):
Yeah yeah, we make some business.
Car flyers, uh, door hangers.
We was walking on um stockdivisions knocking doors um if I
see construction and my brotherwe saw like construction.
We stopped by and we tried tofind the superintendents or
somebody on the project andintroduce myself and offer them
(03:45):
our services.
That's how we started.
Speaker 2 (03:49):
Okay, yeah, definitely guerrilla marketing.
That's awesome.
I mean business card flyers.
Doing networking Were most ofthe starting out in the
beginning, were most of the workthat you're getting residential
repaint, I'm assuming.
Speaker 3 (04:04):
Yes, okay, yes, it was residential On the beginning
.
Right were most of the workthat you're getting residential
repaint.
Speaker 2 (04:09):
I'm assuming yes, okay, yes on the beginning.
Speaker 3 (04:14):
Right, and that was that was back in.
Was it 2021?
Yeah, 2021, yeah, that was backin 2021 july.
Speaker 2 (04:18):
We started the business in july 2021.
Okay, so you started gettingtraction with.
Okay, so you started gettingtraction with residential
repaint.
And then where did it go fromthere?
Speaker 3 (04:27):
So in the first year we didn't do any commercial job,
just residential jobs, and wemade some good profit.
So we started investing more inour suppliers, you know, and in
our equipment too.
So we start doing some smallcommercial projects because we
(04:51):
do drywall texture, interior andexterior painting.
So then we start.
You know, the painting method,you know, is completely
different in residential thancommercial and it's a different
animal, you know.
So we start learning about it.
We have some bad experiencesand, uh, then we start after.
(05:11):
When we learn, you know, uh, westart from there, uh, going
more commercial.
Now I can tell you, you know,we do like what, 40 and 50, or
maybe 40, 60 percent residentialand 40 commercial yeah, yeah,
okay, so 60 residential, 40commercial.
Speaker 2 (05:31):
Um, in the the second year you started getting some
of those more commercial jobs,and are they?
Were they, uh, business tobusiness, or were you working
under a general contractor, orwas it a mixture of both?
Business to business?
Yeah, business to business, orwere you working under a general
contractor, or was it a mixtureof both?
Speaker 4 (05:45):
Business to business.
Speaker 3 (05:46):
Yeah, business to business.
Speaker 4 (05:48):
Yeah, they were directly to us.
Speaker 2 (05:51):
Okay, so business to business that's always usually
seems to be the better routewhen you go commercial.
Is that direct relationshipwith the business owner instead
of having to go through likeworking under a general
contractor.
How did you guys get into that?
Because that's always a bigthing where folks they're in
residential repaint and thosecommercial jobs.
(06:14):
They can be a lot bigger thanresidential in some cases and
that can be pretty attractive.
How did you get into thecommercial space?
Speaker 3 (06:24):
Can I tell you a funny history.
You know it's most it's likelucky.
You know we was really luckybecause one winter, the first
winter in Idaho, winter is kindof slow because you cannot, like
, do nothing outside, noexterior paint, just inside.
So one day I stopped by to oneproject, you know like it's a
(06:47):
huge multifamily, 210 units, andthat was already framed in the
concrete windows and everything.
And I just go directly to onesmall trailer you know the
superintendent trailer and Iknocked the door like Gorilla
Market.
What did you say?
And I knocked the door and abig guy, a huge guy, you know
(07:11):
his name is Jeff, you know Jeff.
And a big guy, he opened thedoor and he told me, hey, what's
up?
And I said, hey, man, I waslike a little bit intimidated
and I said, hey, hey man, I amJosue Montenegro.
You know we are a small business, you know, and we do good work.
We just need one shot, give methe opportunity, and he doesn't
(07:31):
care, trust me, he doesn't care.
So I give him my, I give him mybusiness card, and I just stood
around, you know, and henoticed my name and he asked me
hey, hey, yo, what's?
Your name Is Jose or jose.
And I told him it's jose.
Oh, where are you from?
I'm from honduras.
And he told me oh, my wife is,my wife is from honduras.
(07:53):
So we start talking over therelike for four or five minutes
and there, there the historycome.
He told me do you know what?
Tomorrow we have a nationalmeeting with the owners.
Can you come tomorrow?
I'm going to give you a shot.
We hired some painters fromUtah already.
They have a signed contract.
But I'm going to give you ashot, if you can, I'm going to
(08:16):
give you the opportunity to goin the meeting.
When is your time?
You have to sell your products,sell yourself, you know.
And I told him, yeah, so nextday I was there at 7 am in the
morning with my sherwin williamrep.
So we make a plan.
Uh, we uh check all the plansso I go like a hundred percent
(08:37):
like prepare, you know, to talkto those guys.
So, yeah, when there was my time, you know, uh, the owners, they
asked me like a thousandquestions, though, like a
thousand questions in less thana minute.
You know, like quick, yeah, myhands, my hands sweating and
everything.
And uh, yeah, they don't tellme nothing.
They just told me okay, goodjob, nothing.
(08:59):
So four months later I wasdriving one of my personal cars,
because we didn't have a fleetyet.
You know, I want a small redcar, a Honda Civic.
And I received a phone call inmy cell phone and hey, we're
calling from the strategicbuilders from Utah.
I just want to let you know youguys are a work on the project
(09:22):
and that's a.
That was a six hundred thousanddollars project.
Yeah, that was the first one 210unit, and I started crying on
that moment though that's a hugejob six hundred thousand
dollars yeah, one, for I wasscared and I was thinking what
I'm gonna do, you know how wegoing to do this big project.
(09:44):
And another one I was reallyexcited.
So I called my wife and I saidbabe, we made it.
You know, we made it.
And I called my brother we madeit.
Speaker 2 (09:58):
And yeah, so that's how we started.
Speaker 3 (10:02):
And that was in the second year that you got that.
Yeah, that was in the beginningof 2022, true, yeah, okay,
beginning of 2022.
So then, um, I, we starteddoing the work, so we got more
income, so we started investingmore in our fleet equipment,
employees and, uh, big, uh signs, you know signs, and we started
(10:25):
having, like, more phone calls,more phone calls, more phone
calls for commercial you know,because I have a big commercial
going on.
Speaker 2 (10:35):
That's amazing and you said you were lucky.
But it sounds like you kind ofmade your own luck because you
were going out.
You're doing door knocking notonly residential homes but also
commercial properties basically.
So it doesn't sound like you'relucky to me.
It sounds like you're justworking hard and you went out
(10:56):
and you made things happen.
Speaker 3 (10:58):
But that's amazing $600,000 project and you're just
working hard and you, you wentout and you made things happen.
But that's amazing.
Uh, six hundred thousand dollarproject and you're only eight
months in and you locked that in.
So that's sorry, and we makelike how much we're making
change orders, so that one sothat probably went probably like
point one point million.
Yeah, we make almost a millionover there.
You know we change orders like400 more and exchange orders on
(11:23):
that project.
Speaker 4 (11:25):
We have the drywall, and they had a drywall before,
so they try to take the milefrom there.
So they give us the contract atthe end for drywall too.
So we put our grows there tostart the drywall, and then
that's what we get more, youknow, income from there that's
awesome and and uh and the.
Speaker 2 (11:47):
The crazy thing is, you know you said you're you
have these big commercial jobscoming in, but at the same time
it's only 40 percent of yourtotal revenue, so you're still
doing most of your work withresidential right.
Speaker 3 (12:00):
Yeah, usually what we do, daniel, is do you know,
commercial.
They take too long to pay.
I don't know in other states,but in Idaho they take between
60 to 90 days to pay you andthey have big amounts, big
checks.
So what I do with my brotherit's, uh, we keep one crew.
(12:21):
We have 15 employees right now,so we keep one crew on
commercial residential.
So, do you know the residentialis quick money, you finish and
you get paid.
So that money is the cash flowfor us.
You know the cash flow.
We can cover payroll insurances, workers' comp suppliers, and
(12:43):
then when the big check comes,you know from commercial we can
invest or saving, you know, forpayrolls.
That's what we do.
Speaker 2 (12:52):
That's really smart.
So because of the long theterrible payment structure,
payment schedule for commercialwhere you're getting, you're
having to wait 60, 90 days toget paid and it's really hard on
cash because you have to payout your team, you have to pay
for your materials and you'rejust waiting for cash to come in
.
And to mitigate that, you keepa crew who's focused on
(13:15):
residential, who's getting thosepaid quickly because you have
those shorter term projects withresidential.
Are you also taking a depositon residential as well to help
with that further?
Speaker 3 (13:26):
Yeah, usually we take 20%, sometimes depending on how
big is the job and how big isthe amount, and sometimes 50%.
And then at the end, my brotherAlan.
He walked through around withthe owner and they have five
business day to pay us theremaining balance at the end.
Speaker 4 (13:46):
Yeah, okay.
Speaker 2 (13:49):
So 20 to 50% down for the residential side and that's
keeping the cash coming in sothat you can weather that long
period of time on the commercialside of waiting to get paid.
And it sounds like you have areally good balance too, because
most of the work you're gettingis residential and then less
than half is coming fromcommercial.
(14:10):
So you're able to manage thatcash flow, which is super
important for commercial,because I know a lot of folks
they get into trouble when theytry to do just commercial and
they don't have financing linedup and then they're just putting
money on credit cards orwhatever else and they go into a
lot of debt and they're reallytight on cash and it can be
(14:32):
really painful because you'rejust waiting to get paid.
Speaker 3 (14:35):
Yeah, honestly, in 2022, we make a big mistake.
Uh, we, we, uh, we was a workfor one project at Fred Meyer.
It's a Fred Meyer it's a bigsupermarket here in Idaho and we
make that project for one bigcompany it's a big corporation
here in Idaho 20, $225,000project.
(14:57):
So we handled that project andthat was the second year of
Montenegro's and we was excited.
You know another big oneworking nighttime, because in
supermarkets or hospitals orschools, you only work nighttime
.
You know the payroll is timeand a half, so increase your
(15:17):
cost, your labor cost, right,and uh, okay, we have a budget
from the other project, uh, fromthe apartments, and we use that
budget to cover the labor onfred mayor.
You know fred mayor store and,uh, this company, they take like
almost a year to pay us.
(15:39):
We went, yeah, we sued them andwe went in the court like on
properties, liens on thebuilding.
They don't care.
We went on court like fourtimes, you know, and they pay us
the money like small amountsand small amounts like that, and
(16:00):
we sign a contract.
We make a mistake.
We sign a contract and thecontract say you know, when the
owners pay them the full amount,they can pay us the full amount
.
So that takes like almost ayear.
On that year, in 2022, we almostwas in bankrupt.
In bankrupt, you know, we waslike kind of scared.
(16:22):
We have a really hard time topay people, uh, to pay suppliers
, you know.
And after that, in 2023, wechange.
We change the metal, you know.
Okay, now we work with, uh, theteam here in the office.
If we have a big budget, Istart looking for a big
(16:44):
commercial.
Okay, I can't fish a big oneright now because I had the
budget, you know, for any reason, you know, and if we don't have
that budget, I just keep inresidential, you know, I just
stay there yeah, okay, thatthat's really smart.
Speaker 2 (16:59):
So in 2022, you had a large project $225,000 from
this friend mayor's store andyou completed the project and
they took like a year to pay andthere was a hidden clause in
the contract that said that theydidn't have to pay you until
(17:19):
they got paid, and so that waslike a big learning experience.
It sounds like that'sdefinitely a good thing for the
listeners.
Like, if you're getting intocommercial, make sure you
understand the contract or atleast have a lawyer or somebody
who's good with contracts tolook it over for you so that you
know what you're getting into.
(17:39):
So that's a really I appreciateyou sharing that, because
that's that can be a mistakethat other folks can avoid yeah
but I really love the in 2023.
After you learn from that largeproject.
That kind of went the wrongdirection.
You changed the way you handledtaking on commercial projects.
(18:01):
You basically sounds like youyou make sure you have enough
residential booked.
Once you get to a certain levelof residential booked projects,
then you're like, okay, now wecan take on another commercial
because to make sure that yourcash flow doesn't get too
strained, is that right?
Speaker 3 (18:18):
Yes, exactly that's what we do.
Speaker 2 (18:21):
Okay.
Do you have a formula, or is ita certain amount that you're
looking to book on theresidential side before you?
What does that math look like?
Speaker 3 (18:32):
I think no less than $100,000.
You know, probably four, two,three months of payroll.
That's usually what I try tosave before to take a big one.
Yeah, okay, and I think,montenegros, we can handle one
or two big ones per year, nomore than that, because it's a
(18:53):
big risk, not commercial.
So that's why I usually take,and we usually take, like a
small clinics, chiropracticclinics, uh, starbucks, um, you
know, like a small commercialjobs like thirty thousand
dollars.
I, I take that ones, you know,like the same day I take it, but
on multi-families, uh, schoolhospitals, families, school
(19:17):
hospitals, like a big commercial, like talking about big amounts
of money.
Speaker 2 (19:25):
I just take one or two per year, and so big
projects, is that like definedas over $100,000?
Or is that like considered abig project for you?
Speaker 3 (19:36):
Yes.
Speaker 2 (19:37):
Okay.
So you kind of limit how manyprojects you take because you
want to make sure you have thecash in the bank to cover
payroll on that project beforeyou start to go do it because
you know you're not going to getpaid for 60 days, 90 days or
maybe even longer if you havethat fred meyer thing happen
again where they didn't pay youfor a year.
So I think that's really smart.
(19:58):
You're basically making sureyou have the labor covered
because you got to keep payingyour people during the
commercial jobs.
You can't put that on yourcredit card.
You got to have cash for it.
So you make sure you have thecash in the bank from your
residential before you get intoany larger commercial project.
Speaker 3 (20:15):
Yeah, people ask us you know how we make it right,
how we make it right, uh, how wemake it?
Because, uh, until 2025, wejust barely got the line of
credit on the bank formontenegro's, you know.
So we was using our own money.
Everything is montenegro'smoney, not bank money.
So right now, until this year,because we grow a lot, so, yeah,
(20:39):
we don't have any options.
So we got to the bank and then,yeah, I like the credits and
they give us a lot of credit.
You know, now we can handlemore nice, nice.
Speaker 2 (20:49):
Yeah, that's, that's great.
So now you have a little bit ofextra room with that line of
credit.
Um, I'm sure you had toprobably provide some financial
statements and all that to getapproved.
Usually the bank want to seekind of what your your profit
and loss and balance sheet andall that stuff looks like.
But you get approved for lineof credit.
So now you can have a littlebit more flexibility on on those
(21:11):
commercial projects.
Speaker 3 (21:11):
It sounds like yeah, and it's a bank, they know us.
So when we start the business,we start with that bank.
And yeah, they ask us, right,like tax, uh, tax, um, or taxes,
paper taxes, you know, liketaxes proved for three years.
So they check income, uh, theycheck the profit, the gross
(21:33):
profit, and uh, they told usokay, this is what you guys can
have right now.
Do you want to take it or not?
And they say it's a good start,then it's 2026.
We can ask them for more.
It's just a bet on how the yeargoes.
Speaker 2 (21:52):
Yeah, and lines of credit are great because you
don't have to.
You can just have thatavailable if you need it, but
you don't have to use it.
It's just there if you need it,which is great, especially for
commercial.
So you could keep doing whatyou're doing with making sure
you have the cash, but ifsomething really goes wrong, you
have that line of credit as abackup.
Speaker 3 (22:09):
Yes, yeah.
Speaker 2 (22:11):
That's right, yeah, that's super smart, okay, super
smart, okay.
So 2021, you got started, gotinto residential.
2022, got into some somecommercial, learned some lessons
about those larger commercialjobs, figured it out in 2023 to
manage your cashflow bybalancing residential and
(22:31):
commercial projects.
And, uh, and now in 2025, youhave that line of credit from
the bank.
Speaker 3 (22:47):
Along this journey, the last five years or so.
What's your revenue look likeeach year?
The first year, in 2021, westarted business in July.
So between July to December, wejust make $160,000.
Just me and my brother and mybrother-in-law so we was working
together on the field.
The second year, we made$485,000.
(23:13):
Yeah, that's 2023, right.
And the following year, we make$1.7 million in 2024.
2023, yeah, $1.7 million.
And last year, 2024, we made$2.5 million.
Wow.
Speaker 2 (23:32):
That's awesome.
That's amazing growth.
Congratulations on that.
That's pretty amazing.
Speaker 3 (23:38):
Yeah.
Speaker 2 (23:42):
Go ahead, congratulations on that.
That's, that's pretty amazing.
Yeah, go ahead.
Oh, and I was just saying like160 000 in the first six months,
um, and then now in 2024, fullfull year, in 2024, 2.5 million.
That's amazing growth.
I mean that's, that's crazy howfast you guys grew, so you, you
must have been kind of busythose, uh, those four years.
Speaker 3 (24:00):
That's a lot of work yeah, to be honest, we make a
lot of sacrifices, you know,because, uh, now we have an
instructor, uh, uh, becausewe're growing.
So you have to.
You know, like, for example, wehave our executive assistant,
we have a, a secretary, mybrother, he's the PM.
You know a CEO, he runs all thefields, and I am the business
(24:24):
guy.
You know the sales guy, theestimator, and we have our
leaders it's true, yeah, it'strue and a superintendent.
So that's because we're growing, so we don't have time talking
about time, so we make a lot ofsacrifices.
On family, you know, sometimeswe work nights, sometimes we
(24:45):
work weekends, but it's worth itthough, you know, because it
depends on your goal, yourvision.
You know where you want to go.
Yeah, we're very clear on that.
Speaker 2 (24:58):
Do you mind sharing what your vision is like?
What do you have?
What's what's the plan?
Speaker 3 (25:03):
I don't know my brother's one, but mine, in my
personal opinion, um, this yearI want to buy a land, you know,
maybe one or two acres, and um,maybe next year find a
construction lawn and, uh, buildown place, you know, like more
than a house place, like bigwarehouse, and that way we don't
(25:23):
have to rent, you know, make aparking lot or office.
That's, that's one of my goals.
Speaker 2 (25:31):
Yeah, that'd be great , that's awesome.
Speaker 4 (25:35):
Well, same, we would do the same for a company.
I just going to follow you,yeah, right.
Speaker 2 (25:40):
Yeah, that's awesome.
So at this point, which whichyou have is a alan's doing the
project management, you have oneor two sales people uh, just me
right now uh, sometimes hehelped me, but it's just me
right now okay, so you're doingthe sales right now, and then
(26:03):
you have obviously your crewsand your crew leaders, and then
you have someone in the office.
Is it one or two people in theoffice?
Speaker 3 (26:12):
Two.
So usually what I do is on theweek, five business days.
So on the week I take two daysor three just to go outside to
do estimates, contracts,networking, you know, talk to
other contractors and otherpeople relationships.
I take three and two daysinside my office doing all the
(26:37):
estimates and pass the estimatesto my executive assistant.
So in the office we always weare like three or four people
all the time, yeah, and then uh,11 or 13 on the field yeah, and
and so, alan, you're doing allthe project management for the
(26:58):
the 2.5 million or greater atthis point I'm the one who take
care of the job.
Speaker 4 (27:03):
So if the job has to be done the right way, quality
first of all.
We do quality.
I specifically myself doing aquality control and stuff like
that, you know.
So the job can pass and peoplecan still call on us.
So that's one of the reasonspeople call us, because we're
like show up on time.
So if they call us, this iswrong.
(27:24):
We always show up without likea charge, without nothing.
We just go there, try to makethe clients and people happy.
That's the first thing that weliked and people love that,
because if the customer clientsare happy, we're happy and
everybody go home and everybodyget happy.
So that's why it's a hard jobfor me, because sometimes I got
(27:45):
to deal with a lot of stuff,especially with the crews,
because I got my kids too, youknow, and it's like if I haven't
more kids, I know the place orI run with them every time
telling them do this this way.
So it's fun.
I'm still I'm learning and like, uh, years ago I used to work
at California as asuperintendent a big project, uh
(28:06):
, commercial stuff too.
So I got a little bit.
I know a lot of stuff about it,so I know how to deal with the
stuff.
So that's why that's one of thethings that make us grow up too
, because I got the how do yousay the I forget the word
experience about it.
(28:26):
So that's what we, that's whatit made.
My brother has his ownexperience and different stuff,
and I have experience in my, onthe job, on the work, so that
make us a good company, you know, like good communication, good
team.
So that's where we are rightnow.
That's why that's why we'rehere.
Speaker 2 (28:42):
So and it was so to uh doing being the production
manager on 2.5 million or more.
That's, that's a lot.
Um, so what is the scope ofyour job?
Because you know some folksdifferent painting companies.
They define their projectmanagers role a little bit
differently.
So I'm just curious like youknow, the office probably helps
(29:06):
with some of the onboarding of anew customer, like getting
colors.
Where do you actually pick upthe responsibility from?
Speaker 4 (29:15):
So I take it once my brother do the estimate and they
said, ok, this approval.
I just Elizabeth the office.
She sent me a text or theinformation of the property and
I just go walk with thesuperintendent and check it out
before we start the job and,knowing more about the customer,
(29:36):
I see, tell them who I am andfrom there I just got, I got the
job and then from there I justgive it back to the office when
it's done so they can charge,and then I walk with the person
and get the money back.
So from that call, from thattext, everything is my
responsibility.
I'm the person who has to doeverything from there.
Speaker 2 (29:57):
Okay, so basically the estimates signed, the
proposal signed and the officejust lets you know hey, we have
a new customer, and then youtake it over from there.
It sounds like.
Speaker 3 (30:09):
Yeah, usually.
So when we have an option, youknow, to approve or decline,
right on the customers.
So when they get approved, myoffice she called them or she
called the customers and theyput in contact and they start
making a contract, because onthe beginning we was working
(30:29):
without contract and a lot ofpeople they don't pay us.
You know that we get a scam alot and for big corporations too
, they steal money.
You know big, huge corporations.
So now, uh, we are different,so when it's approved we make a
contract.
When they sign the contract, uh, they can do that
(30:50):
electronically or they can stopby to your office.
So when, uh, they sign that weask them, you know, for, uh, the
percent, sometimes the depositis 30 or 50 percent what I was
telling you, um, and then wepass everything through island
and we schedule.
You know we check the schedule,which dates we have
availability to put that job on.
Speaker 2 (31:20):
And yeah, right on, ready to move forward project is
approved, like you're taking it, and then getting getting the
initial deposit, if needed, andgetting it scheduled, and then,
and then from there, alan takesit from there.
Speaker 4 (31:35):
yeah, okay, gotcha they've got a schedule for me
too, so they have our schedules.
So they make a schedule for mea day so I can walk with the
superintendent.
Speaker 2 (31:46):
So just walk and see how we're gonna do the job and
from there, yeah, and are youproducing the, the residential
side too, as well as thecommercial?
Everything okay yeah, cool that.
That, yeah, that's, that's.
That's a lot on your plate.
So, uh, it seems like are youguys gonna produce in 2025?
(32:07):
Like what's your projected?
Are you guys going to producein 2025?
Like what's your projectedrevenue?
Are you guys going to be about2.5 again, or are you going to
be able to?
Speaker 3 (32:13):
do more than that.
More than that, the goal is tostay there, or the goal is 4
million.
You know, hopefully we can hitthat amount, but we'll see man 4
million in 2025?
.
Yeah, that's the goal.
Yeah, so we're now just in themiddle of the year.
I think we're closing likealmost a million point three, a
(32:36):
million point four, so I knowmaybe three million.
Speaker 2 (32:41):
Yeah, three million.
Okay, it seems like it could be.
I could be wrong, because thereare some painting businesses
that can get away with, you know, in terms of we need to bring
on another project manager oranother salesperson to really
get past that point.
Speaker 3 (33:18):
Yeah, I think we were talking about that.
You know, we do meetings hereat the office.
We do one monthly meeting orsafety meeting as well.
So when we talk about it, Ithink we're almost on that point
, you know, we're almost on thatpoint to hire another sales guy
, another sales guy and maybeanother project manager too,
(33:42):
because it's too muchresponsibility for my brother.
Brother, it's a lot, you know.
And, um, sometimes he had todeal with clients, he had to
deal with, uh, employees, he hadto deal off with the office and
he had to deal with suppliers.
So, you know, so it's a lot.
So here we are, we're trying toget in there, uh, because it's
(34:07):
just depend the demand, know,and right now we have a big
demand.
But usually in winter it's kindof a little bit slow, you know,
because you know there's a lotof snow around.
But in summer, you know, maybefor next summer we have to do it
, because summer is our bestseason, you know it's the best.
It's starting from what?
(34:28):
april may yeah, I think betweenmay and may to october.
You know that's our biggest,biggest months you know, but
we're talking about it.
You know we have, we're talkingabout it and I know we have to
get it there.
You know another salespersonand another.
Speaker 2 (34:47):
Uh em yeah yeah, it seems, yeah, you guys are, you
guys are killing it and you'redoing, I'm sure, a ton of work.
So that's pretty impressive todo to have one salesperson, one
production manager and and dothree or four million in revenue
.
So that's kudos to you guys.
But yeah, it seems like youknow to get to the next level
(35:09):
beyond that, probably a projectmanager, another salesperson to
add to the team, and you know Iknow a lot of folks for
compensation packages.
You know folks are doing like8% for a salesperson usually.
You know, maybe, maybe pay themlike six and a half percent of
(35:30):
what they close and then you addin like the payroll burden on
top of that ends up being about8% of what they close.
Maybe mix it between base andcommission, um, and then tie
that to like, uh, customersatisfaction scores and gross
profit is common things to tiethe compensation to those, to
(35:52):
those, those metrics like Googlereviews or gross profit.
Speaker 3 (35:58):
Yeah, usually here they work by commission.
You know, in Google reviewsowners, they paid him like a
hundred bucks for each review.
You know, for the sale guyscommission.
You know, for the uh, cell guys, um, commission.
You know, whatever they close,uh, they commission, they have a
commission about it.
But we didn't hire, like uh, pmright now or um, another
(36:21):
superintendent or cell guys,because we're kind of kind of a
little bit picky right now, youknow, on hiring, because you
never know, you know whichpeople is going to show up.
And uh, we made that mistake inthe beginning.
You know, we just was hiringpeople, a lot of people, hiring
people just to show the customer.
Hey, yeah, montenegros, theyhave a big manpower, they show
(36:44):
up everywhere, you know.
But we have struggles withpayroll, we have struggles with,
uh, quality control, we havestruggles with workers come, you
know, and uh, and struggles,you know, with employees.
They just show up two, threedays and they just gone, you
know.
So now we, we didn't work likethat.
Elizabeth, she is the uh, the so, and Carla.
(37:09):
So we have an application, sothey have to fill in the
application for work, you know,and if we are hiding those
applications, they go to me andmy brother.
So we read everything and ifthey have the feed like what
we're looking for, we call them,you know, and they come to our
(37:29):
office and we have a personalinterview and if they have, we
have that vibe.
If we have that vibe and weknow, oh, that guy, you know
what he's talking about, so wegive them a shot.
You know, if doesn't, we justcall it an alignment?
Sorry, but you're not the rightfit, you know.
Speaker 2 (37:47):
Yeah.
Speaker 3 (37:48):
So that's why you know we're looking, we're
waiting for the good.
That guy is going to come.
We know he's going to come.
Speaker 2 (37:55):
Yeah, it's definitely a key role.
Yeah, project manager,salesperson, very, very
important role.
So definitely choose wisely,for sure.
Speaker 3 (38:05):
It is because, look, it's your responsibility, right?
It's your brand, it's your name, it's your company, you know,
so has to be somebody who lovesyour company, though you know
who loves, who loves what he'sdoing, because, if done, it's a
big, big risk.
You know it's red numbers, yeahyes, sir, awesome.
Speaker 2 (38:26):
Well, jose and alan, you've been super generous with
your time.
Really, you've dropped a ton ofvalue on the listeners and you
guys have built something reallyamazing over there in Idaho
Super impressed.
And was there anything thatyou'd like to close out with or
ask the audience of, or anythingelse you'd like to say about
(38:48):
growing your business to thelevel that you have to give any
final tips or anything before welet you go today?
Speaker 4 (38:58):
Just keep it positive .
That's the only thing that Ican say.
A lot of people don't trustthat brothers can make it,
because that's true.
People say when they have abusiness with your brothers or
family, they broke out.
So it's a lie.
If you're positive and you havegood communication with your
(39:20):
brother or whoever is yourpartner as a family, that's the
main thing that you have to do.
Keep good communication andgood relationship.
That's what we have as a family.
That's the main thing that youhave to do, like keep a good
communication and goodrelationship.
That's what we have.
So that's what makesMontanerros more stronger, you
know, as a family and as abusiness.
That's the only thing I can say.
Just keep it positive.
Keep your mentality like thatand don't never give up.
(39:43):
Don't let anybody tell you thisis wrong and now you're doing
your way and you will find outlike you're doing your way and
you will find out like you'redoing right and in my case, in
my case for the audience, or inother contractors and other
painters, one of my adviceadvices is like find the right
market.
Speaker 3 (40:00):
You know the right market for your company.
Uh, don't take the jobs just totake the jobs, because that's
red numbers.
That's what I'm saying whenpeople they want cheap, or a
customer told you, or anothercontractor told you I'm going to
provide you materials andsupply, just give me the labor.
(40:22):
Don't take those jobs, becausethat's red numbers.
Speaker 2 (40:28):
Yeah sage advice well it's, it's hard to do, but uh,
you, you guys have figured thatout for sure, and kudos to you.
So I really appreciate yourtime today, guys, and for our
listeners.
We will see you next week thankyou.
Welcome to the Profitable Painter Podcast.
The mission of this podcast issimple to help you navigate the
financial and tax aspects ofstarting, running and scaling a
professional painting business,from the brushes and ladders to
the spreadsheets and balancesheets.
We've got you covered.
But before we dive in, a quickword of caution While we strive
to provide accurate andup-to-date financial and tax
(00:20):
information, nothing you hear onthis podcast should be
considered as financial advicespecifically, welcome to the
(00:51):
Profitable Painter Podcast, theshow where painting contractors
learn how to boost profits, cuttaxes and build a business that
works for them.
Speaker 2 (00:55):
I'm your host, daniel Honan, cpa and former painting
business owner, and your guideto mastering the numbers that
drive success.
So let's dive in and make yourbusiness more profitable, one
episode at a time.
I'm super excited today to betalking to Jose and Alan of
Montenegro Painting, superexcited to jump into it.
Welcome to the podcast, guys.
Speaker 3 (01:17):
Thank you.
Thank you Appreciate that.
I appreciate the opportunity,man.
Thank you.
Speaker 2 (01:21):
Absolutely no.
I'm glad to have you.
You guys have built a greatbusiness over there in idaho and
so I um, I think you will bringa lot of value to the podcast.
I'm super excited to jump intoit.
Uh, could you just, for thelisteners, could you kind of
give us a picture of what yourjourney has been in the painting
industry, like how did you getstarted and what are some major
milestones that you've had alongthe way?
Speaker 3 (01:44):
all right first.
First of all, I just want tointroduce myself.
I am Josue Montenegro, ceo ofMontenegro Painting and
Construction, and I'm Ale.
Speaker 4 (01:54):
Montenegro.
I'm the CEO of MontenegroPainting and Construction.
Speaker 3 (01:58):
So when we started, we moved from California like
five years ago, almost fiveyears and a half ago, and we
started working.
We was working for anothercompany in Idaho, like you know
employees per hour.
And one day, you know, I justtalked to my brother and I told
him bro, we need to makesomething.
You know, together we have agood communication and quality.
(02:19):
You know, we're master painters, we know the work, you know
100%.
So we decided to do our ownbusiness.
You know, we build the logo andwe find some magnets, some
signs, magnet signs, and we buyone small black Tacoma and we
start knocking doors.
You know knocking doors and bigcompanies, huge painting
(02:42):
corporations, doing cheapest,cheapest work as a contractor,
you know.
And five months later, oralmost eight months later, the
people they just don't knowabout, montenegros, you know,
and who they are, or they do agood job.
So that's how we start.
Speaker 2 (03:01):
Nice.
So it sounds like you guysmoved over from California to
Idaho, you teamed up with yourbrother, alan, and you guys just
basically started doingguerrilla marketing.
It sounds like you're doinggetting putting signs up and
then going door to door justknocking and trying to find
folks that were that need somepainting done.
Speaker 3 (03:21):
Yeah yeah, we make some business.
Car flyers, uh, door hangers.
We was walking on um stockdivisions knocking doors um if I
see construction and my brotherwe saw like construction.
We stopped by and we tried tofind the superintendents or
somebody on the project andintroduce myself and offer them
(03:45):
our services.
That's how we started.
Speaker 2 (03:49):
Okay, yeah, definitely guerrilla marketing.
That's awesome.
I mean business card flyers.
Doing networking Were most ofthe starting out in the
beginning, were most of the workthat you're getting residential
repaint, I'm assuming.
Speaker 3 (04:04):
Yes, okay, yes, it was residential On the beginning
.
Right were most of the workthat you're getting residential
repaint.
Speaker 2 (04:09):
I'm assuming yes, okay, yes on the beginning.
Speaker 3 (04:14):
Right, and that was that was back in.
Was it 2021?
Yeah, 2021, yeah, that was backin 2021 july.
Speaker 2 (04:18):
We started the business in july 2021.
Okay, so you started gettingtraction with.
Okay, so you started gettingtraction with residential
repaint.
And then where did it go fromthere?
Speaker 3 (04:27):
So in the first year we didn't do any commercial job,
just residential jobs, and wemade some good profit.
So we started investing more inour suppliers, you know, and in
our equipment too.
So we start doing some smallcommercial projects because we
(04:51):
do drywall texture, interior andexterior painting.
So then we start.
You know, the painting method,you know, is completely
different in residential thancommercial and it's a different
animal, you know.
So we start learning about it.
We have some bad experiencesand, uh, then we start after.
(05:11):
When we learn, you know, uh, westart from there, uh, going
more commercial.
Now I can tell you, you know,we do like what, 40 and 50, or
maybe 40, 60 percent residentialand 40 commercial yeah, yeah,
okay, so 60 residential, 40commercial.
Speaker 2 (05:31):
Um, in the the second year you started getting some
of those more commercial jobs,and are they?
Were they, uh, business tobusiness, or were you working
under a general contractor, orwas it a mixture of both?
Business to business?
Yeah, business to business, orwere you working under a general
contractor, or was it a mixtureof both?
Speaker 4 (05:45):
Business to business.
Speaker 3 (05:46):
Yeah, business to business.
Speaker 4 (05:48):
Yeah, they were directly to us.
Speaker 2 (05:51):
Okay, so business to business that's always usually
seems to be the better routewhen you go commercial.
Is that direct relationshipwith the business owner instead
of having to go through likeworking under a general
contractor.
How did you guys get into that?
Because that's always a bigthing where folks they're in
residential repaint and thosecommercial jobs.
(06:14):
They can be a lot bigger thanresidential in some cases and
that can be pretty attractive.
How did you get into thecommercial space?
Speaker 3 (06:24):
Can I tell you a funny history.
You know it's most it's likelucky.
You know we was really luckybecause one winter, the first
winter in Idaho, winter is kindof slow because you cannot, like
, do nothing outside, noexterior paint, just inside.
So one day I stopped by to oneproject, you know like it's a
(06:47):
huge multifamily, 210 units, andthat was already framed in the
concrete windows and everything.
And I just go directly to onesmall trailer you know the
superintendent trailer and Iknocked the door like Gorilla
Market.
What did you say?
And I knocked the door and abig guy, a huge guy, you know
(07:11):
his name is Jeff, you know Jeff.
And a big guy, he opened thedoor and he told me, hey, what's
up?
And I said, hey, man, I waslike a little bit intimidated
and I said, hey, hey man, I amJosue Montenegro.
You know we are a small business, you know, and we do good work.
We just need one shot, give methe opportunity, and he doesn't
(07:31):
care, trust me, he doesn't care.
So I give him my, I give him mybusiness card, and I just stood
around, you know, and henoticed my name and he asked me
hey, hey, yo, what's?
Your name Is Jose or jose.
And I told him it's jose.
Oh, where are you from?
I'm from honduras.
And he told me oh, my wife is,my wife is from honduras.
(07:53):
So we start talking over therelike for four or five minutes
and there, there the historycome.
He told me do you know what?
Tomorrow we have a nationalmeeting with the owners.
Can you come tomorrow?
I'm going to give you a shot.
We hired some painters fromUtah already.
They have a signed contract.
But I'm going to give you ashot, if you can, I'm going to
(08:16):
give you the opportunity to goin the meeting.
When is your time?
You have to sell your products,sell yourself, you know.
And I told him, yeah, so nextday I was there at 7 am in the
morning with my sherwin williamrep.
So we make a plan.
Uh, we uh check all the plansso I go like a hundred percent
(08:37):
like prepare, you know, to talkto those guys.
So, yeah, when there was my time, you know, uh, the owners, they
asked me like a thousandquestions, though, like a
thousand questions in less thana minute.
You know, like quick, yeah, myhands, my hands sweating and
everything.
And uh, yeah, they don't tellme nothing.
They just told me okay, goodjob, nothing.
(08:59):
So four months later I wasdriving one of my personal cars,
because we didn't have a fleetyet.
You know, I want a small redcar, a Honda Civic.
And I received a phone call inmy cell phone and hey, we're
calling from the strategicbuilders from Utah.
I just want to let you know youguys are a work on the project
(09:22):
and that's a.
That was a six hundred thousanddollars project.
Yeah, that was the first one 210unit, and I started crying on
that moment though that's a hugejob six hundred thousand
dollars yeah, one, for I wasscared and I was thinking what
I'm gonna do, you know how wegoing to do this big project.
(09:44):
And another one I was reallyexcited.
So I called my wife and I saidbabe, we made it.
You know, we made it.
And I called my brother we madeit.
Speaker 2 (09:58):
And yeah, so that's how we started.
Speaker 3 (10:02):
And that was in the second year that you got that.
Yeah, that was in the beginningof 2022, true, yeah, okay,
beginning of 2022.
So then, um, I, we starteddoing the work, so we got more
income, so we started investingmore in our fleet equipment,
employees and, uh, big, uh signs, you know signs, and we started
(10:25):
having, like, more phone calls,more phone calls, more phone
calls for commercial you know,because I have a big commercial
going on.
Speaker 2 (10:35):
That's amazing and you said you were lucky.
But it sounds like you kind ofmade your own luck because you
were going out.
You're doing door knocking notonly residential homes but also
commercial properties basically.
So it doesn't sound like you'relucky to me.
It sounds like you're justworking hard and you went out
(10:56):
and you made things happen.
Speaker 3 (10:58):
But that's amazing $600,000 project and you're just
working hard and you, you wentout and you made things happen.
But that's amazing.
Uh, six hundred thousand dollarproject and you're only eight
months in and you locked that in.
So that's sorry, and we makelike how much we're making
change orders, so that one sothat probably went probably like
point one point million.
Yeah, we make almost a millionover there.
You know we change orders like400 more and exchange orders on
(11:23):
that project.
Speaker 4 (11:25):
We have the drywall, and they had a drywall before,
so they try to take the milefrom there.
So they give us the contract atthe end for drywall too.
So we put our grows there tostart the drywall, and then
that's what we get more, youknow, income from there that's
awesome and and uh and the.
Speaker 2 (11:47):
The crazy thing is, you know you said you're you
have these big commercial jobscoming in, but at the same time
it's only 40 percent of yourtotal revenue, so you're still
doing most of your work withresidential right.
Speaker 3 (12:00):
Yeah, usually what we do, daniel, is do you know,
commercial.
They take too long to pay.
I don't know in other states,but in Idaho they take between
60 to 90 days to pay you andthey have big amounts, big
checks.
So what I do with my brotherit's, uh, we keep one crew.
(12:21):
We have 15 employees right now,so we keep one crew on
commercial residential.
So, do you know the residentialis quick money, you finish and
you get paid.
So that money is the cash flowfor us.
You know the cash flow.
We can cover payroll insurances, workers' comp suppliers, and
(12:43):
then when the big check comes,you know from commercial we can
invest or saving, you know, forpayrolls.
That's what we do.
Speaker 2 (12:52):
That's really smart.
So because of the long theterrible payment structure,
payment schedule for commercialwhere you're getting, you're
having to wait 60, 90 days toget paid and it's really hard on
cash because you have to payout your team, you have to pay
for your materials and you'rejust waiting for cash to come in
.
And to mitigate that, you keepa crew who's focused on
(13:15):
residential, who's getting thosepaid quickly because you have
those shorter term projects withresidential.
Are you also taking a depositon residential as well to help
with that further?
Speaker 3 (13:26):
Yeah, usually we take 20%, sometimes depending on how
big is the job and how big isthe amount, and sometimes 50%.
And then at the end, my brotherAlan.
He walked through around withthe owner and they have five
business day to pay us theremaining balance at the end.
Speaker 4 (13:46):
Yeah, okay.
Speaker 2 (13:49):
So 20 to 50% down for the residential side and that's
keeping the cash coming in sothat you can weather that long
period of time on the commercialside of waiting to get paid.
And it sounds like you have areally good balance too, because
most of the work you're gettingis residential and then less
than half is coming fromcommercial.
(14:10):
So you're able to manage thatcash flow, which is super
important for commercial,because I know a lot of folks
they get into trouble when theytry to do just commercial and
they don't have financing linedup and then they're just putting
money on credit cards orwhatever else and they go into a
lot of debt and they're reallytight on cash and it can be
(14:32):
really painful because you'rejust waiting to get paid.
Speaker 3 (14:35):
Yeah, honestly, in 2022, we make a big mistake.
Uh, we, we, uh, we was a workfor one project at Fred Meyer.
It's a Fred Meyer it's a bigsupermarket here in Idaho and we
make that project for one bigcompany it's a big corporation
here in Idaho 20, $225,000project.
(14:57):
So we handled that project andthat was the second year of
Montenegro's and we was excited.
You know another big oneworking nighttime, because in
supermarkets or hospitals orschools, you only work nighttime
.
You know the payroll is timeand a half, so increase your
(15:17):
cost, your labor cost, right,and uh, okay, we have a budget
from the other project, uh, fromthe apartments, and we use that
budget to cover the labor onfred mayor.
You know fred mayor store and,uh, this company, they take like
almost a year to pay us.
(15:39):
We went, yeah, we sued them andwe went in the court like on
properties, liens on thebuilding.
They don't care.
We went on court like fourtimes, you know, and they pay us
the money like small amountsand small amounts like that, and
(16:00):
we sign a contract.
We make a mistake.
We sign a contract and thecontract say you know, when the
owners pay them the full amount,they can pay us the full amount
.
So that takes like almost ayear.
On that year, in 2022, we almostwas in bankrupt.
In bankrupt, you know, we waslike kind of scared.
(16:22):
We have a really hard time topay people, uh, to pay suppliers
, you know.
And after that, in 2023, wechange.
We change the metal, you know.
Okay, now we work with, uh, theteam here in the office.
If we have a big budget, Istart looking for a big
(16:44):
commercial.
Okay, I can't fish a big oneright now because I had the
budget, you know, for any reason, you know, and if we don't have
that budget, I just keep inresidential, you know, I just
stay there yeah, okay, thatthat's really smart.
Speaker 2 (16:59):
So in 2022, you had a large project $225,000 from
this friend mayor's store andyou completed the project and
they took like a year to pay andthere was a hidden clause in
the contract that said that theydidn't have to pay you until
(17:19):
they got paid, and so that waslike a big learning experience.
It sounds like that'sdefinitely a good thing for the
listeners.
Like, if you're getting intocommercial, make sure you
understand the contract or atleast have a lawyer or somebody
who's good with contracts tolook it over for you so that you
know what you're getting into.
(17:39):
So that's a really I appreciateyou sharing that, because
that's that can be a mistakethat other folks can avoid yeah
but I really love the in 2023.
After you learn from that largeproject.
That kind of went the wrongdirection.
You changed the way you handledtaking on commercial projects.
(18:01):
You basically sounds like youyou make sure you have enough
residential booked.
Once you get to a certain levelof residential booked projects,
then you're like, okay, now wecan take on another commercial
because to make sure that yourcash flow doesn't get too
strained, is that right?
Speaker 3 (18:18):
Yes, exactly that's what we do.
Speaker 2 (18:21):
Okay.
Do you have a formula, or is ita certain amount that you're
looking to book on theresidential side before you?
What does that math look like?
Speaker 3 (18:32):
I think no less than $100,000.
You know, probably four, two,three months of payroll.
That's usually what I try tosave before to take a big one.
Yeah, okay, and I think,montenegros, we can handle one
or two big ones per year, nomore than that, because it's a
(18:53):
big risk, not commercial.
So that's why I usually take,and we usually take, like a
small clinics, chiropracticclinics, uh, starbucks, um, you
know, like a small commercialjobs like thirty thousand
dollars.
I, I take that ones, you know,like the same day I take it, but
on multi-families, uh, schoolhospitals, families, school
(19:17):
hospitals, like a big commercial, like talking about big amounts
of money.
Speaker 2 (19:25):
I just take one or two per year, and so big
projects, is that like definedas over $100,000?
Or is that like considered abig project for you?
Speaker 3 (19:36):
Yes.
Speaker 2 (19:37):
Okay.
So you kind of limit how manyprojects you take because you
want to make sure you have thecash in the bank to cover
payroll on that project beforeyou start to go do it because
you know you're not going to getpaid for 60 days, 90 days or
maybe even longer if you havethat fred meyer thing happen
again where they didn't pay youfor a year.
So I think that's really smart.
(19:58):
You're basically making sureyou have the labor covered
because you got to keep payingyour people during the
commercial jobs.
You can't put that on yourcredit card.
You got to have cash for it.
So you make sure you have thecash in the bank from your
residential before you get intoany larger commercial project.
Speaker 3 (20:15):
Yeah, people ask us you know how we make it right,
how we make it right, uh, how wemake it?
Because, uh, until 2025, wejust barely got the line of
credit on the bank formontenegro's, you know.
So we was using our own money.
Everything is montenegro'smoney, not bank money.
So right now, until this year,because we grow a lot, so, yeah,
(20:39):
we don't have any options.
So we got to the bank and then,yeah, I like the credits and
they give us a lot of credit.
You know, now we can handlemore nice, nice.
Speaker 2 (20:49):
Yeah, that's, that's great.
So now you have a little bit ofextra room with that line of
credit.
Um, I'm sure you had toprobably provide some financial
statements and all that to getapproved.
Usually the bank want to seekind of what your your profit
and loss and balance sheet andall that stuff looks like.
But you get approved for lineof credit.
So now you can have a littlebit more flexibility on on those
(21:11):
commercial projects.
Speaker 3 (21:11):
It sounds like yeah, and it's a bank, they know us.
So when we start the business,we start with that bank.
And yeah, they ask us, right,like tax, uh, tax, um, or taxes,
paper taxes, you know, liketaxes proved for three years.
So they check income, uh, theycheck the profit, the gross
(21:33):
profit, and uh, they told usokay, this is what you guys can
have right now.
Do you want to take it or not?
And they say it's a good start,then it's 2026.
We can ask them for more.
It's just a bet on how the yeargoes.
Speaker 2 (21:52):
Yeah, and lines of credit are great because you
don't have to.
You can just have thatavailable if you need it, but
you don't have to use it.
It's just there if you need it,which is great, especially for
commercial.
So you could keep doing whatyou're doing with making sure
you have the cash, but ifsomething really goes wrong, you
have that line of credit as abackup.
Speaker 3 (22:09):
Yes, yeah.
Speaker 2 (22:11):
That's right, yeah, that's super smart, okay, super
smart, okay.
So 2021, you got started, gotinto residential.
2022, got into some somecommercial, learned some lessons
about those larger commercialjobs, figured it out in 2023 to
manage your cashflow bybalancing residential and
(22:31):
commercial projects.
And, uh, and now in 2025, youhave that line of credit from
the bank.
Speaker 3 (22:47):
Along this journey, the last five years or so.
What's your revenue look likeeach year?
The first year, in 2021, westarted business in July.
So between July to December, wejust make $160,000.
Just me and my brother and mybrother-in-law so we was working
together on the field.
The second year, we made$485,000.
(23:13):
Yeah, that's 2023, right.
And the following year, we make$1.7 million in 2024.
2023, yeah, $1.7 million.
And last year, 2024, we made$2.5 million.
Wow.
Speaker 2 (23:32):
That's awesome.
That's amazing growth.
Congratulations on that.
That's pretty amazing.
Speaker 3 (23:38):
Yeah.
Speaker 2 (23:42):
Go ahead, congratulations on that.
That's, that's pretty amazing.
Yeah, go ahead.
Oh, and I was just saying like160 000 in the first six months,
um, and then now in 2024, fullfull year, in 2024, 2.5 million.
That's amazing growth.
I mean that's, that's crazy howfast you guys grew, so you, you
must have been kind of busythose, uh, those four years.
Speaker 3 (24:00):
That's a lot of work yeah, to be honest, we make a
lot of sacrifices, you know,because, uh, now we have an
instructor, uh, uh, becausewe're growing.
So you have to.
You know, like, for example, wehave our executive assistant,
we have a, a secretary, mybrother, he's the PM.
You know a CEO, he runs all thefields, and I am the business
(24:24):
guy.
You know the sales guy, theestimator, and we have our
leaders it's true, yeah, it'strue and a superintendent.
So that's because we're growing, so we don't have time talking
about time, so we make a lot ofsacrifices.
On family, you know, sometimeswe work nights, sometimes we
(24:45):
work weekends, but it's worth itthough, you know, because it
depends on your goal, yourvision.
You know where you want to go.
Yeah, we're very clear on that.
Speaker 2 (24:58):
Do you mind sharing what your vision is like?
What do you have?
What's what's the plan?
Speaker 3 (25:03):
I don't know my brother's one, but mine, in my
personal opinion, um, this yearI want to buy a land, you know,
maybe one or two acres, and um,maybe next year find a
construction lawn and, uh, buildown place, you know, like more
than a house place, like bigwarehouse, and that way we don't
(25:23):
have to rent, you know, make aparking lot or office.
That's, that's one of my goals.
Speaker 2 (25:31):
Yeah, that'd be great , that's awesome.
Speaker 4 (25:35):
Well, same, we would do the same for a company.
I just going to follow you,yeah, right.
Speaker 2 (25:40):
Yeah, that's awesome.
So at this point, which whichyou have is a alan's doing the
project management, you have oneor two sales people uh, just me
right now uh, sometimes hehelped me, but it's just me
right now okay, so you're doingthe sales right now, and then
(26:03):
you have obviously your crewsand your crew leaders, and then
you have someone in the office.
Is it one or two people in theoffice?
Speaker 3 (26:12):
Two.
So usually what I do is on theweek, five business days.
So on the week I take two daysor three just to go outside to
do estimates, contracts,networking, you know, talk to
other contractors and otherpeople relationships.
I take three and two daysinside my office doing all the
(26:37):
estimates and pass the estimatesto my executive assistant.
So in the office we always weare like three or four people
all the time, yeah, and then uh,11 or 13 on the field yeah, and
and so, alan, you're doing allthe project management for the
(26:58):
the 2.5 million or greater atthis point I'm the one who take
care of the job.
Speaker 4 (27:03):
So if the job has to be done the right way, quality
first of all.
We do quality.
I specifically myself doing aquality control and stuff like
that, you know.
So the job can pass and peoplecan still call on us.
So that's one of the reasonspeople call us, because we're
like show up on time.
So if they call us, this iswrong.
(27:24):
We always show up without likea charge, without nothing.
We just go there, try to makethe clients and people happy.
That's the first thing that weliked and people love that,
because if the customer clientsare happy, we're happy and
everybody go home and everybodyget happy.
So that's why it's a hard jobfor me, because sometimes I got
(27:45):
to deal with a lot of stuff,especially with the crews,
because I got my kids too, youknow, and it's like if I haven't
more kids, I know the place orI run with them every time
telling them do this this way.
So it's fun.
I'm still I'm learning and like, uh, years ago I used to work
at California as asuperintendent a big project, uh
(28:06):
, commercial stuff too.
So I got a little bit.
I know a lot of stuff about it,so I know how to deal with the
stuff.
So that's why that's one of thethings that make us grow up too
, because I got the how do yousay the I forget the word
experience about it.
(28:26):
So that's what we, that's whatit made.
My brother has his ownexperience and different stuff,
and I have experience in my, onthe job, on the work, so that
make us a good company, you know, like good communication, good
team.
So that's where we are rightnow.
That's why that's why we'rehere.
Speaker 2 (28:42):
So and it was so to uh doing being the production
manager on 2.5 million or more.
That's, that's a lot.
Um, so what is the scope ofyour job?
Because you know some folksdifferent painting companies.
They define their projectmanagers role a little bit
differently.
So I'm just curious like youknow, the office probably helps
(29:06):
with some of the onboarding of anew customer, like getting
colors.
Where do you actually pick upthe responsibility from?
Speaker 4 (29:15):
So I take it once my brother do the estimate and they
said, ok, this approval.
I just Elizabeth the office.
She sent me a text or theinformation of the property and
I just go walk with thesuperintendent and check it out
before we start the job and,knowing more about the customer,
(29:36):
I see, tell them who I am andfrom there I just got, I got the
job and then from there I justgive it back to the office when
it's done so they can charge,and then I walk with the person
and get the money back.
So from that call, from thattext, everything is my
responsibility.
I'm the person who has to doeverything from there.
Speaker 2 (29:57):
Okay, so basically the estimates signed, the
proposal signed and the officejust lets you know hey, we have
a new customer, and then youtake it over from there.
It sounds like.
Speaker 3 (30:09):
Yeah, usually.
So when we have an option, youknow, to approve or decline,
right on the customers.
So when they get approved, myoffice she called them or she
called the customers and theyput in contact and they start
making a contract, because onthe beginning we was working
(30:29):
without contract and a lot ofpeople they don't pay us.
You know that we get a scam alot and for big corporations too
, they steal money.
You know big, huge corporations.
So now, uh, we are different,so when it's approved we make a
contract.
When they sign the contract, uh, they can do that
(30:50):
electronically or they can stopby to your office.
So when, uh, they sign that weask them, you know, for, uh, the
percent, sometimes the depositis 30 or 50 percent what I was
telling you, um, and then wepass everything through island
and we schedule.
You know we check the schedule,which dates we have
availability to put that job on.
Speaker 2 (31:20):
And yeah, right on, ready to move forward project is
approved, like you're taking it, and then getting getting the
initial deposit, if needed, andgetting it scheduled, and then,
and then from there, alan takesit from there.
Speaker 4 (31:35):
yeah, okay, gotcha they've got a schedule for me
too, so they have our schedules.
So they make a schedule for mea day so I can walk with the
superintendent.
Speaker 2 (31:46):
So just walk and see how we're gonna do the job and
from there, yeah, and are youproducing the, the residential
side too, as well as thecommercial?
Everything okay yeah, cool that.
That, yeah, that's, that's.
That's a lot on your plate.
So, uh, it seems like are youguys gonna produce in 2025?
(32:07):
Like what's your projected?
Are you guys going to producein 2025?
Like what's your projectedrevenue?
Are you guys going to be about2.5 again, or are you going to
be able to?
Speaker 3 (32:13):
do more than that.
More than that, the goal is tostay there, or the goal is 4
million.
You know, hopefully we can hitthat amount, but we'll see man 4
million in 2025?
.
Yeah, that's the goal.
Yeah, so we're now just in themiddle of the year.
I think we're closing likealmost a million point three, a
(32:36):
million point four, so I knowmaybe three million.
Speaker 2 (32:41):
Yeah, three million.
Okay, it seems like it could be.
I could be wrong, because thereare some painting businesses
that can get away with, you know, in terms of we need to bring
on another project manager oranother salesperson to really
get past that point.
Speaker 3 (33:18):
Yeah, I think we were talking about that.
You know, we do meetings hereat the office.
We do one monthly meeting orsafety meeting as well.
So when we talk about it, Ithink we're almost on that point
, you know, we're almost on thatpoint to hire another sales guy
, another sales guy and maybeanother project manager too,
(33:42):
because it's too muchresponsibility for my brother.
Brother, it's a lot, you know.
And, um, sometimes he had todeal with clients, he had to
deal with, uh, employees, he hadto deal off with the office and
he had to deal with suppliers.
So, you know, so it's a lot.
So here we are, we're trying toget in there, uh, because it's
(34:07):
just depend the demand, know,and right now we have a big
demand.
But usually in winter it's kindof a little bit slow, you know,
because you know there's a lotof snow around.
But in summer, you know, maybefor next summer we have to do it
, because summer is our bestseason, you know it's the best.
It's starting from what?
(34:28):
april may yeah, I think betweenmay and may to october.
You know that's our biggest,biggest months you know, but
we're talking about it.
You know we have, we're talkingabout it and I know we have to
get it there.
You know another salespersonand another.
Speaker 2 (34:47):
Uh em yeah yeah, it seems, yeah, you guys are, you
guys are killing it and you'redoing, I'm sure, a ton of work.
So that's pretty impressive todo to have one salesperson, one
production manager and and dothree or four million in revenue
.
So that's kudos to you guys.
But yeah, it seems like youknow to get to the next level
(35:09):
beyond that, probably a projectmanager, another salesperson to
add to the team, and you know Iknow a lot of folks for
compensation packages.
You know folks are doing like8% for a salesperson usually.
You know, maybe, maybe pay themlike six and a half percent of
(35:30):
what they close and then you addin like the payroll burden on
top of that ends up being about8% of what they close.
Maybe mix it between base andcommission, um, and then tie
that to like, uh, customersatisfaction scores and gross
profit is common things to tiethe compensation to those, to
(35:52):
those, those metrics like Googlereviews or gross profit.
Speaker 3 (35:58):
Yeah, usually here they work by commission.
You know, in Google reviewsowners, they paid him like a
hundred bucks for each review.
You know, for the sale guyscommission.
You know, for the uh, cell guys, um, commission.
You know, whatever they close,uh, they commission, they have a
commission about it.
But we didn't hire, like uh, pmright now or um, another
(36:21):
superintendent or cell guys,because we're kind of kind of a
little bit picky right now, youknow, on hiring, because you
never know, you know whichpeople is going to show up.
And uh, we made that mistake inthe beginning.
You know, we just was hiringpeople, a lot of people, hiring
people just to show the customer.
Hey, yeah, montenegros, theyhave a big manpower, they show
(36:44):
up everywhere, you know.
But we have struggles withpayroll, we have struggles with,
uh, quality control, we havestruggles with workers come, you
know, and uh, and struggles,you know, with employees.
They just show up two, threedays and they just gone, you
know.
So now we, we didn't work likethat.
Elizabeth, she is the uh, the so, and Carla.
(37:09):
So we have an application, sothey have to fill in the
application for work, you know,and if we are hiding those
applications, they go to me andmy brother.
So we read everything and ifthey have the feed like what
we're looking for, we call them,you know, and they come to our
(37:29):
office and we have a personalinterview and if they have, we
have that vibe.
If we have that vibe and weknow, oh, that guy, you know
what he's talking about, so wegive them a shot.
You know, if doesn't, we justcall it an alignment?
Sorry, but you're not the rightfit, you know.
Speaker 2 (37:47):
Yeah.
Speaker 3 (37:48):
So that's why you know we're looking, we're
waiting for the good.
That guy is going to come.
We know he's going to come.
Speaker 2 (37:55):
Yeah, it's definitely a key role.
Yeah, project manager,salesperson, very, very
important role.
So definitely choose wisely,for sure.
Speaker 3 (38:05):
It is because, look, it's your responsibility, right?
It's your brand, it's your name, it's your company, you know,
so has to be somebody who lovesyour company, though you know
who loves, who loves what he'sdoing, because, if done, it's a
big, big risk.
You know it's red numbers, yeahyes, sir, awesome.
Speaker 2 (38:26):
Well, jose and alan, you've been super generous with
your time.
Really, you've dropped a ton ofvalue on the listeners and you
guys have built something reallyamazing over there in Idaho
Super impressed.
And was there anything thatyou'd like to close out with or
ask the audience of, or anythingelse you'd like to say about
(38:48):
growing your business to thelevel that you have to give any
final tips or anything before welet you go today?
Speaker 4 (38:58):
Just keep it positive .
That's the only thing that Ican say.
A lot of people don't trustthat brothers can make it,
because that's true.
People say when they have abusiness with your brothers or
family, they broke out.
So it's a lie.
If you're positive and you havegood communication with your
(39:20):
brother or whoever is yourpartner as a family, that's the
main thing that you have to do.
Keep good communication andgood relationship.
That's what we have as a family.
That's the main thing that youhave to do, like keep a good
communication and goodrelationship.
That's what we have.
So that's what makesMontanerros more stronger, you
know, as a family and as abusiness.
That's the only thing I can say.
Just keep it positive.
Keep your mentality like thatand don't never give up.
(39:43):
Don't let anybody tell you thisis wrong and now you're doing
your way and you will find outlike you're doing your way and
you will find out like you'redoing right and in my case, in
my case for the audience, or inother contractors and other
painters, one of my adviceadvices is like find the right
market.
Speaker 3 (40:00):
You know the right market for your company.
Uh, don't take the jobs just totake the jobs, because that's
red numbers.
That's what I'm saying whenpeople they want cheap, or a
customer told you, or anothercontractor told you I'm going to
provide you materials andsupply, just give me the labor.
(40:22):
Don't take those jobs, becausethat's red numbers.
Speaker 2 (40:28):
Yeah sage advice well it's, it's hard to do, but uh,
you, you guys have figured thatout for sure, and kudos to you.
So I really appreciate yourtime today, guys, and for our
listeners.
We will see you next week thankyou.
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