PaintSmiths of Missouri, Inc. is a family-owned, commercial painting contractor based in St. Louis. Established in 1963, the company is now in its second generation of leadership with Michael Smith as President.

According to Smith, business was good, but he knew it wasn’t as good as it could be. The company fought financially for cash flow even though they had an existing line of credit, which his bank had converted to a fixed loan. In addition, the books weren’t being properly maintained, so Smith had a hard time generating financial statements to make informed decisions.

He first considered joining a peer board in 2014 to bounce ideas off of other small business owners. Instead, he hired an out of town consulting firm to assess his business. “They were here for two months, and I liked what they did,” Smith said. But they were very expensive. He paid the consultants’ travel and lodging, plus a six-figure consulting fee. “They came in, gave me a shot in the arm and then disappeared.”

Hiring a Business Coach

In 2015, Cornell Meyer, president of The Alexander Group was introduced to Michael for the first time. As a prospective client, Smith was invited to sit in on a peer board to see if working with The Alexander Group was something he would be interested in. It was evident to Meyer that Smith had absolutely no time to work on the business by putting new processes and systems in place. And, it was also unmistakable that Smith wanted to improve his business.

“I committed to going to one peer board meeting, and I was intrigued by Cornell’s process. I was hesitant, but I was also interested in what he had to offer. I signed on with The Alexander Group after my first board meeting,” Smith said.

The Alexander Group and the peer board emphasize the importance of month-to-month accountability. Every month, business owners who attend the morning meetings make pledges to do one thing to help their business succeed. Every member of the peer board is accountable to themselves, as well as to Meyer and the other members of the board.

You Don’t Know What You Don’t Know

As the owner of a small family-owned company, Smith says he felt like he was in a cocoon and not exposed to many outside business strategies and ideas. “You don’t know what you don’t know is an expression I use because it’s true for me. Cornell made me aware of things that, as a business owner, I didn’t know that I should know.”

Over the course of the first year, Cornell and Michael took a deep dive into PaintSmiths financials. Cornell discovered the cash flow problems PaintSmiths was experiencing were symptomatic of a larger problem. The real disease was that Smith’s accounting advisor was not giving him the best advice on how to keep his books and records.

Meyer explains that, when they first sign on with The Alexander Group, about 75% of his clients have problems with their financial statements. This situation prevents business owners who are having cash flow problems from presenting accurate financial statements to a bank to demonstrate that they are a safe bet for a line of credit to help boost cash flow.

As part of the repair process, The Alexander Group helped PaintSmiths establish a new banking relationship. Smith was reluctant to change banks because they’d helped out several times when things were financially tough, plus it’s the bank his dad used. He said, “Cornell told me, ‘It’s all business. You need to look at what’s best for you. So, I made the switch.”

The new bank took over the balance of their fixed loan and also gave the company a sizable credit line on top of it because, after working with The Alexander Group, their financials had improved so much that the bank was comfortable with the company’s level of risk. In addition to working with a new bank, PaintSmiths changed CPAs and Cornell helped Michael find an in-house controller to manage the books.

The Numbers Don’t Lie

“Since 2015, my cash flow has been outstanding,” Smith said. “I don’t know whether to attribute that to timing, the economy, or my relationship with The Alexander Group, but I cannot express how pleased and how stress-free it is to have a comfortable cash flow.”

Since he’s been working with The Alexander Group, Smith can now focus more on what he’s good at, and what he likes to do, which is creating more business relationships, acquiring more contracts and getting out on the job site to work with his customers and painters.

“We have the correct independent advisor in place. We have a controller in place. Billings are getting out on time. All of the work is getting billed for, which was something that was not occurring previously,” Cornell said, “And, as a result Michael has had two record years in a row.”

The business went from $3.5 million in 2015 to almost $5 million in two years’ time just by freeing up the leader of the company from the financial side of the business and having the proper people and processes in place. Michael Smith says his peer board meetings and monthly coaching sessions with Cornell keep him accountable to himself and his business. The future is very bright indeed for PaintSmiths of Missouri.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.