Crowded Space
Competition is high when it comes to your paint manufacturing business, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.
Motivation of employees
If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
Longer Sales Process
A paint manufacturing business can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.
Low margins
The gross margins for your paint manufacturing business are typically around 30%, which can make it more challenging to incur new expenses and maintain profitability.
High employee turnover
In the paint manufacturing business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.
Work can be inconsistent
As a paint manufacturing business, the amount of work assigned to you and schedule tends to be more inconsistent, which may make your income less stable. It's important to set boundaries and budget accordingly based on the amount of work you plan to have.
Lack of benefits
With a paint manufacturing business, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.
Isolation
Often times, as a paint manufacturing business, you typically work alone and do not have much face-to-face interaction with other team members.
Taxes
As a paint manufacturing business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
Stressful work
This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.
High overhead expenses
With starting a paint manufacturing business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.
You may need to charge sales tax
If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article
Strict regulations
With any paint manufacturing business, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur.
Complex development process.
The development process for a paint manufacturing business can be quite complex, which may cause delays and challenges when launching and growing your product.
Complex maintenance
Your paint manufacturing business will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times.
Be prepared to get out of your comfort zone!
Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!
You might struggle financially (at first)!
If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.
Explore more:More of a challenge to run your business from home!
Running your business from the comfort of your own home is a big appeal for many entrepreneurs. With a paint manufacturing business, you are more likely to run your business out of your office or storefront space.
Minimal physical activity
A big part of starting a paint manufacturing business is sitting at a desk for the majority of the day starting at your computer. Some may enjoy this, but others may struggle with sitting for the majority of your day without much physical activity.
Work is not always glamorous
With starting a paint manufacturing business, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.
Learning Curve
When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.
The job can be demanding
This is one of the major disadvantages starting a paint manufacturing business. It's important to understand that you may need to make yourself available on a 24/7 basis.
You may need to relocate
There can be a lot of opportunities that come your way when starting a paint manufacturing business. Although moving around can be fun and exciting, it can also be physically and emotionally taxing for you and loved ones.
High liability
Running a paint manufacturing business involves a lot of liability, which means the cost for insurance premiums may also be high.
Equipment Breakdowns
Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.
Answering Phones
The paint manufacturing business is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.
The job can be dangerous
Your paint manufacturing business can have its dangerous moments, which puts you and your employees at risk. It's important to consider all liability and put processes and procedures in place that will prepare you and your team.
Takes time to see results & make money
Results and revenue do not come overnight with a paint manufacturing business. Often times, it takes weeks, months or even years for your work to monetize.
Technical issues can be frustrating
Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.
More challenging to earn passive income
It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.
Architectural Coatings are used to preserve, protect, and beautify the interior and exterior surfaces of residential, commercial, institutional buildings — including hospitals and healthcare facilities — and industrial buildings and factories. About half are applied by “Do-It-Yourself” consumers, who recognize that paint, as a home decorating product in a class of its own, transforms a living space for a small investment. Consumer paints, primers, stains, varnishes, clears, and lacquers (formulated for no more than light-duty use) make up this category, with an array of gloss levels. Architectural coatings, as both the largest sector and segment of the paint industry, comprises more than half of the total volume of coatings produced annually in the United States. In 2020, the industry shipped more than $13.6 billion of architectural coatings.6
Notably, the industry has made huge environmental strides in this market segment: it is estimated that approximately 90 percent of all architectural coatings are now water-based, the remainder of which are considered solvent-based.7 These environmentally conscious paint formulations also address customer demand for paints and coatings that are easier to apply.
Industrial Coatings applied in factory settings — providing functional properties that are crucial to the performance and durability of a wide assortment of industrial, transportation, and durable consumer products — are known as industrial original equipment manufacturer or OEM Coatings. They include finishes for medical equipment; food service products like cans, jars, and packaging; automobiles, buses, and transportation equipment; appliances; wood and non-wood furniture; metal building products; metal container and closure finishes; paper, and much more.
From this non-exhaustive list, it’s apparent that a host of independent and diverse industries depend on coatings, especially OEM coatings, for their production. In 2020, $7.7 billion of industrial OEM coatings were sold to maintain the appearance, functionality, and longevity of newly manufactured goods.8
Finally, Special Purpose Coatings cover an array of divergent coatings that serve a specific purpose. The one unifying characteristic is that these coatings tend to be “field-applied,” as opposed to being applied in a factory setting. This industry segment includes marine paints; high performance maintenance coatings; military-specified coatings that create a hardening effect for blast mitigation in buildings, including embassies and defense installations; automotive refinish paints; traffic and highway markings; roof coatings and multicolor paints and metallic paints. Notably, specialty coatings like marine coatings used on Navy ships are designed to serve multiple purposes. They are anti-corrosive to maintain the integrity of ships’ surfaces. They are also anti-fouling, to keep living organisms from building up on ships, which could adversely affect critical performance characteristics, like speed. In 2020, industry shipped $5.3 billion of special purpose coatings.9
While special purpose coatings represent the smallest of the three major classifications of coatings, they play an especially valuable role in upgrading the nation’s infrastructure. In fact, protective coatings, which historically rank as the second largest sub-segment of the special purpose category (automotive refinish paint has historically ranked as the largest sub-segment), will play a major role in any federal investment to rebuild and upgrade U.S. infrastructure, along with another special purpose coating subcategory — traffic marking paint — used on roadways, parking lots and airport surfaces.
Put simply, every manufacturing process that results in the production of a non-liquid product includes a process for coating the finished good, making the coatings industry an integral part of and partner to the larger manufacturing industry and national economy.
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