Why Roofing Companies Fail

As a homeowner, you need a roofing company you can rely on, one that will be around in 10 or 20 years to service your existing roof and replace it when that time comes. But it can be difficult to find roofing companies that still exist for long-term relationships. This is because the roofing industry can prove difficult for these business owners. Below, we look at why these companies fail.

Inadequate Business Experience or Knowledge

 When roofers decide to start their own contracting company, few have real-world business experience beyond their job duties. Many get lost when it comes to sales, marketing, installation, contracting, purchasing or general accounting. When they try to figure out the business side of roofing as they deal with their first clients, they can easily set themselves up to fail.

Lack of Planning

 As with any business, roofing contracting requires sufficient planning. Roofers starting their own business need a solid business strategy. But few take the time to write a business plan. More often, they shoot from the hip and fall into the fatal practice of trying to do too many things without adequate help.

Poor Accounting Skills

 Adjacent to the need for a solid business strategy is the need to understand business accounting. Many roofers branching out on their own know little about profit and loss statements or other business accounting principles. By the time they realize their business is too far in debt or not bringing in enough profit to sustain itself, it is generally too late. Even roofers with a high volume of client business can fail by not knowing their costs or how to price their services.

Growing Too Quickly

 Many businesses fail through too much ambition, too fast. Volume does not equal profit when it comes to successfully daily operations. Profit is the most important factor, one taken away by growing too fast, hiring too many people too early and not developing the business infrastructure for calculated growth.

Inadequate Funding

 Bills quickly follow sales. To a roofing company owner, this means that simply creating a high volume of jobs will not fund the company as hoped. They must pay subcontractors, salespeople, office administrators and other key people. This creates problems with buying needed supplies, closing jobs and otherwise moving forward.

Poor Time Management

 Not knowing how long it takes to find a prospective customer, close the deal, start the job and receive payment after completion can also kill roofing companies. For a business owner, this full sales cycle is the time when their first money is spent until it comes back with profit. In the roofing industry, this cash conversion cycle is lengthy and can starve companies right out of operations.

Poor Sales Strategy

 Roofers typically need to know how to build a beautiful roof when they work for someone else. When they branch out on their own, thinking their skilled expertise will bring the business in, they quickly find out roofing is not enough. Anyone who owns a business must also know how to bring new customers in and complete sales. Without sales structure, enough business does not come in on a consistent basis to sustain the company.

Poor Leadership and Vision

 A good leader is one who knows what they know and what they do not know. They must be unafraid to call in other experts to fulfill the right roles at the right times. Too much ego can get in the way of anyone who starts a new company. That can also drive new roofing companies right into the ground.