According to the Bureau of Labor Statistics, 80 percent of contractors never make it to their third year. And 96 percent closed after five. And 96 percent closed after five years. However, the SBA (Small Business Administration) reports that 80% of roofing contractors fail in the first 2 years.
In 5 years, 96% are completely out of business. For years, there has been a lot of debate in our industry about why roofing contractors fail. Department of Commerce: Just as 29% of businesses fail in the first year, 56% in three years, and 72% in five, you can see why it's a hot topic. Let's get to the point: the root of the problem is that there's a low barrier to entering an industry and a high barrier to success. No matter how you start, too many professionals fall into the trap of creating something they don't fully understand, only to realize that running a business involves much more than hard work and sales, and they get stuck.
For example, finance is much more than what goes in and out of a bank account. Accounts receivable and accounts payable are essential, but just as important is understanding balance sheets, cash flow, work in progress, taxes, overheads, audits, and risk management. Finance is usually and should be the first area in which we know we need help, so we think about hiring a professional to alleviate part of the burden for us, ideally in the form of a part-time or full-time accountant or public accountant. I say “ideally, but very few business owners hire a professional.
Instead, they hire a family member or friend, leading not only to trying to find out, but to having to work it out with someone who has little more experience than you. We make similar decisions in all areas of our business without realizing that there is a real sequence in which we must scale our business. Instead, we approach these aspects of our company from a reactive approach based on the best hypotheses, without a plan to follow, which generates more work and makes us feel that there are not enough hours in the day; this is the business trap that we must escape to survive and prosper. After advising contractors for several years, I realized that, despite an abundance of information about running a company, what was missing was a general plan of what to do, when and how to do it. Without this plan, decisions are made reactively and often they don't realize the specific sequence of actions that need to be taken to grow the company.
Let's say you think that the only thing standing between you and more work and income are potential customers. So, you're considering buying an established marketing software or service. It's an excellent first step, but before investing, you should take a broader view (that is, if you get more potential customers, do you have a sales process that optimizes your investment? Can that process be repeated? If you convert those leads, do you have the necessary processes in place to manage the additional volume? If you don't have solid answers to those questions, buying software or services won't solve your problems. In fact, it may only generate new ones and, once again, you're falling into the trap of putting out fires rather than preventing them from the start. These two examples highlight the importance of sequencing and planning for the operational aspect of your company. But to be truly successful, your plan must also incorporate the fundamentals of your business.
It's useful to think of your plan as the DNA of your company. Like human DNA, your company's DNA has a fundamental and operational basis. Those backbones are linked by the components of your company that work together in a specific sequence to determine the performance of your company. When making decisions for a business component, you can consult the plan to appreciate the impact that decision will have on all functions.
You can go deeper and determine if you're really ready to take action or if you need to keep working. In the same way, if problems arise, you can consult the drawing again to determine where the disconnection or the wrong sequence occurs. Creating a comprehensive plan requires work, vision, and patience, but that work pays off in a number of ways. First, it's the foundation for building a great culture that encourages team growth and performance and is led by an incredible leader (or leaders).
Second, it allows you to make solid decisions driven by a defined culture, repeatable processes and, in addition, your finances and your quantifiable values are no longer reactionary decisions that trap you. Third, it allows you to have more time to dedicate to the company, since all the questions you ask yourself mentally have now been answered in writing and can be consulted by any member of the team. What I've learned from running my business and the experiences I've shared with the thousands of contractors I've trained is that, without understanding your plan, it's easy to get stuck. If you don't recognize how the sequence of your decisions and actions affects the fundamental and operational aspects of your company, it's difficult, if not impossible, to achieve growth.
Do you already have an account? Sign in You must have JavaScript enabled to enjoy a limited number of items for the next 30 days. Join roofing professionals from across the country at the Best of Success 2025 conference, the best destination for roofing professionals looking for the latest industry perspectives and networking opportunities. Choose strategies for critical challenges such as staff shortages with innovative solutions, explore the latest advances in roofing technology and sustainable practices, and gain valuable information from industry leaders on how to address the changing roofing landscape. ServiceTitan is a comprehensive application that helps roofing companies optimize all their operations and monitor profitability from a central hub.
Since 2004, Baltic Roofing has been the trusted roofing contractor in and around Willowbrook. One of the main reasons why roofing contractors go bankrupt is the inability to provide good customer service. While it can be difficult to find an honest picture of the quality of a company's roofs (most only post the best images of their work on the Internet), still, take a close look at what's available on their website. Roofing project managers can visit work sites at random to enforce safety protocols and report those who violate them.
These new integrations provide roofing contractors with real-time supplier data on costs and instant orders to maximize work. Early detection of these signs allows roofing business owners to take corrective action to prevent the company from failing. Your roof is an essential part of your home and should be completed with the highest possible quality of service. For example, Laing Roofing soon went from having two to six trucks after switching to ServiceTitan from its old CRM.
A trusted roofing company won't do business without a bond (with a legal commitment to finish the job), being well insured against damage, and having the right license to manufacture roofs in your area. More and more roofers are using CRM tools, instant estimators and intelligent automations to differentiate themselves from the rest. Be the first to know the best tips on roofing and business, and discover more efficient ways to grow your business. Conversely, roofing contractors who stay beyond the five-year threshold also achieve their longevity for good reason: they do a great job and serve their customers well.
