Will your Roof Business Survive?
This is a rotten time to be in construction. The recession wave a double whammy to the entire industry. First there was the mortgage meltdown and then the general recession slowed the entire economy. People that are unemployed do not buy houses. Although some parts of the building industry are almost completely shut down there is some breathing room in the roofing business.
The advantage of roofing is that just about all roofs need to be repaired and ever replaced. A good contractor can prosper by just catering to the existing home market. If the roof is made of asphalt shingles there is more of a turnaround than there was 20 years ago because the shingles are not as good as they once were.
What are the criteria of a successful contractor? There are the obvious ones of good craftsmanship and diligent service after the work. But there are also a few variables that will have an effect especially during a recession.
The most important part of survivability is sales. No Sales, No Work. It is that simple. According to the Small Business administration the number 1 reason why construction business's fail is the lack of sales.
The smarter newcomers know this and will put a lot of emphasis on sales. What usually happens is they low-ball their competitors but even though they may be working for minimum wage at least they are staying alive and also laying the groundwork for a more profitable future.
Another clue as to if a rofer survives is the type of roofing he is going to get into. Residential and commercial are different from one another and both offer challenges and rewards. Residential, especially existing residential, will always be there. The jobs are much smaller than most commercial and you will be dealing with ordinary people.
Commercial, on the other hand, may involve millions of square feet and can potentially involve a reasonable amount of capital. Commercial roofing systems can be complex and exotic. A guy that knows how to do residential roofing can bounce from one product to another but commercial systems are completely different from one another. However, if a person can specialize in a type of commercial roofing the profit potential is huge.
The final measure of a roof contractors strength is the number of estimates it gives in a year. It goes back to No Sales, No Work. If a contractor, even a new one, is giving a lot estimates his chances are greatly improved. On the other hand if a contractor, even one that has been in business for awhile, waits for the phone to ring, he may be doomed.