Are roofing companies profitable?

The roofing contractor industry in Florida has grown over the past five years. According to NRCA, the average profit of a roofing contractor is 2.8 percent. If you consider how much personal money owners have invested in their business and the risks they take, the return on investment seems minimal. That's when reality sets in and you realize that 2.8 percent is an average.

Half of all roofing companies earn less than that. To make sure your company is in the top half of the numbers, follow these financial tips. Remember, as the adage goes: “You can't manage what you can't measure. After 41 years of consulting for contractors and also having several roofing contractors under contract, I think I can speak to some authority about the profitability of roofing contractors.

In fact, more than a third of the roofing contractors we have hired earn more than 500,000 a year in profits. And by the way, many of these contractors, starting with us, had less than 500 thousand in sales and 50 thousand in profits. They are all local family businesses that we have constantly worked with and helped to develop long-term business objectives. In a service-based industry such as roofing, profits may vary from year to year.

From weather phenomena to excessive material orders, the profits of a roofing company often depend heavily on the planning and execution of initiatives by owners and senior management. Identifying new opportunities to grow your roofing company often depends on new ideas, so AccuLynx has 6 simple adjustments to your business model that you may not be testing and that can help you increase the profit margin of your roofing business next season. For readers, their main concern is the profitability of residential roofing contractors. But it's never that simple.

Each contractor is different in the way they exist as a legal entity; how much is paid to the owner as compensation; and how the company is organized or structured. All of these questions have a major impact on a residential roofing contractor's ability to generate a net profit of more than 14% annually. For those readers who are homeowners and wonder how much their local roofer earns with their roof, they may believe that 14% is excessive. The simple truth is that it is NOT.

Earning 14% compared to contractor risk for callbacks, leak damage, and workplace injuries is acceptable. Given the nature of what it entails and the risks, 14% is really low. One way to increase the profit margin of your roofing business is to make sure you don't undervalue your professional services and charge the right amount for your work. If you're not completely familiar with how the industry works, it's important to know some key factors before starting a roofing business.

I can't talk about commercial, but on residential roofs, you should be able to average 30-35% of gross profit (profit is defined as the difference between the total dollar amount of labor minus labor and materials) quite easily. As stated earlier, the average profit is 2.8 percent, but dropping 5 percent is good and 8 percent is great in the roofing industry. In doing so, they had more time to notice problems with their roofs and sought the help of contractors, the study authors wrote. Residential roofs in Lubbock, Texas, where they have tons of hail, are significantly different than residential roofs in Scranton, Pennsylvania, where they are more likely to be damaged by water.

Depending on the design of the roof, the total cost and the prevailing weather conditions in the area, the material you use will be different. When the general contractor (GC) wants the roof of a structure, there is pressure to do so, since it is part of the critical path. I've spent the past two years writing a book, Start It, Build It, Grow It, and developing an educational platform, The Roofing Academy, to help contractors of any size and shape overcome all these challenges and much more. If you are already looking for roof restoration businesses for sale, it is important to consider the main climatic elements that can affect the roof of a structure.

Do not assume that your customer understands these components and how to achieve a cost benefit accurately over the life of the roof. Typically, roofers use modified tar, gravel, modified bitumen, polyurethane foam that is sprayed onto the roof or single-layer coatings. If water manages to make its way through the layers of a commercial roof, the whole thing must be evaluated. If there is a failure in your process that has prevented a customer from consulting your company again, proactive roofers will take steps to identify and fix it as soon as possible so that you can prevent your business from losing further profits in the future.

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Kenneth Sowden
Kenneth Sowden

Professional Handyman turned Roofer. Avid internet practitioner. I have gelled my love for roofing and the internet and started this blog to help other around the world.

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