The roofing industry is highly profitable and is forecasted to grow substantially in the next few years. While popular, running one requires experience and heavy financial aid.
If you’re interested in learning more about successfully building and maintaining a roofing business, keep reading. You’ll discover some essential tips to consider.
5 Major Roofing Business Costs
1- Registration Fees
One of the first investments you will make when running a roofing business is a registration fee. This allows you to legally run your company. Once you get it, you’ll be able to repair and remove material related to roofing.
In most cases, you’ll need to prove your knowledge by passing a trade exam. Your state might also require that you send over certain financial documents for them to review.
2- Insurance
You’ll also need to look into roofing insurance. While it might seem unnecessary, it’s very valuable. While it’s usually legally required if you want to run your business, it also safeguards you and your employees should something happen.
Roofing insurance covers four areas:
- General liability
- Contractors’ errors and omissions
- Commercial auto and property
- Tools and equipment
If you want to get your finances in order first before investing in insurance, don’t worry. You can apply for an online quote which will give you an estimate of roofing insurance costs. This way, you can ensure that you have enough set aside for it when you register for a Certificate of Insurance (COI).
3- Employee Wages
Another considerable cost you’ll need to prepare for is worker wages. The price will range depending on the workers’ experience and your profits, but in most cases, you’ll be looking at paying anywhere from $20-$40 per hour. You’ll also need to work in overtime fees.
4- General Equipment
For every roofing job, you’ll rely on a handful of tools. These include hammers, ladders, and utility knives. You might also want to set up a small fund to pay for new equipment if needed.
It might be tempting to purchase the cheapest tools available, but this isn’t always the best decision. Inexpensive tools aren’t always durable and could cause roof damage. So while it might be a hefty investment, buying high-quality tools will be worthwhile.
Besides working materials, you’ll also need to consider personal protective equipment (PPE), like helmets, steel-toed boots, harnesses, and safety glasses.
5- Job Materials
Apart from the tools you will use on almost every job, you’ll also need to determine specific job costs. For instance, one client might request you re-roof a large building with expensive slate shingles. This will cost much more than someone who requests simple asphalt shingles for a smaller area.
Also, consider the roof’s slope, tear-off, and levels. You’ll need to figure out how much to order and if you currently have the right equipment to do this specific job. If you’re wrong in your estimate, you might over or undercharge customers – both of which can be a problem.
3 Tips for Maintaining a Roofing Business
1- Stay Organized
As your business starts gaining more attention, you’ll need to ensure that essential documents stay in place. Otherwise, you might miss vital deadlines or job requirements.
If you prefer not to hire an accountant to do this for you, follow through with the organization yourself. It might be a pain at first, but as you continue it, you’ll find the process will be much easier to do and something you’ll be glad you did when you need to find a particular document for a client or tax purposes.
2- Watch Your Finances
Always keep an eye on your finances. Unfortunately, many businesses don’t always monitor them carefully, leading to severe issues.
If you notice you’re making a smaller income, go slow. Set aside funds for critical areas and cut back on things that might not be as essential, like ads.
Make sure to also not overspend on equipment. For example, if you only need two ladders, don’t buy multiple ones just for the sake of having them.
To keep your budget in order, brainstorm a general estimate of how much your operational costs will be and then add slightly more to it.
3- Hire Well
Many roofing businesses make the mistake of hiring anyone who shows up to work. While many of these people do a good job, some don’t fit well into this field. Hiring an employee like this can eventually be a substantial financial strain.
If you notice an employee not following your instructions or making serious mistakes, it’s probably in your best interest to fire them.
While this won’t be pleasant, it protects you in the long run from potential lawsuits should there be damages. It can also give you peace of mind knowing that you’re building a solid team you can trust.
Running a roofing business can be a hefty investment. However, by keeping the tips above in mind, you can set yourself up for success.
