There are many resources on the internet on how to start a roofing company, but very few are from actual roofing contractors.  Just on the first page of Google:  

Seriously? What does a bunch of shingle suppliers, 3rd party information companies, and marketing agencies know about starting a roofing company?  I’ll tell you the answer:  THEY DON’T. 

They have never put everything on the line to start a business that has a high failure rate like roofing, never quit their job to go nail shingles and hope they get paid for their hard work or risked it all on a dream to scale a business to change the course of their family’s future.  But you are and you shouldn’t be learning from someone who has never done it before.

My name is Zach Blenkinsopp, AKA Zach the Roofing Maniac, and I am the President of Digital Roofing Innovations.  I am a US Navy Veteran, Licensed General Contractor and Roofing Contractor, and have my Bachelor’s Degree in Business from Excelsior College in New York.

I am also your instructor and personally writing this article to help YOU successfully start a roofing company.  Of course, I can’t teach you everything you need to know in just one article, but I am going to give you the framework to go by as you go start your journey of starting your business.  I will also give you some tips and tricks as we go along.  If you need more assistance and more training, we do have a course available called “How to Start a Roofing Company:  How to Work Less, with Less Stress, and Make More Money”.  It’s available on Teachable (the link is here) or you can subscribe to our Member section on YouTube (the link is here).  The course is over 40 videos and goes through each detail of the process.  You’ll also get a great FREE gift, my personal email address to ask me questions about your business, anytime!  By taking our course, we are going to save you thousands on overhead by giving you our tips that allows us to keep our monthly overhead less than $2,000 a month while running a multimillion-dollar construction company. 

Lastly, before we get started, I am going to teach you how to start your roofing company with two things in mind:  How to keep a low overhead and how to maximize profits.  By doing so, you are going to gain more of life’s most precious commodity:  TIME.  The most overused factor when evaluating a small business is revenue yet this is a number most often talked about.  I don’t care about how much revenue a company brings in, let’s talk about profit and how much time you had to work.  That’s also where overhead comes into play.  If I work 1,500 hours in a year and my company generates $2,000,000 in revenue with $300,000 in profit and you work 3,000 hours in a year and your company generates $3,000,000 in revenue with $350,000 in profit, who made more money?  My company did.  Why?  Because I made $200 an hour while you only made $117 an hour.  I am going to teach you how to work smarter and harder, not just harder. 

Over the last 5 years my business partner and I have been able to travel the world, live in foreign countries, set two world records, thru hike the Appalachian Trail (163 days), and generate over $1,000,000 in profits all while starting our company.  The information I am giving you below is how we achieved that. 

Starting Your Roofing Company

Picking a Name

– Picking a name for your company is very important, but not for the reason you think it is.  Obviously picking a good name is great for your immediate and future marketing, but did you know that your name could save you thousands per year?  My advice, do not put roofing in your name.  If you want to be John Smith Roofing, instead be John Smith Construction, John Smith Solutions, John Smith Building Company, etc.  If you have ‘roofing’ in your name, when you apply for your General Liability and Worker’s Comp, they are going to give you the highest rates in the industry because residential roofing is the most dangerous job in construction.  Also check with a lawyer to see if there are any trademark or copyright restrictions with the name.  Finally, go to www.godaddy.com to see what domains are available for your future website. 

Should you start an LLC, S-Corp, Partnership, or Sole Proprietorship?  This is going to be totally up to you and really depends on a few factors.  If you have partners, investors, where your firm is located, etc. are all going to matter with what type of business you set up.  For this decision, I highly recommend talking to a lawyer and an accountant to see what type of business you set up.  This will take a little bit of time and will cost you some money but please, please, please do not do this yourself on LegalZoom!  Also, do not just go as a sole proprietor because you’re going to leave yourself wide open to lose everything if something sideways happens.  

EIN and Bank Account – Well obviously, if you’re going to be starting a company, you need a business bank account, right?   Correct!  The problem is you can’t just waltz into a bank and get one without something called an EIN.  What is an EIN?  Well, an EIN is an Employer Identification Number, basically a Social Security Number for your business.  Please DO NOT pay a company to do this for you.  Either you can do it yourself on the IRS.gov website or have your lawyer do it for you when he or she is drawing up your new business documents.  One of the lessons you must learn as a business owner is this: Everyone is coming after the money you generate, and you must protect it at all cost.  After all, that’s your hard work and sacrifice they’re trying to get and they will try, trust me.
  

Licenses, Permits, and Registrations – In some states, you literally can just start a roofing company almost overnight because there aren’t many laws and regulations.  This isn’t the case in most states though.  Roofing and construction licenses are governed on the state level so in what state you’re starting your company is vitally important because that determines what all you’re going to have to do prior to even making your first sale.  Check with the state licensing board(s) you plan on operating in to see the requirements.  Permits and business registrations are typically held on the county and municipal level. Make sure you are contacting the local building departments for each city and county you are doing projects to ensure you are getting permits before starting work. If you want to roll the dice and do projects without any of this, you’re risking getting a big fine and getting your project shut down.  I helpful tip is to see if you can talk to a local competitor and see what they normally do.

Building Your Professional Team

Digital Roofing Innovations Team

General Liability Insurance and Worker’s Comp – This is a tough subject to try to cover in just one article, but I will keep it short and sweet.  Every company needs general liability insurance (GL), while only some companies need worker’s compensation (WC).  GL is basically your safety net if anything happens on a jobsite.  For example, if someone falls and gets hurt, a shingle is thrown off a roof and hits someone, etc.  That will be covered by your GL policy.  I highly recommend getting quotes from several different construction insurance carriers so you know you’re getting the best deal.  It’s too long and complicated to write in this article but in our training course, I go over two strategies that will likely save you thousands when you first set up your GL.  Once you find the right insurance company, make them feel like they are a part of your team. 

As for WC, there are a lot of grey areas and in my opinion, WC is nothing more than a scam.  We were fined over $30,000 in our first year in business because of how our WC was set up.  I will say this, if you decide not to have your own WC policy and file for an “Owner’s Exemption” (which is totally legal in most states) make damn sure ALL of your subcontractors have their WC policies active.  If ANY of them have a lapse in coverage, you will be paying 30 to 40 cents on the dollar (30% – 40%) of every single invoice you paid them.  For example, if you sub didn’t have coverage and you paid them out $200,000 for the year, the WC people are going to charge you $60,000 – $80,000 for the invoices you paid because they weren’t covered, even if you are exempt.  

Lawyer (Attorney) – Finding a good Lawyer is very important when you first start your company.  Just so you know, lawyer and attorney are interchangeable terms.  I am NOT suggesting putting a lawyer on a monthly retainer, but I am suggesting you set meetings with at least three different law firms and interview them for the needs of your company.  Let them know what type of work you plan on doing and where you plan on doing it.  Most law firms will set up a free consultation and many will provide free advice to where you are possibly exposed currently and in the future.  Use that free information to your advantage and try to apply that knowledge to your business process.  Try to find a friend who already owns a roofing company and see if they have a contract that has already been approved by a lawyer.  Copy it and use your own logo, letterhead, etc. If you want to double check, pay a lawyer to look over the contract to see if there are any holes in it.  This is VERY important because your contract with your customers is going to be the document most important if you get into a lawsuit.  

Accountant and Bookkeeper – You will absolutely need a CPA to start a roofing company.  You’re going to be generating too much revenue to simply rely on H&R Block or Turbo Tax to keep up with your business taxes.  A CPA can help you with tax strategy, setting up retirement accounts, etc. I recommend interviewing at least three accounting firms and do EXACTLY what you did with the lawyers.  You’re the one doing the interview. 

As for bookkeeping, I recommend trying to do this in-house as long as possible.  I would not hire an employee in the USA just to do bookkeeping (If you do, please look into hiring a VA from overseas).  Bookkeeping is simply labeling and organizing your expenses and deposits for tax preparation before tax season and also is the data that is used to produce reports such as Profit and Loss Statement, Balance Sheet, etc. 

Material Suppliers – There are many, many options for your roofing material supplier, but I recommend finding one local and one national supplier to build a relationship with.  Follow the same strategy I have listed above and interview 3 or more of each.  I know this sounds like a lot of time, but I assure you, getting this right the first time is vitally important.  Personally, I use a gentleman named Brinson Smith with Beacon out of Savannah, GA and he is my first call for any project I do.  My company wouldn’t be in the position we are in without his help.  One important factor with your material supplier is to ask them how to get a 60–90-day line of credit (LOC).  This won’t happen overnight, but you NEED to be working towards that to improve your cash flow situation. 

Finding Roofers and Subcontractors

Deciding to Hire In-House Roofers or Roofing Subcontractors – Do you know the difference between a W-2 and a 1099 employee?  If you don’t, stop reading and watch this video: W-2 vs. 1099.  Ok, now you know the difference on how to pay.  I personally, STRONGLY recommend you finding a roofing subcontracting crew to use for your roofing projects. A Latino crew if possible!  Hiring in-house W-2 roofers is a thing of the past and it’s going to make it nearly impossible for you to compete in price with other roofing contractors.  

How to Find Subcontractors – Finding subcontractors to do work for you isn’t impossible if you don’t know any, but there is a method on where to find them.  Go to Lowe’s or Home Depot and look for guys carrying around shingles, go to roofing Facebook groups, and check with your local roofing building supply company.  All three of these ways is an easy way to find roofing subcontracting crews.  If this doesn’t work, just drive around neighborhoods and eventually, you’ll find some.

How to Pay Your Subs – One of the biggest mistakes roofing companies make is not paying their roofing subcontractors on time and to the agreed amount price.  It’s important to get a signed subcontractor agreement prior to every project detailing exactly how much money is going to be exchanged.  This will keep your subcontractors happy, and you’ll always have labor to do your projects. 

Sales

Residential or Commercial – When you’re deciding whether you want to do residential roofing or commercial roofing or both, you need to decide what lifestyle you want to live as well.  I go over this at the very end of this article under the “perfect client” section.  IF you have no experience in roofing or have a very small budget, there is nothing wrong with doing residential for a couple of years before you try to take a bite in commercial roofing.  Residential is typically smaller projects and if you make a mistake, it’s not going to bankrupt your company, but the pay isn’t really great.  You have to work pretty hard for only a decent return, but you also get paid pretty quickly.   Doing commercial work is just the opposite.  Here’s a chart to summarize what I am talking about. 

As you can see, it SEEMS like residential is the way to go but in reality, once you have a good deal of capital in your business or a large Line of Credit (LOC), commercial will provide you will more time off, less time “hustling”, and a much larger payout. This is the method we recommend if you are wanting to follow our Work Less, with Less Stress, and Make More Money philosophy.  I’ll end with this:  If you really want to do residential roofing and scale it, go for it but you REALLY have to love it to ever make really good money and have a relaxed lifestyle.  Most roofing contractors I know that do heavy residential are stressed to the max 90% of the time no matter how much money they make.
 

Doorknocking – Talk to any residential roofing contractor and they have done doorknocking in the past.  It’s almost a badge of honor for most of us in the roofing industry!  Doorknocking, particularly in an area that has recently been hit by a hailstorm or major windstorm, is the #1 method to keep low overhead.  The only thing you’re really spending is your time.  With that said, unless you are new to the business and just trying to learn, I recommend putting most of your effort into the long-term success of your company and find ways to generate good profits with the least amount of work you personally have to do.  Knocking on doors isn’t the road to get you to living on the beach in Mexico while earning six figures or having time to coach your son’s baseball team.  However, if you do it, only knock between 5pm-7:30 pm during the week and on Saturday and Sunday.  Don’t waste your time knocking during the day when no one is at home.  

Business Cards, Yard Signs, and Company Shirts – Remember, low overhead BUT spending just a little more on nice business cards, yard signs, and company shirts WILL make a difference.  Be edgy, be bold when it comes to these items.  I recommend using VistaPrint or talk to your supplier to see if there’s a shingle manufacturer you can partner with that will give you this stuff for FREE. 

Digital Marketing vs. Traditional Marketing – This can be a very long, long conversation and I do go into detail in our course, but in a nutshell, Digital Marketing is marketing done using the internet while traditional marketing is everything not using the internet i.e., TV, Radio, Billboards, etc. I strongly recommend putting all your marketing budget at the beginning towards your website, SEO, social media, and online paid advertising before ever thinking about traditional marketing. 

Social Media, Domain Name, and Website – This is the first thing you should start working on with your marketing plan.  You can either set up all your social media yourself (Facebook, Instagram, TikTok, etc.) or I would recommend getting on fiverr.com to find an inexpensive freelancer.  When it comes to your domain name and website, I strongly recommend hiring a professional.  This is a company I recommend here, but whatever you do, hire a professional that has past performance helping other people in your industry.  Typically, when it comes to marketing, you get what you pay for.  

Logo, SEO, PPC, Email Marketing, etc. – For your logo, don’t pay more than $100.  This can be done again at fiverr.com and this is where I’ve had all my logos made in the past.  For Search Engine Optimization (SEO), Pay-Per-Click (PPC), and Email Marketing, I also suggest hiring a professional like this company here for this service.  The company that sets up your website normally will offer these kinds of services in a package deal or a la carte.  Remember, SEO takes time and not something you’re going to get results with overnight.  Be PATIENT! 

Angie’s List, Home Advisor, etc. – I am not going to go into detail about this for legal reasons, but if you feel that any of the lead services is a good idea for your business, go for it.  I will suggest that if you put more money, time, and energy into your own marketing, over time you will see greater results. 

Common Scams to Watch – Welcome to Business Ownership where scammers come to try to skim off your hard-earned money.  Here are some common scams to stay away from:  If you get a call from “Google” to “Claim Your Google Listing”, hang up and block the number because it’s a scam.  If someone calls you and immediately asks if you want to be on the first page of Google, it’s a scam. If you get a text message asking you if you do residential roofing, 99% of the time it’s a scam.  If you get a phone call about working capital for your business, it’s a scam. 

Office Staff and Sales Team

Recruiting and Hiring a Staff – As your business grows and you start bringing in new people, you need to be able to effectively recruit good talent.  One of the most successful tools that we have used in the past is using Zip Recruiter and Indeed.  The paid tools are FAR better than the free tools and I assure you this, hiring the wrong people when you first start your company will cost you more than any other expense.  This is something you absolutely must get right!  Stick to the old adage “Hire Slow, Fire Fast”.  Make sure you do a minimum of three interviews before you hire anyone.  I have some really good stories in our course on why this is a must and when we didn’t, it cost us thousands of dollars.  

Office, Office Manager, and Administrative Assistant – In my personal opinion, if you’re an owner AND a good salesman, your first hire should be an office manage or at the very minimum an administrative assistant to help you as you grow.  They will be able to help you manage your CRM, phone calls, do your bookkeeping, etc.  If you are better at the administrative stuff yourself and weak at sales, perhaps a salesman should be your first hire and you assist more on the admin side.  As you grow, you will want to build your team where your office manager acts as the point guard and the administrative assistants support them.  My last piece of advice is this, wait as long as you possibly can to get an office.  Then when you do, get the cheapest, best option.  Your office very rarely is going to make a sale for you so pour your money into the things that do.  If you REALLY want to cut down on cost, we teach you how to find virtual assistants instead of hiring local people in our course and will save you about 75%-90% in costs.  

Hiring a Sales Team – When hiring a sales team, you have a few options of recruiting employees and how to pay them.  Either you hire W-2 Employees and pay them a salary plus commission OR 1099 Contractors and pay them a split on the profits.  I recommend hiring 1099 Contractors unless you have a lot of capital to start your company.  Remember, hiring full time employees with salary, insurance, benefits, etc. is super expensive especially when you add payroll tax and worker’s comp to the total. Make sure if they are a 1099, they have their own GL and WC policies or you’re going to get stuck with the bill.

Some of the ways to recruit new salesmen is to:  1. Find people that are already doing sales in other industries 2. Find people with no sales experience who are really smart and motivated then train them or 3. Hire salesmen away from your competitors.  If you’re going to do the latter, find out what it would take them to leave their current company and offer them a better solution.  More money and more freedom are typically the two things that people want the most.  

Salaries, Commissions, Bonuses – This is going to be up to you on how you pay your employees, but like I mentioned earlier, there are Virtual Assistant options of administrative personnel.  For you sales staff, you’ll need to figure out what best works for your company! 

CRM Tools, Company Cam, Aerial Roof Measurement, etc. – Let’s keep this relatively short.  For your back-office tools, there are a bunch of different options, but I will list out the ones we’ve used in the past and had great success.  Each one of these were picked out and we think they are the best in terms of performance and price.  By the way, never hand measure a roof, just pay for the aerial measurements.  It’s worth the price for your time and safety (We are not paid by any of these companies, this is just what we have used):

CRM – Job Nimbus

Photo Storage – Company Cam 

Accounting Software – Quickbooks Online

Paid Aerial Roof Measurement – EagleView and Roof Scope

Free Aerial Roof Measurement – Google Earth and Planimeter (I think it’s $10 for a 1-time fee)

Roof Pitch – Pitch Gauge

Estimate Writing – SumoQuote 

Drones – DJI

Running the Business

Business Owner, Self-Employed, or Hybrid – Most small business owners are confused when I bring up this concept.  Let me break each one down so it’s easier to understand:

Business Owner – Hires a full staff and has a professional team to do every single part and aspect of the business.  The business owner doesn’t do any actual work himself other than manage his staff.  The business owner doesn’t make sales, file paperwork, manage subcontractors, or nails down shingles.  He or she only manages the overall process and the people who make it happen. The business owner’s bottom line and profits are 100% predicated on how well his staff and professional team operates.  The business still run whether the business owner is there or not.  

Self-Employed – If an owner is self-employed, they’re the driving force of the profits of their company.  The entire aspect of the business is the owner.  The owner answers the phone calls, writes estimates, orders the supplies, manages the subcontractors, meets with customers, files paperwork, etc.  An owner who is self-employed has a bottom line that is solely predicated on them.  The business completely shuts down if the owner isn’t working. 

Hybrid – Most Roofing Companies are hybrids, at least at the beginning.  That is where the owner is stepping in and filling roles that normally would be done by an employee or a 1099 contractor however, the owner does it because normally, they care the most and its cheap labor.  The biggest question for you is, what kind of company do you want to have?

How to Write Estimates and How to Measure a Roof – SumoQuote is a great tool to use to write estimates, trust me, but if you are just starting out and want to use the tried-and-true method, this is what we do:

Material Cost + Labor Cost + Miscellaneous Cost = Total Cost x Profit Margin (30%-50%) = Price

Example:  $4,000 (MC) + $3,000 (LC) + $1,000 (M2C) = $8,000 x 40% (PM) = $11,200

Your miscellaneous costs could be dump fees, permits, heavy equipment, mobilization, etc.  Your profit margin is totally up to you but remember, this is for each projects gross profit, not total net profit.  There is still monthly overhead, which we will talk about in a moment.  Pricing yourself too low is a quick way to going bankrupt.  Charge a reasonable amount and work on your sales process to improve your close rate instead of just trying to be cheaper than everyone. 

Measuring a roof is easy and don’t hand measure them.  Use one of the aerial measuring tools I mentioned above.  If you’re using Google Earth or Planimeter, you’re still going need to do a little math, but it’s very easy.  Here is the formula: 

Size of roof x Slope x waste factor = Total 

Example:  40 squares x 1.180 (6/12 Pitch) x 1.2 (WF) = 56.64 squares

Insurance Work, Bid Work, Negotiated Work – What kind of work do you want to do when you first get started?  Most people go straight for the insurance work, but after you’ve been doing this for a while, the Holy Grail is doing negotiated work.  Insurance work takes up a lot of time but can pay well.  Bid work is just what the name implies, you will be bidding against other contractors and typically the lowest acceptable price is going to win.  Finally, there is negotiated work where you have a relationship built with a person or a company.  You’re their only option to get the work done and now you’re just negotiating the final price.  This typically is what you’re going to see when you develop a relationship with a property management company or a large corporation.  

Billing Customers and Cash Collection – You must be absolutely RELENTLESS when it comes to billing customers and collecting your payments.  This is vital to maintaining good cash flow, which is our next subject.  If you don’t collect your money, you can’t pay your bills, let alone pay yourself.  If a contract is signed, hold the other party accountable because if there’s one thing I have learned, the other people will hold you accountable.  A little personal tip: Don’t do business with friends and family.  Keep your business separate.  

Cash Flow – Cash flow is the lifeblood of your business.  In a nutshell, cashflow is the money coming in and out of your business.  You obviously have bills to pay for your insurance, suppliers, marketing, etc. causing cash to flow out of your account so you need to make sure cash is coming INTO your account.  That is what positive cashflow means.  Whenever I hear people brag about their revenue, I immediately say “Well what about your cashflow and profits?”.  If you can’t collect on your bills, I don’t care how much you sell.  Profit is the amount of cash coming into your account vs. out of your account.  At the end of the day, that’s the only number that really matters.  Please remember this. 

Paying Suppliers and Bills – When you first start your company, paying your bills is so very important so you can establish a business credit score and a line of credit (LOC) for credit cards and banks.  My personal advice is this, if you must suspend paying yourself to pay your suppliers and bills when you first start your company, do that.  There are experts who will tell you to pay yourself first and I understand that logic, but as a construction company that needs capital and LOC’s to grow, I recommend going against that logic.   

Credit Cards and Line of Credit  – I am going to keep this real short and sweet: get good credit cards and pay every bill you can with them.  Please, please watch this video on why using credit cards will make it you will never have to pay for a vacation again.  Using credit cards will also help with your cash flow, but you MUST pay for them in full at the end of every month.

A Line of Credit (LOC) is a type of loan that you will receive from a bank.  Basically, an LOC is there if you need it but you will not be charged any interest unless you decide to use it.  For example, if you have a $100,000 LOC and need $50,000 to pay for materials for an upcoming project, you just have $50,000 transferred from your LOC to your business checking account.  This happens almost instantly and only then will you start paying interest on the $50,000, not on the $100,000.  Interest rates are typically around 5%. 

Overhead – Let’s beat this dead horse one more time.  Overhead is the amount of money it costs you to run your business.  Typically, I like to use monthly overhead instead of yearly.  Keeping your overhead low will allow you to maximize profits on the revenue you can collect.  It will also shield you in the event something happens to you, your family, to your business, or to the economy.  I want you to build a recession proof company.  If you do this, it will cost you a little bit in profits when times are good, but it will keep you from going bankrupt when times are bad. 

Paying Yourself – Delayed gratification is one of the hardest concepts for human beings to master.  Only you can determine your compensation.  If you want to learn how to do bigger jobs, make more money, have more time off, and have less stress, you have to build capital, past performance, and experience.  Reinvesting your profits back into your company will allow you to look at the bigger picture.  Whether that’s hiring new employees, going after a large commercial project, or scaling your business model, you need capital to do it.  The easiest and best way to have more capital is to pay yourself less and reinvest your profit back into your company.    

Making Your First Sale

Follow This Guide When Making Your First Sale

• Generate a lead

• Turn Lead Into a Potential Customer

• Set an Appointment

• Find the Right Customer and Don’t Always Say Yes

• Inspection 

• Write Estimate

• Sign Contract

• Schedule Date for Project

• Pull Permit and Order Materials

• Schedule Subcontractors

• Start Project and Receive First Payment

• Close Out and Receive Second Payment

• Pay Subcontractors and Materials

Rinse and REPEAT!  

Final Thoughts and Tips

Remember this is YOUR COMPANY and YOUR LIFE so identify your perfect client and build the company YOU want.  Never allow yourself to just be an employee to your company and learn how to say no.  I know I have said it over and over, but having a low overhead is going to allow you to take risks other business owners can’t take.  Take yourself out of the rat race, focus on your empire, and don’t worry about what anyone else is doing.  Trust me when I tell you, there are a lot of pretenders in this industry who just run up their credit and live paycheck to paycheck just to impress others.  Stay quiet, stay humble, and aim for the fences.  Building slow and steady instead of trying to manage some crazy explosive growth is the framework to success.  Nothing is easy and patience will be your biggest ally.  

If you want more in-depth training, you can subscribe to our YouTube Channel here and join as a member for only $99 a month to get access to our full course on How to Start a Roofing Company:  How to Work Less, with Less Stress, and Make More Money.  If you had rather pay in full, here is a link to our Teachable Course here where you will pay a one-time fee of $997.  I assure you that in our course, we will show you how to save thousands and show you a path to make millions.  I assure you that you’ll get your investment back within the first 3 months of being in business. Either option will give you EXCLUSIVE ACCESS to all the coursework and my PERSONAL EMAIL where I am always available to answer questions and help you out.  Whether you have a question about marketing, how to handle a customer, or a sales script for your staff, I will happily take a look and help you any way I can.

Whether you become one of my students or not, I wish you success and hope this article was helpful.  Good luck to you and your endeavors!