How to Start a Roofing Company

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How to Start a Roofing Company

We made tons of mistakes and learned quite a bit when Zach and I started a roofing company. We have broken this process down to 4 thorough steps of commitment and patience.

Like any other business startup, the only difference when you start a roofing company is the type of market you’re serving.

Although now we consider ourselves to be roofing experts, colleagues to share with us their inputs to starting a new business.

4 1/2 hours later, we were able to create this 4-step guide to starting your roofing company. Let’s begin!

Step 1: Define Your Roofing Business

Step 1 is the most critical step of all because it’s where all the planning happens. Rushing a new roofing business plan or model will only come to bite you in the long run.

For this reason, we’ve outlined several sections in this step to help you define your roofing business.

Create a Name for Your New Business

Don’t underestimate the power of a great name. Think long-term. Think of how the name of your roofing business will look like in front of the millions once you’ve grown your roofing company.

Digital Roofing Innovations. A stupid name that we are still fighting. Don’t make that mistake.

When creating a name for your roofing business, make sure the name relates to what your company plans to offer.

Don’t go with names that simply sound “cool.”

If consumers can’t identify a proper link between what your roofing business sells and its name, this makes it harder for consumers to trust you as a brand, let alone understand what you do.

For example, the brand name Entrepreneur is all about learning how to start, run, and grow a business.

The content you find on their site centers around this concept, and it’s easy to understand how the name and their service connects.

With all this said, here are a few tips to remember when creating a name for your roofing business:

  • Don’t choose hard-to-spell names. Instead, keep it simple and easy to remember.
  • Do some research. Sometimes, your ingenious idea of a name may already be taken.
  • Don’t limit your name to a specific product or city. Eventually, as your roofing business grows, so will your products and services. A name like Roofing Services in Florida sounds limiting, and should you expand to other states, this can confuse your consumers.
  • Ask for feedback. Brainstorming ideas is always a great solution.
  • Use name generators like Naminum.comShopify Business Name GeneratorNameMesh.com, and much more!

The best name for a roofing company I have seen is Roof Medic.

Where Is Your Service Location or Area?

Do you plan to start a local business within the area? Or do you have plans to go nationwide or even worldwide?

No matter how big or small your dreams are, identifying where you’ll set up your shop is vital.

This will help you identify your customer base and target market easier, and most of all, schedule your logistics and deliveries appropriately.

What Services Will You Offer?

The services you offer depend on your personal preference and current capital.

Roofing materials are costly, and when you factor in inventory costs, delivery fees, and supplier or freight expenses, well, you know where we’re going with this.

Some niches in the roofing business include:

  1. Roofing replacements and repairs – Repair damaged shingles, gutters, roofing membranes, or fix any water leaks. You can also do roof inspections and perform brand new roof installations.
  2. Residential Roofing – You’ll mostly deal with homeowners and provide any services to meet their needs.
  3. Commercial Roofing – Similar to residential roofing, only that you’ll most likely offer services for businesses, organizations, and commercial buildings.

Identify Your Target Market & Customer Profile

After you’ve picked a name and identified your services & service area, start looking into who will benefit from your services the most, or rather, your target market.

Defining your target market and customer profile are crucial elements to the success of your business and your marketing approach.

Consider the residents, proprietors, contractors, and any business owners in your area. Scope out your customer base and analyze your competition to find out what your customers need.

When starting a roofing business, you can identify your target market based on three markets:

  1. Consumer – A market that refers to individuals who purchase goods for their own benefit and use. Grocery items are one example.
  2. Industrial – A type of market that refers to groups, organizations, or individuals who purchase your products to produce other products or use daily.
  3. Re-seller – The re-seller market refers to wholesalers and retailers or middlemen who purchase finished goods and re-sell these products.

Most companies can successfully map out their target market; however, they also leave out the customer profile.

The purpose of defining a customer profile is to segment your market accordingly and identify why a customer wants to buy your product or service.

A customer profile helps you stand out from your competitors and gives you more insight into how to approach your customers in the later steps of your roofing business.

Your customer profile is built mostly on demographics; however, you can take that a step further by including psychographic and behavioral factors.

You can learn more about learning how to build customer profiles here.

Allocate All Roofing Costs and Expenses

The final element of the planning stage or when you define your roofing business is to allocate all the expenses and costs associated with your startup and as your business grows.

Costs like trucking for transportation, Internet, storage space for housing your roofing materials, utilities, workers’ compensation, and so forth are necessary costs you need to allocate beforehand.

Ongoing expenses also include the following:

  • Maintenance fees (cleaning supplies, equipment, etc.)
  • Insurance premiums
  • Rent
  • Labor (Installers – $15/hour, Foremen – $20/per hour, Manager – $15 to $20/hour)
  • Advertising

Allocating all the costs and expenses associated with your roofing company is crucial to your profits, revenue, and sustainability of your business.

Step 2: Establish a Legal Entity

After the planning stage, the next step involves securing any legal documents and paperwork to authorize your roofing business.

Types of Legal Entities

Establishing a legal entity is beneficial in the event someone sues your roofing company. As a result, you won’t be personally liable for any charges accused.

More importantly, a legal entity broadens your financial opportunities and success. The common types of legal entities include:

  • LLC – LLC is the most preferred choice for a roofing business. The main reason being, an LLC legal entity protects your personal assets from any roofing business liabilities. Profits are also taxed as income, and losses are taxed as a loss of the business owners.
  • Sole Proprietorship – A sole proprietorship allows you to be the sole owner of the roofing company; however, you won’t have a specified business structure. As a result, your liabilities, personal assets, and business are not separated.
  • Corporation or S-Corp – S-Corp is a closed corporation with a certain limit to the maximum number of members involved in your roofing business. This may be beneficial for small business owners with regards to taxes.

Register Your Taxes

Unless you want to face a few years in prison, you have to register your taxes with IRS.

Registering your roofing business with IRS will grant you your roofing business an Employee Identification Number (EIN), so you can operate legally.

Open a Bank Account

Opening a bank account protects your personal assets, such as your home, car, and valuables, in case someone sues your roofing business.

When you start a roofing business, mixing your business and personal accounts incurs greater risk. Additionally, this will help you file taxes, perform accounting, and manage salaries better.

After you open your bank account, you can add more financial security through these options:

  1. A Credit Line – Having a credit line is useful for providing you with a financial safety net and gives you access to extra funds in case you need them. Having a secure, stable credit line also prevents you from going through a lengthy application process of acquiring funds.
  2. Checks – Not all customers pay through cash or credit cards. If your customer offers to write a check as payment, this makes it less of a hassle than processing credit card payments.
  3. Bank Card – Bank cards provide the convenience of processing payments and purchases without relying on credit or cash. This could be a safer option for some who prefer to carry small amounts of cash wherever they go.

Obtain the Necessary Licenses & Permits

Just like every business owner, you need permits and licenses to operate legally and safely. Some of these include:

  1. Business Permit (Local) – Business permits are necessary requirements if you want to operate your roofing business. Every state will also have different licensing requirements, so check the documents you need before applying. SBA has a website you can use as a guide in case you’re unsure of where to start.
  2. State Contracting License – A state contracting license allows you to hire contracts within your state and foster better relationships with potential clients and colleagues. However, the process may be quite tedious, so it’s best to get one after you’ve obtained the fundamental permits.
  3. Service Agreement – Service agreements are useful when you start a new roofing project. This should help you settle legal disputes, clarify client expectations, and set the proper payment terms and conditions.
  4. Certificate of Occupancy – If you plan to lease or build a storefront, the government must require a certificate of occupancy to ensure you comply with all building codes, government regulations, and zoning requirements.

Get Insurance

On the first day you start your roofing business, you expose your business to several risks such as property damage, injury, etc. With all these uncertainties, you need insurance to help cover the loss and protect your future beforehand.

Yes, yes. Insurance premiums can be costly. However, without insurance, one lawsuit could potentially drain all your assets, savings, and income.

If you don’t know where to start, we’ve compiled a list of insurance options to get for your roofing business:

General Liability Insurance 

The best place to start with is general liability insurance since it covers most claims and protects you from various lawsuits, such as customer injuries, property damage, sub-contractor liabilities, and other related lawsuits.

Workers Compensation Insurance 

Workers compensation is your second best insurance to get. Starting a roofing business will also most likely mean employing workers. Whether these workers are full-time or part-time employees, this type of insurance protects you from events such as injury, illness, or any work-related accidents.

Professional Liability Insurance 

Since customers will come to you for a consultation about their home and roofing problems, you’ll provide your customers with certain products or actions to take.

Should these recommendations result in the customer’s loss, professional liability protects you from legal claims that follow from these scenarios.

Umbrella Insurance 

Think of it as an additional safety net against lawsuits. Sometimes, lawsuits may prove to be so disastrous that your primary coverage becomes a risk of depletion.

Umbrella insurance helps you cover against these disastrous events and provides better recovery after a loss.

Sub-Contractor Insurance 

If you plan to hire independent sub-contractors, any damage caused will require something more than just general liability.

Vehicle Insurance

Seeing as how you’ll most likely be using trucks to transport goods and roofing materials, you’ll need protection against any accident-related cases.

Don’t Forget to Hire An Accountant

With all the costs and expenses you incur in your roofing company, it’s vital to keep accurate records or your finances and data entries.

Inaccurate data can ensue legal complications, especially since you’re required to maintain accurate bookkeeping records by law.

As a business owner who handles a heavy load of tasks and responsibilities, it’s best to hire a professional accountant rather than do all of it on your own.

Even if you plan to do your own accounting when you start a roofing business, your books and records should have consistency as your company grows.

Trying to handle the accounting tasks of your business will only distract you from completing important tasks and responsibilities that could stall the growth of your company or, worse, incur a potential loss.

Step 3: Develop Relationships

Even with successful planning and establishing all the necessary legal paperwork, building trust in your relationships with clients, business owners, and the market, in general, is key to the success of your roofing company.

Choosing the Right Distributors

Choosing the right suppliers for your roofing company can affect the delivery schedules and overall your material procurements.

Without the right distributors, this may lead to inaccurate deliveries, receiving the wrong or low-quality materials, and late shipments.

All in all, your distributors are vital to the material handling and distribution of your products. If you deliver poor quality, this will also set a bad impression of your roofing company with your clients and customers.

That being said, here are a few tips when choosing and dealing with distributors:

  1. Establish appropriate payment terms and conditions and any pricing discounts you may be eligible for depending on the bulk of your order or alternative transaction methods to help save on costs.
  2. Don’t limit yourself to a handful of distributors. At the start of your roofing business, cast a wide search of any potential distributor you may find and narrow down the selection process after.
  3. To help narrow down your options, determine the right distributor based on your needs, number of years of experience as a distributor, delivery & distribution structure, the brands in their current portfolio, and the number of channels and customers they currently serve.
  4. Do your own product research. This involves the proper storage requirements, adequate material handling guidelines, prices, competing brands, etc. Talking to a distributor without a clue on how your materials aren’t advisable. Understanding your product is as vital as being able to select the best distributor to handle what you need.

Look for Professionals

When you start your business, hiring professionals opens your mind to fresh and innovative ideas that could help grow and expand your company.

It’s wise to spend money on hiring professionals for Marketing, Legal, and Accounting areas. Each professional brings their secrets, tips, and tricks about the industry that would take years to learn on your own.

As a result, hiring professionals could potentially help you save money long-term even.

Step 4: Promote and Market Your Brand

Promoting your brand is key to your company’s growth. With the right tools, you can generate leads for your new business and grow your visibility.

Our company was able to create viral marketing ads that led to a monster increase in sales. Check out our viral video.

Get A Roof Get A Gun Viral Ad

Promotion Options

The rise of technology and online presence is a growing number, and it reveals just how significant social media, in general, can influence your brand’s visibility.

Here are a few options to consider when promoting your brand:

SEO

Roofing SEO allows you to create great roofing content that can add value to your readers while at the same time generating leads for your roofing business.

Although SEO can potentially bring a wide number of clients in, SEO is a long-term game that requires patience. Needless to say, SEO pays big returns when done right and given enough time.

Before you can start doing SEO, you need to start with a website first. You can easily create one through website creation apps such as Wix or Squarespace.

Some might prefer to use WordPress for their website; however, this may take more time than if you go with Wix. Then again, it’s up to you.

Finally, you also need to set up a domain name and look for a website URL that hasn’t been used or taken. Building a website can be done either on your own, or you can hire a professional to take care of this part for you.

Social Media

Social media is growing rapidly by the second! Platforms such as Facebook or Instagram are great places to start.

Using media-rich content and high-quality images or videos, these can help you grow the visibility of your business.

Email

Email may be traditional marketing, but they’re still as effective. Learning how to compose the write email messages is one crucial factor in a successful email marketing campaign.

Truck Wraps

Even with a strong online presence, mobile advertising for your roofing company is just as great!

These promotion options only break the surface of promoting your brand. If you want to learn more, this guide has several other options for you to consider.

Consider a Marketing Agency

If you have the budget and capital to spend on a marketing agency, why not? Marketing agencies are well-equipped and well versed in marketing techniques, tips, and knowledge.

This can help you save a lot of time and enable you to generate good leads through the help of a team of experts.

Final Tips

After you’ve successfully started your roofing company, you also have to consider how to sustain your quality, efforts, and performance overall.

Before you go, these 7 final tips will help you keep your roofing company in tip-top shape:

  1. Build efficient systems for your business and operations to run smoothly. As your roofing company grows, so will your team and the responsibilities. Without a proper system in place, managing your roofing company becomes difficult.
  2. Continually improve your roofing company by improving customer satisfaction value, updating your website or business plan, learn more advertising strategies and ways to increase the closing rate.
  3. Pay attention to the feedback you receive from customers to help your roofing company expand and meet your customers needs better.
  4. Hone your sales roofing skills. Learning how to sell effectively plays a major influence in any roofing business.
  5. Cash and checks are the best financial transactions to use when you start a roofing company.
  6. When starting your roofing business, pay all the essentials first before spending on advertising.
  7. Last but not least, always save during off-season to pay for any roofing expenses or ongoing costs.

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