You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your roofing company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a roofing company?
Though a roofing business can be launched from one's home, additional space will eventually be necessary as the business grows. Storage space must be available to house roofing materials. Additional expenses range from trucks for the transportation of materials to an leasing/purchasing an administrative office, paying for high-speed Internet, utilities and labor costs. Liability and workers' compensation insurance premiums must also be paid.
What are the ongoing expenses for a roofing company?
Roofing business owners must pay their employees. Other ongoing expenses include liability and workers' compensation insurance premiums, utilities, Internet, trucking costs and office sundries such as coffee, lunches, cleaning supplies etc. A new truck will likely cost $20,000 or more. A dumpster rental costs about $350. Alternatively, you can purchase a dumpster for around $3,000. In terms of labor, installers usually receive $15 per hour. Foremen receive around $20 per hour. Laborers typically make between $10 and $12 per hour. If you hire an office manager, he will likely make $15-$20 an hour. Rent for an office/storage space will likely be $1,000 per month. Budget in another $7,000 for liability insurance, $200 for monthly utilities, $1,000 for office supplies and at least a couple hundred dollars per month for advertising.
Who is the target market?
Roofers tend to favor clients who own property with a flat roof. Roofs with steep angles are much more difficult to work on. Most roofers prefer to do business with individuals who own numerous properties. Establish a business relationship with such an individual and it will likely mean additional projects in the future.
How does a roofing company make money?
Roofers make money in a variety of ways. Some charge for roof inspections/evaluations. A comprehensive roof evaluation requires much more than examining the roof from ground-level with a pair of binoculars. It requires climbing a ladder to the top of the roof and examining the structure's shingles, chimney, soffit, gutters, fascia, and so on. Roofers also make money by performing roof repairs, roof replacements and roof installations on new structures.
How much can you charge customers?
Some roofers charge upwards of $100 for a comprehensive roof evaluation. Others offer free roof inspections with the hope that the property owner will lean on them for subsequent repairs/replacements. A roof replacement typically costs between $6,000 and $14,000 depending on the materials used, the size of the roof, the roof's angles and an array of other factors. If a roof is to be replaced, you can charge around $1,000 to tear the old roof off. The cost of roof repairs hinges on the extent of the damage and the type of material to be used for the repair. Be sure to account for additional costs when providing clients with a quote. Such additional costs include fuel, insurance, truck maintenance, advertising, dumpster fees, taxes and so on.
How much profit can a roofing company make?
It is possible for roofing businesses to make a six figure profit in the initial year or couple years of operation. Roofing businesses that are in business for years can make several hundred thousand dollars in profit each year. Expand across counties, states and the nation and your roofing business will have the potential to make millions in profit.
How can you make your business more profitable?
The key to maximizing your roofing business's profitability is to keep material and labor costs down while securing a steady stream of new clients. Establish a reputation as a high-quality roofer and you will eventually be able to charge more than your competitors as customers will be willing to pay a premium for a roof that stands the test of time. It is also possible to have sideline businesses such as a roofing consulting company. Experienced roofers have an abundance of skills and knowledge that others are willing to pay for. If you own a dumpster and won't be using it on a specific day or week, you can rent it out. If you pay for office/storage space that you do not use in full, this space can be rented to another business owner.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your roofing company is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a roofing business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Roofing businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your roofing business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A roofing business can be run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a storefront:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a roofing business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your roofing business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a roofing company
Many roofers obtain additional clients through word-of-mouth referrals. Please your customers and they will be inclined to recommend your business to friends, family, co-workers and others. Though conventional forms of outbound advertising on TV, radio and newspapers are effective, an inbound marketing push will also help. Key in on search engine optimization efforts by establishing a website with a blog that establishes your business as an authority in your industry. Check out your competitors' prices for roof evaluations, repairs and replacements. Match or beat their prices and customers will eventually gravitate toward your roofing business.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
As noted above, word-of-mouth referrals are a powerful means of attracting new customers. Be sure to mark your company's trucks with your business name and logo so everyone who passes by one of your work sites knows that your crew is doing the job. Aim to exceed customer expectations so they are inspired to return to your roofing business for additional projects as time progresses.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Roofing Company In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
If you like to work with your hands, desire to be your own boss, and want a consistent flow of work, the roofing business is for you. Aside from making plenty of money, opening a roofing business will provide homeowners and business owners with a much-needed line of defense against the elements. The roofing business requires climbing ladders to access roofs. If you embrace the opportunity to work high in the air on angular surfaces, the roofing business is right up your alley. This business also requires overseeing a team of workers who perform the majority of the manual labor. The best roofing business owners and managers understand how to properly delegate duties, communicate with clarity and lead employees in an effective manner.
What happens during a typical day at a roofing company?
The typical roofing business owner has an incredibly busy workday. They are constantly looking to establish relationships with property owners of all varieties, from business owners to homeowners, apartment complex owners, condominium owners and beyond. Aside from recruiting clients, roofing company owners also search for high-quality, low-cost roofing materials. They ensure an ample supply of these materials are on-hand to meet the demands of each roofing project. Furthermore, roofing business owners assign workers to specific projects to ensure each client's roofing project is completed in a thorough and timely manner.
What are some skills and experiences that will help you build a successful roofing company?
If you plan on performing some of the roofing work yourself when first starting out, you must be comfortable working with your hands at high elevations. You should have a mechanical aptitude, be in good physical shape and willing to use your body as well as your mind to complete challenging roofing projects of all varieties. Roofing business owners who elect to remain in a comfortable climate-controlled office must have solid managerial skills. They handle important duties ranging from ordering roofing materials to coordinating logistics, managing work crews and hiring/terminating employees.
What is the growth potential for a roofing company?
Successful, hardworking roofing business owners enjoy unlimited potential for growth. This is especially true of roofers located in urban or suburban areas with large populations. Roofs require plenty of attention and repairs, especially in areas that experience frequent rainstorms, windstorms, snow storms and other inclement weather. The only constraints on a roofing business's growth are a lack of capital to purchase roofing materials and hire personnel. Most roofers find enough clients to expand their business at their desired growth rate.
TRUiC's YouTube Channel
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a roofing company?
The best way to start a roofing business is to learn under the wing of an accomplished roofer. Watch a professional roofer at work, work alongside him, read about roof repair/replacement strategies and hire individuals who have years of experience. Another key component to operating a successful roofing business is pressing the flesh. Get out there and network! Attend industry events, socialize with business owners and spread the word about your roofing company's merits. Of critical importance is your web presence. Build a visually friendly and informative website that features your company's services, examples of prior work etc. It certainly helps to create online content with search engine optimization in mind so prospective clients can find your business with ease.
How and when to build a team
Though you will be able to perform some roof evaluations and repairs on your own in the first weeks and months of your roofing company's launch, you will eventually need to hire a team of roofers. If your business grows, you will reach the point where you manage a team of roofers from the comfort of your office. Key in on experience and work ethic when hiring roofers. You need skilled individuals who aren't afraid of hard work. After all, working high up on an angled roof on blazing hot summer days is not easy. Check each candidate's references and work history to get a gauge as to whether he is cut out for this grueling work.