16 Common Causes of Roofing Businesses Going Under

By Briquelle Simpson, JobNimbus. 

Here are 16 areas your roofing company should stay on top of if you want to survive in the industry. 

The roofing industry is booming, and it’s also quite competitive. If you don’t stay on the track to success, you can easily fall off. But how do you know if you’re on the right track? There’s no guaranteed way to ensure your business will survive, but there are things you can focus on to prevent failure. 

We’ve dug up the 16 most common reasons roofing businesses go under and categorized them into two main categories: customer experience problems and business management problems. We’ll cover all 16 issues and the solution to each to help give your company the best shot at survival. 

Customer experience issues 

1 - Poor quality work 

A new roof is a significant investment, and homeowners want to get their money’s worth. If a roofing company cuts corners, uses low-quality materials or doesn’t complete a job, the customer won’t be happy. And they absolutely won’t work with that company again or recommend them to anyone else. 

The solution 

High-quality work will help your roofing business thrive. Ensure that your team is providing top-notch workmanship on every project. 

2 - Dirty job sites 

Homeowners trust you with their home, yard and reputation. If your roofing company leaves a mess in your wake, that can cause a lot of problems. Not only will it make the job site look dirty, but the nails, shingles and other debris can hurt people. 

The solution 

Keep the job site clean before, during and after you work on the roof. Use a tarp to keep loose pieces from falling into flower beds and grass. You might also look into roofing equipment like the Equipter to help speed up the cleanup process. 

3 - Lack of service after job completion 

Once some roofing companies finish a job, they vanish. Homeowners might have questions or want more information after the roof installation. They should be able to get in touch with their roofer. 

The solution 

Ensure your customers can easily reach you during and after their roofing project. They’ll appreciate your willingness to connect. 

4 - Lack of communication 

Think with Google reports that 68% of study respondents are more likely to go with a business that offers convenient communication. Customers want to work with a roofer who will communicate with them. Homeowners want to know when your crew will get to their house, if something is delaying their project and when to expect a complete roof. And how will they get that information if you don’t share those updates with them? 

The solution 

Make sure you communicate quickly and clearly with your customers to provide them with the best experience possible. A texting platform like Engage will help you share vital information with your clients in a flash. 

5 - Bad reviews 

A couple of negative reviews aren’t going to ruin your roofing business. In fact, gracefully responding to them can win over new clients (see how to respond to negative reviews). But having mainly negative reviews can sink your company. Many homeowners will do their research online before hiring a roofing contractor. If they search for your roofing business and see a slew of negative experiences, they probably won’t want to work with you. 

The solution 

Give your roofing company a boost by ensuring your business has (many) good reviews. Don’t go in and make fake reviews. Those will do more harm than good. Instead, respond to negative ones and start asking your clients for reviews. 

Business management mistakes 

6 - Not putting money back into the business 

Finances can make or break your roofing business. Many roofing companies have gone under because they spend more than they earn. But roofing contractors can also make the mistake of not putting money back into their business. 

The solution 

A portion of your income should go towards improving your work and team morale. Consider investing in new tools and equipment, employee salaries and raises and training. 

7 - Unsustainable growth 

Sudden spurts of growth aren’t sustainable for a business. Every roofer wants their company to grow but injecting it with more and more sales isn’t the answer. You must have the right framework and processes to give your company room to grow. Otherwise, you’ll struggle to get sales, fulfill jobs and provide the top-tier service you’re known for. 

The solution 

Before you can grow the right way, you must set your business’s foundation. Create established processes for moving a customer through your pipeline and hiring subcontractors. 

One of the other things that skyrockets your company’s growth potential is getting a roofing software like JobNimbus. A project management software makes it easy to see where projects are and how your business is performing at all times so you can grow. 

8 - Untrained/poorly trained employees 

Consistently hiring employees without experience isn’t a bad thing. You can help foster a new generation of roofers. But if you don’t train your employees well, that can cause all sorts of issues for your business and clients. 

The solution 

Overcome this potential downfall by properly training all your employees: 

• If you sub out your jobs, ensure the quality of your subcontractor’s work is up to par. 
• Set metrics to measure your office staff’s abilities. 
• Hold weekly training sessions on roofing equipment, safety and best practices. 

9 - Bad company culture 

A toxic work environment can lead to high turnover and an influx of untrained employees. Negative company culture can bleed into customer projects and taint their experience. Not sure what makes a company culture a bad one? Check out these examples of a bad company culture and how to fix it. 

The solution 

Create a culture of collaboration, growth and hard work in your roofing company. Recognize the good things your team is doing and make opportunities for team bonding. 

10 - Not bonded, insured or licensed 

Each state has different roofing license requirements; some require it at the state level, and others at the local level. While you might not have to be licensed in your state, having that license can give your company credibility and put customers at ease. 

A license and bond go hand in hand. Most states require a bond (also called a surety bond) for a roofing company to be licensed. Don’t skip this step. Being a bonded roofing business can put you a step above your competition. 

Additionally, your roofing company should have insurance to protect you, your team and your clients. If you have any employees, you should not have ghost insurance. You need a genuine worker’s compensation insurance or else you put your business — and crew — at risk. 

The solution 

Follow local and state licensing, insurance and bonding requirements. Remember, you’re better off having licensing and not needing it than needing it and not having it. 

11 - No marketing strategy 

It’s terrible for a business not to market their company, but not having a marketing strategy is almost as bad. Roofing companies that don’t have a marketing plan are playing a short-term game. Marketing must be strategic. Without a marketing plan, you’re pumping money into a machine that only sometimes works. 

The solution 

To create a solid marketing plan, examine what’s working, changes based on seasonality and your target markets for the best results. You might start by making a roofer’s website. Consider making an email marketing campaign, using videos, getting on social media, running a company blog and creating a referral program. 

After all, most roofers are getting at least 50% of their customers from word-of-mouth referrals. 

12 - Lack of business knowledge 

Many roofing business owners have worked as roofers. But only some have a business background. Roofing business owners need more than roofing knowledge to survive. You need some understanding of business to help you keep everything running smoothly and profitably. 

The solution 

Never stop learning about business and roofing. Attend business events, take online courses, watch webinars, listen to podcasts and watch training videos. Double up on your knowledge by being part of roofing-business-specific events and coaching. 

13 - Not knowing business numbers 

You need to know how your business is doing to understand what’s working. Cold, hard data can help you do just that. But many roofing business owners only know bits and pieces. If you want to earn over $4 million next year, exactly how many roofs will you need to do? You’ve got to have firm numbers to let you know if you’ll meet your goals. 

The solution 

Track the most important numbers in your business regularly. Some should be monthly, while others need a more constant pulse. You can get a feel for the timing as you start following the data. 

14 - Wearing too many hats 

Another factor that leads roofing businesses to fail is wearing too many hats. This problem is especially common for small companies. Since there are few people, each employee takes on several responsibilities. But if you or your team are wearing too many hats, it can lead your company to ruin. 

Generally, trying to do everything yourself means doing it poorly. You burn out, lose sleep, lose time with your family, and stop doing the things you love. You can’t juggle everything without dropping a few things. 

The solution 

Delegate tasks and responsibilities so you aren’t trying to do everything yourself. Check your employees’ workloads and see if they’re taking on too many roles. If your office manager is setting up appointments, following up on invoices and ordering supplies and organizing your subcontractors, you might need to adjust their tasks. 

15 - Holding on to failures 

As a roofing business owner, you will make mistakes. Some of them will be small and fixable. Others will be large and irreparable. That’s just the name of the game. 

The solution 

See your mistakes as areas for improvement. Don’t carry the weight of those mistakes with you; you’ll just slow yourself down. Learn from them and move on. 

16 - Poor leadership 

If your crew sees your managers, leaders or company owners as poor leaders, they won’t respect them. If your leadership has poor communication skills, negative attitudes or micromanagement tendencies, that can affect your team’s morale. And without exemplary leadership, your roofing business will struggle to keep up. 

The solution 

Find and hire the right people. Make sure that the people you have on your team live up to your values and standards. Leaders with those qualities will inspire others. Help your managers and team leads identify their weaknesses and work to improve them. 

Original article source: JobNimbus