Understanding the ebb and flow of roofing

Editor's note: The following is the transcript of a live interview with CCS Influencer Will Lorenz. You can read the interview below, listen to the podcast or watch the recording.

Intro: Hey. Hello, everyone. Hi, Will, how are you?
Will Lorenz: I'm good, Megan. Glad to be here in 2025 and keep things rolling.
Megan Ellsworth: Yay. We're so glad to have you. Welcome to 2025. We're really happy to have you as an influencer again, so thanks for being here. This month's topic, the first of 2025, is all about managing cash flow. And the question is, what should contractors be doing to effectively manage cash flow throughout the year and especially during the winter months?
Will Lorenz: Well, that's a great question. And I think it's the limitation for all of us many times in growth is how we manage our assets and our cash. And it's no different for a manufacturer as it is to a contractor. You have to really look at your outlays and decide when you're going to invest into new equipment or when you're going to invest in adding new staff. And then making sure that you can cover your incoming expenses, what raw materials you've purchased, what foam systems or roof coatings that you bought, and making sure that you can pay your vendors.
So, it's really about managing on a per project basis. I would say from a contractor perspective, making sure that you've got a budget that you can make money at and complete on time. And then working with your contractor or your general contractors, or your building owners to ensure that you have clarity as to what you should be paid at what timeframe and meet those numbers. And then in the winter months, it's again, kind of a bit what I would say, like a bear. You got to save something for the hard times.
And generally, in many climate zones, the roofings business slows down, if not stops and due to the inclemency of weather and cold. And you have to have enough for payroll and you have to have enough for pay your vendors and your taxes. And sometimes I think, certainly contractors, many of the best ones do this extremely well. But other ones will decide that they get to the end of the year, and they try and take a little bit more money out of the business for maybe personal things, vacations or items that they want to purchase. And it's really about smart business management there and saying, "Look, maybe after I get through the tax season and get my vendors paid, I can buy another piece of property or get a new truck or a boat."
Megan Ellsworth: Fun.
Will Lorenz: And when we see contractors who have struggled or failed, it's because they really took money out of their business at an inappropriate time. And they got themselves sideways there. And they expected money from their clients and it didn't happen, and suddenly they're in a pinch. And so, it's really about having a discussion with whom you're collecting your money from and making sure that you can stand behind paying your vendors appropriately.
Megan Ellsworth: Yeah, absolutely. And it's so easy, I think, to get ahead of yourself or pull out when maybe it's not the right time. So, that's just really good advice. Is there anything else you would say to advise on a good time to make those big purchases? I know you mentioned it a little bit.
Will Lorenz: I mean, I think it's always best to talk to your tax consultant. That's the first place. And then people who know that they keep cash on hand because they have something for a rainy day, those people know that they can seize opportunities if they come and there's a deal. They also know that they can keep square with their vendors, so they can always get incoming product and finish jobs on time. And that's just the smart way to doing it. The more you're highly leveraged, the more you're going to have difficulty responding to those conditions. And I suggest that you pay off what you can so that you can be in position to invest and grow when the time is right.
Megan Ellsworth: Absolutely. Well, Will, thank you so much. That's some great advice to start 2025 off with. And I'll see you in February.
Will Lorenz: Excellent. We'll see you at IRE, too.
Megan Ellsworth: Yeah, see you at IRE. Okay, see you then.
Outro: Thank you.