Question: What is the real key to running a successful roofing contracting business?
Answer: Balance. If you do not have a balanced business approach and a balanced life, success can be pretty elusive. If you are a good salesperson and can sell jobs at a high price but are not interested in the numbers, you will tend to not know when and where you are making money.
Let me give you an example of that. One of the networking contractors we deal with is a terrific sales person. He is one of the best sales people I have ever known. He is very smart and incredibly nice. Not a “tin man” at all. He is a very personable, active listener whom people quickly trust. He thought he was smarter than our PROSULT™ Networking Process. I kept telling him to go up on his price. He continued to sell at the higher level and hid the numbers from me. Two years into the process he was $400,000 in debt, much of which was penalty and interest from the IRS. He did a million in sales and made 40K salary. Two years later after establishing some balance, he did a million in sales and made 220K.
Today, about four years later, he is doing $1.5 million and will make 400K. Why? Because he brought balance into the business and uses that balance to fight his tendency to be a nice guy with employees. He knows his daily production numbers and uses this knowledge and facts to get rid of people who are costing the company money. He has a good office manager that processes the numbers, sets appointments and manages his weaker areas. What is interesting about this process is that you do not have to be superman and do it all yourself. However, you do need to know the basics and what is important and then have someone help you with it.
Another networking person knows the numbers and is very conservative. He has carefully invested money and is worth a million or two but has struggled to grow. Now that his son wants to come into the business, he needs to raise his volume. Through a carefully planned approach, he has dramatically increased sales. In the beginning, he was uncomfortable with the process but by planning and keeping at it, he is thrilled with the results.
There is no magic bullet. If you are out of balance, you will continue to make the same mistakes over and over. You need a battle plan and someone to hold you accountable. Interestingly enough, if your business is out of balance, your personal life is also out of balance.
Question: I use my wife as bookkeeper and office help. We have several kids and she does not want to let go. As the business has grown, I do not have the support I need. What can I do?
Answer: Family members are not magic bullets to your personnel situation. What starts as a quick fix can be disastrous. We have had several networking participants who had to deal with tough family situations. One of the toughest was a dad who started the business and then had to take a full-time job. When he retired from that job, he thought he was coming back to the business as the boss. The son knew that would not work because dad worked part time at the company while having the full-time job and that was much of the problem. The son simply had to stand up to the dad and face the situation head-on. It has all worked out for the best.
Another contractor I know had a wife that simply was not interested in doing a good job of bookkeeping but would not give it up. He simply had to acknowledge the issue and deal with it. Today he has a great business, a good marriage and a half a million-dollar house. He has both a good wife and a good office manager. They just happen to be two different people.
One thing that can help is to tell the family member that it is more important to have them as your dad, son, wife or whatever than to have them as an employee. If there is a magic bullet, this is it.
Question:I have a terrible time getting employees so I decided to sub everything out. Now I am having trouble keeping subs, one sub bids against me and I have been having quality issues.
Answer: Many contractors look to subs as a magic bullet. Subs are a way to avoid personnel issues and keep from dealing with the problem. Subcontracting tends to only work when there is a compelling reason you can find such subs in strong supply. Many years ago, subs were easy to find because many tradesmen were poorly educated and did not want to go out on their own. Today, this may not be the case. A subcontractor strategy tends to work best when there is some other issue such as a language barrier. It is also very much a regional issue.
I cannot tell you the number of contractors who complain to me about finding roofers. The simple truth is that your company needs to make money. Once the company makes money you can then build an organization through subs or employees who are well paid and successful. There is no magic bullet. You have to make where you work a good place of employment and create opportunities. This has to be approached with a long-term strategy so as not to start bidding wars.
Roofing is hard work, but with some creativity, investment and a different mindset, you can build an organization. Whether you use subs, hourly employees or piece workers, the process takes commitment and is long term.
Question:I am slow on leads and really need work. I thought about getting a bunch of job signs and putting them out. Will that work?
Answer: Depends. The best leads are always referral-based. Direct mail, advertising, neighborhood farming, etc., can all drive leads. Don’t look for one homerun but rather use a lot of different techniques. Try to be the neighborhood contractor. Focus on areas where the homes are the right age and needs are real.
For commercial work, you need to target your audience and then work the system. You can do this with mail or with sales people but you need a process for doing it. If you are busy working on the job or bidding new construction, it is doubtful you are going to be able to do what you need to do.
In summary, I just spent all weekend locked up with 12 contractors. It was intense but the results were gratifying. We did role-playing and we made people confront their strengths and fears. We made it work because we kept at it and there was nowhere to hide. There is no magic bullet. If there were, contractors would not lead the bankruptcy lists. But if you work hard and bring balance to your life, you can make it happen!