Editor's Note: Return on Investment
If you are concerned about the high cost of your roofing, insulating or metal equipment, you may be focusing in the wrong place. With apologies to the late president, I challenge you to …
Ask not, “What will this new equipment cost?” but “How much will it pay?!”
The former really doesn’t account for much without the latter. As an ex-peddler of solutions to roofing production problems, I can challenge both the contractor and those who remain in the business of trying to sell you on their version of the better mousetrap. It is easy for you to simply ask, “How much is it?” and it is easy for them to reply by giving you a price that they hope you will like enough to buy their equipment. But there is so much more.
You are now probably spending more time looking at all the costs involved in your business. If you only examine the price on your equipment purchases, however, you run the risk of short-circuiting some opportunities. That really is the easy way out for you, and for many of those who seek your equipment business. Easy, yes, but is that any way to arrive at the best solution to a production problem?
If you are going to go through the effort to qualify your equipment dollars, start at the beginning: You wouldn’t buy a solution if you didn’t have a problem. Identify the problem and look at the ways you have gone about solving it in the past. Are these methods still valid, or are there better technologies and better solutions? If you were to spend a few dollars more on equipment, would the return on that investment pan out?
This is the question you must pose to yourself: What is the return on investment (ROI)? You and your people to whom you have delegated production responsibilities should ask this question routinely.
And you should expect your equipment providers to come up with answers.
When I first started in the business and people asked me what I did for a living, I would say, “I sell equipment to roofing contractors.” It took me at least five years in the business to learn that my job was to “Help roofing contractors solve production problems.” If I could do that, they would buy equipment from me and I would make a living for my family (which, thanks to many of you, I did for over a decade).
Make your equipment providers earn their living. Make them a part of the solution to your production problems. The really good ones are ready, willing and quite capable of doing so. They should be held accountable to answer the ROI question, and you should expect them to be more than competitive. And try to remember that a competitive ROI will not always result in your purchasing the lowest priced equipment.