MeasuringUp: Doomed if it Rains, Doomed if it Doesn't
Roofing can be a tough business. If it rains too much, you can't work. If it doesn't rain at all, there is no need for your services. You can be doomed if it rains but doomed if it doesn't. To make matters worse, all the storms and crazy weather patterns seem to have caused particular havoc in people's work schedules.
So what can you do about this odd dilemma? Well, you cannot control whether it rains or not, but you can control how you plan and manage your business. Too many business owners are so caught up in the day-to-day they suffer from a lack of long-term thinking. Some shortsighted thinking can create impractical business decisions. Many years ago, I worked for a locally owned quarry company that had fallen on slow times. It did not take long to identify their main problem. When an interstate highway passed through their semi-rural location, business was terrific. For two years, business was great and the company expanded to meet the demand. Unfortunately, when the highway's construction moved beyond what was a reasonable travel distance, business dropped off dramatically. You wouldn't think someone would need a business consultant to point this out.
The Value of PlanningStrategic planning and better business planning can help you avoid making foolish mistakes. Many contractors mistakenly think business plans must be lengthy and complicated. The real purpose of planning is to help you visualize your goals. Such visualization allows you to correct illogical thinking.
Storms, storms and more storms have wreaked havoc on roofs in many areas of the country. Much of the Southeast has seen a bonanza of roofing work. While there is still work available, leads in some areas are beginning to dry up. Much like the road builder, times were great, but now things are getting tough.
When your area is hit by a major storm, get as much work as possible, but once the initial booking of work is done, take time to study the impact on the market. How many roofs are going to be replaced? How many new roofers have traveled to your market? Once the work has been completed, will immediate demand be exhausted? Is there an area nearby that was not as severely affected by the storm, and can you market in that area? Just like the squirrel that needs to store nuts for a rainy day, it is foolish to think storms will last forever, and you need a backup plan.
Putting some money away for a rainy day is a motto that many roofers should adopt. Look at your cash and sales needs over a three- to five-year period. Make sure any expansion takes your long-term needs into consideration. If you are going to work in a business where such fluctuations are a natural part of your business cycle, make sure you keep adequate capital on hand. You should always have cash reserves you can tap into should weather play with roofing demand in your market.
Be PreparedPrepare for storms with some type of emergency plan. How are you going to be able to answer 300 calls a day? How will you get the extra estimates done? Do your employees know what to do? What will your story and sales pitch become in the aftermath of a storm, and how will you protect your market against an onslaught of cheap out-of-town competition?
Strengthen supplier relations and be more realistic regarding shingle and other product needs. Manufacturers can only make so much of their products, and every contractor thinks his or her job is the most important. Talk with your suppliers and see them as a partner and not someone just to beat on for a better price. When bidding an unusual or special-order shingle, plan ahead and make sure you have adequate lead time for product delivery. Have a realistic give-and-take discussion with your supplier.
If conditions are dry, you need to have a way to quickly increase your marketing effort. Smart companies have ways to turn marketing on and off as needed. Make sure the majority of your leads are sold and not wasted. Several years of storms can turn salespeople into order takers. Now is not the time to find out if your salespeople are not as good as you thought they were. Manage your sales effort and make sure you are taking advantage of all opportunities.
Understand how insurance companies operate and what the rules are. Whether you agree with their methods or not, it can be virtually impossible to change how large companies do business. Take the time to learn the ins and outs of such work. There are two kinds of people who dance with elephants - the quick and dead. Bitching and moaning about the industry will probably do little good.
In closing, I wish I had a magic answer to help with your weather problems, but no one does. No matter how hard we try, we cannot fool with Mother Nature. A much more realistic approach is to plan ahead and understand such issues are part of business.