If you take the right steps, these seven common roofing contractor pitfalls can be avoided and your business can thrive.
Having worked as a consultant for many years helping roofing and other contractors, the unexpected can deliver devastating results. The more I work as a consultant, the less things surprise me. Here are some pitfalls to be aware of and commonsense advice.
1. Have a Real Safety Program
Roofing is an extremely dangerous industry with a death rate over 10 times the national workplace average. A serious accident or death is going to generate an OSHA inspection. They will take a hard look at your records and other safety precautions. They will quickly figure out if your safety program is a token attempt. Major fines, increases in workers' compensation and even legal charges can put you out of business. Yes, legal. An Ohio roofing contractor was sentenced to three years prison time for having a workplace death in an unsafe workplace.
Have a relationship with a safety consultant and access to the safety consultant’s cell phone number so you have immediate access if a major accident or death occurs. When something happens, it is too late to start searching the internet to find someone to help you.
2. Make Sure Insurance Covers You for the Unforeseen
Did you know more people are killed by coconuts than sharks? Surprising isn’t it? Did you know that contractors are far more likely to have administrative embezzlement or ransomware than a fire or natural disaster? Yet many contractors are not adequately insured in these areas. Have a professional business insurance broker review your coverages. Paperless technology has made it easier to steal from people.
Put safeguards in place for employee theft. Ten percent of the contractors we have worked with have experienced some type of major internal theft usually from a trusted long-term office employee. It is amazing how many of these embezzlers look like your aunt or the person next door. Many plan to pay the money back but they become further and further in debt. Some have a gambling addiction, others drugs, others a family member who needs constant money for rehab or lawyers. Door locks are to keep honest people honest, not burglars. Financial safeguards are also put in place to avoid temptation. Make sure someone other than the check writer balances the checkbook. Check all credit card statements. Have credit card and bank information sent to your home. Look at copies of all canceled checks. Make sure employees know you are checking on things. Did you know in accounting class they suggest you create the illusion that you inventory something like a liquor store every weekend? It’s impossible to do but employees are less likely to steal something if they think you are watching.
3. Develop a Job Risk Profile
Some questions to ask are:
- Have you done this type of work before?
- Is the job larger than you are accustomed to?
- Have you worked for this customer in the past?
- Does your project manager and foreman have experience in this type of work?
- Is the job out of town?
I had a customer do a $500,000 job where the work was somewhat unique with a new project manager and it cost $1 million out of pocket to perform. You never lose money on the job you did not take.
4. Focus on Your Strengths
Obviously, roofers work outside of buildings and high up. Frequently, customers don’t really see your work up close and personal. Just because your craftspeople are great roofers does not mean they will be great siding or basement remodeling people. With such work, customer scrutiny is much easier and imperfections easier to see. Stick to your core competency and focus in areas that match your skill set.
5. Have a Strong Office Manager and Admin Person
In most markets, an office manager or admin is going to cost you what a good foreman would cost. A good office person will take things away from you and ensure things get done. Many smaller contractors tell me they have no idea what they would get an office manager to do. Hire the right person and that person will tell you what to do. It will probably take time to hire the right person and you will learn a little with each hire. Most contractors are visual in nature and visiting another contractor’s office can help.
6. Deal with Family Problems Early On
The longer you wait to deal with family issues, the worse it will be. If your son, daughter, brother or whoever is not pulling his or her weight, address the issue. You may be surprised as to how they rise to the situation. Consider having a third party come in and address the situation. Not addressing the situation is unfair to the company and family member. It’s unfair to terminate a family member when they are 55 and can’t get another job. It is more important to have them as a family member than as an employee.
7. Don’t Be Held Hostage by Difficult Employees
We are all busy and frequently don’t want to go through the headache of hiring someone new or losing a production person. Most contractors wait too long before terminating someone. How many times have you had other employees tell you how horrible someone was after the bad employee is gone? Cancer does not cure itself. Hire slower and terminate quicker.
Don’t let these cautions make you worry. We find a good business offense is better than a bad business defense. Enjoy your job and have some fun while doing it. Funny, many blue-collar folks think it easy to be the boss. If it were easy, everyone would do it. It’s easy to grow cynical when owning a business. It’s also easy to feel alone. We find people join our PROSULT Networking groups to build a better business, but stay because their peers understand their challenges.
Try not to live in a vacuum. Find joy in what you do. If you are financially successful, hire people to do what you don’t enjoy. Focus on the things you like about your business, not the things you dislike.