Damato of the Day Is ... "Financing for Commercial Re-Roofing?"
Heard a new one the other day. Seems a commercial roofing contractor, confident of having won a sizable retrofit roofing project (over $1 million), was surprised when a large national contracting firm slipped in with a lower price coupled with the offer of 24-month financing.
Heard a new one the other day. Seems a commercial roofing contractor, confident of having won a sizable retrofit roofing project (over $1 million), was surprised when a large national contracting firm slipped in with a lower price coupled with the offer of 24-month financing.
I have not heard who won the project, but the financing offer left the first contractor with a real problem since he had not seen it coming. I am certain the contractor is now wondering if there is any way to compete with such a “creative” offer as this. I believe the answer is “yes,” but it will doubtless take considerable advance planning to pull it off. The real question is, “Are we about to witness a new trend?”
Roof contracting is an interesting business in that the smaller contractors often enjoy advantages when up against larger and better-financed contractors. In a world where the rules of commerce and finance are in a state of constant change and commotion, however, we may see the birth of many new and creative ways to compete. And the larger contractors who have large investments in their enterprises are going to do whatever it takes to compete in this environment.
If you are a $100 million per year contractor competing with a $10 million per year contractor on a project, you could reverse roles if you were to compete on price only. Yes, you can leverage your buying power, but that will not result in a lower overall cost on every project you deliver. But the difference in scale can allow a larger contractor to offer things the smaller contractor will find difficult to match, and financing may turn out to be a very clever wild card.
In weeks past we put forward the idea that there are drivers in the market that could lead to another round of consolidation in the commercial roof-contracting industry. Large contractors flexing their muscles in creative ways is one thing that may lead to change. What are you hearing?
Heard a new one the other day. Seems a commercial roofing contractor, confident of having won a sizable retrofit roofing project (over $1 million), was surprised when a large national contracting firm slipped in with a lower price coupled with the offer of 24-month financing.
I have not heard who won the project, but the financing offer left the first contractor with a real problem since he had not seen it coming. I am certain the contractor is now wondering if there is any way to compete with such a “creative” offer as this. I believe the answer is “yes,” but it will doubtless take considerable advance planning to pull it off. The real question is, “Are we about to witness a new trend?”
Roof contracting is an interesting business in that the smaller contractors often enjoy advantages when up against larger and better-financed contractors. In a world where the rules of commerce and finance are in a state of constant change and commotion, however, we may see the birth of many new and creative ways to compete. And the larger contractors who have large investments in their enterprises are going to do whatever it takes to compete in this environment.
If you are a $100 million per year contractor competing with a $10 million per year contractor on a project, you could reverse roles if you were to compete on price only. Yes, you can leverage your buying power, but that will not result in a lower overall cost on every project you deliver. But the difference in scale can allow a larger contractor to offer things the smaller contractor will find difficult to match, and financing may turn out to be a very clever wild card.
In weeks past we put forward the idea that there are drivers in the market that could lead to another round of consolidation in the commercial roof-contracting industry. Large contractors flexing their muscles in creative ways is one thing that may lead to change. What are you hearing?
