New business start

Hello Folks;

I am writing this post after about a two week period of just watching and reading. I understand the concept of this message board and I may get flamed but I hope I don't. I have been working as a salesman for a local roofing company (NOT storm chasers). We do a fair number of repair jobs and even a little light commercial. However, our bread and butter is storm damaged roofs. I would say that 90% of what we do is insurance work. I will admit that I have never swung a hammer on a roof (or a nail gun for that matter)my experience is from the sales and estimation side of the business. I'm sure others have come and asked before but I want to start my own business specializing in replacements. Tell me what I'm missing here? I will obtain my contractors license, liability policy and tax ID. I will handle marketing and advertising. I am familiar with quickbooks for accounting. I'm not familiar with Xactimate yet but I shall learn in short order. I have two local crews that will contract the work for me. They carry their own insurance, use their own tools etc. They do great work! Is there some huge glaring reason for me to not do this? I don't hope to do EVERY roof in town, just start fairly small and focus on quality work. Build a referral base and make a comfortable living. I am a stand up guy with strong morals and want to do things the RIGHT way. I would sincerely appreciate any advice from the group. I have learned a bunch by reading posts here and I respect the groups opinions. Thank you in advance.

That's good to know;

Its not so much the amount I'm paid, its how that money is alloted. The bigger point is, I aspire to be more that just a "salesman". The entrepreneurial spirit is something that I believe is within me and I intend to give it a run. I fully intend to be a student of the game and a professional through and through.

Again, thank you all for your suggestions. I have the utmost respect for all of you that are out there getting it done in these tough times. I wish you all lots of hail and wind to brigthen your days ahead!

As an employee that would be welcomed. As an owner or employer, I can imagine most wouldnt do it that way. I'm not quite sure what side of the fence I'm on there. I think, if I had steady trustworthy employees, I would share all the financial info regarding their jobs. I'm an honest guy and I like dealing with the same. I think that if you were to become very profitable, you run the risk of losing good crews. Maybe thats just the way it is. I dont know.

Thanks for the input

I'm not privy to company overhead figures but I know the job is costed out first. Then the 15% is taken off the top of the job profit. I am then paid 40% of the balance. So I get paid 40% of 85% of the net profit.

"...This process can take months and I have to rely on too many others in the meantime."

" ...employer takes 15% of the top of the job then pays me 40% of the profit after that. I don't know if that's standard in the industry or if its good or bad.

"...Its not so much the process,I don't like, its the percentages."

Where is the overhead figured in these jobs? Is it the fifteen per cent 'off the top'?

I understand that and it makes sense. This is another reason to look for a field manager.

Thank you

Robby, Thank you. I will look for someone that has the qualifications you list. Sorry to hear about the knee, hope its coming along well. Lane, Thank you too. I think you guys are exactly right as far finding an experienced roofer to oversee field operations. I will make this happen. I'm also a fan of being on the roof working for a while. This will help me to make good decisions in the future as well as lend credibility to the crews. To answer your question about pay, I guess I just want to be in control of the process. At least as much of it as I can. Currently, my employer takes 15% of the top of the job then pays me 40% of the profit after that. I don't know if that's standard in the industry or if its good or bad. I've had situations where final payment has been held by the homeowner (on insurance jobs) until regional has been by to inspect the job. Well, regional in my town is understaffed and under-funded and inspections can sometimes be two to three weeks after completion of the job. Then, if there are any corrections to be made, other is the repair and the re inspect. You see what I'm getting at? Its not so much the process,I don't like, its the percentages. Don't get me wrong, I'm not doing anything out of spite towards my company, I just think I can do it just as well if not better myself, have the pride of ownership of a company that people respect and be more profitable in the process. Anyway, Thank you all again for your professional insight. I really respect your opinions.

Go hail!

Well, my current employer is not a nationwide company but we do have offices in a couple different locations. We currently do 15-20 roof replacements a month in my area. off the cuff, I'd say the average job here (lets say 20 squares, one layer off and replace with a 30 year dm) brings typically about $6k. Most crews here will work for about $50-$60 a square which includes dump fees. Even adding liberally for insurance, advertising, etc. I think things look pretty good. As a salesman, a job like this will pay me about $400-500 bucks which isnt bad until you figure that I am also a 1099 salesman. I pay my own taxes and insurance. On top of that, I wait for a good chunk of the money to show up.

How much margin is the company you now work for make on an average insurance job in your area? Can you afford to run an above board operation on this margin? Remember that your 2 subcontractors will probably only do 3-4 roofs a week each at best if they are only working for you. If they are established and do good work, they probably have work coming there way already. If your present company is a large nation wide company, they may be happy to net $100.00 profit from each sale. Can you afford to operate and do the same with your overhead burden? Just some random thoughts. Wishing you all the luck.

TomB thanks for the response and all are valid points that I don't take lightly. My idea was to combine my life long sales and customer service skills with my roofing crews expertise to make a win/win. Is that flawed logic? I could see the dilema if I were going to roof these jobs myself but this isnt the case. I do like the idea of finding a field manager of sorts. I think that is sage advice. I don't know about contractor licensing in other states but here, you have to pass a 2 hour test on code and have three refereneces from people you have worked for/with in the field of choice. Then its a matter of being passed by the board and setting up the company with proper insurance and such.

Old School; I get understand the experience part (wish I had it) but I'll be pushing up daisies in 53 years! At least I hope so. If I do this, I will do the best I can to make up for lost time. I am a ravenous reader and while know that doesn't replace real world roof time, I hope it can help me identify pitfalls before they ocur. I will also spend time with my crews to get more practical experience. What I do know is that I am a hand shake kind of guy and no amount of money will change that.

Thanks again guys, I really appreciate the advice. I'll keep you posted.

Your a "stand-up guy and want to do things right"....That may be a true statement in your mind..... However; You've never "swung a hammer" and intend to subcontract the work you happen to sell, to a more qualified contractor? Hmmmm...... A more ethical and wiser recipe for success, may be to "partner-up" with an individual with some actual technical knowledge...I know most small type partnerships have a trendency for failure, in this case however, in you situation, (lacking any technical experience), it could very-well turn out be a win-win for a couple of guys that require each other's skills....Or get out & swing a hammer a bit, to get more of a handle on it. JMHO

Your state must be very lax on contractor qualifications to obtain a license....How can you get a contractor's license with no experience?....Unless of course there are no requirements...or the state lacks any contractor licensing, and your simply refering to a local municipality busines license?

Robby the Roofer Said: Do you have alot of experience truely inspecting your roofs? If you are not comfortable with this process, It might be a wise decision to hire and experience roofer to QC your liabilities part or full time (at least 15 yrs exp). This will keep your contractors honest. It is your company, your liability....protect your interest as much as possible.

I feel that I'm competant in determining wether a roof is hail/wind damaged. I know there are men with much more experience than I have. That being said, I am confident in the crews abilities I work with, and their ability to restore a storm damaged roof. I do tend to agree with having a right hand man (one with lots of years and experience under his belt), the question becomes, can I afford such an employee?

These are all the points that are going through my head. I want to make sure I address them before I rish my financial future. I'm not interested in doing substandard work just to make a buck. Robby, in your opinion, does it take 15 years experience to really get a handle on doing it right? I'm not doubting you just curious.

Thanks again

Thank you guys for the quick replies. I am fortunate to live in an area where we have fairly regular damaging hail storms. Someone told me that in my area, the average roof lasts seven years. We still have thousands of homes with T lock shingles on them which seem to be fairly easy to get bought. Oldschool, To be honest, I'm selling plenty of jobs (even in the slow season) the problem lies with the way that I'm paid. I receive a small sign up draw when the customer commits, then I get a small "first check" draw and the balance doesn't get paid to me until all monies are collected and roof is inspected by regional. This process can take months and I have to rely on too many others in the meantime. I got to thinking a while back that with a little hard work and effort, I can learn to do everything that my company does for me. If I can do this, I can be paid accordingly and if I fail, it will be because of me and I don't have to leave it in the hands of someone else. I do understand the gravity of the economic times and the overhead that is involved. But, if I follow conservative business plans my thinking was that there is enough work to make a decent living. Again, my goal isn't to be rich and move to the Bahamas by the end of the month. I'd like to do between five and ten roofs a month. Do them the right way, and earn a comfortable living in the process. Thanks again guys for your responses, I want to make sure I'm thinking about everything before I make the leap. I love the business. I only regret that I didn't start as a kid pounding nails. I'm sure this would add credibility. I have all the respect for you guys that are on roofs every day. We'll see how it goes. Talk to ya soon