5 False Beliefs That Will Destroy Your Roofing Business, NOT Grow It

The problem with roofers is that they think like roofers. So in this video, I'm going to break down the five telltale signs that you're running a roofing company like a roofer and not a business owner. This video is for owners and managers who are running a roofing company. Because what worked in 2019 is not what's going to work in 2025 and beyond. Change is coming whether we like it or not. No, this is not just doom and gloom. This video is designed to empower you to survive through the changes. With the economy, with financing rates going up, with changes, with insurance, AI technology, pe, all of that and more. Because on the other side of the fear that many of us experience as we face change lies opportunity. And our biggest opportunity right now is to learn how to run a business that just so happens to do roofing so you can stop competing in the sea of roofers who think like roofers. We let's get started. Roofing sales is personal development in disguise and the reward for growth is life changing. I hope my content helps you create a richer life and bank account. The first telltale sign that you think like a roofer and not a business owner is when all you focus on is revenue. If all you focus on is revenue, you overlook the obvious. Now there's a saying that revenue is vanity, profit is sanity, and it's amazing how many people you may meet in the roofing world and there's a lot of chest thumping ego about how much revenue they're making as if the size of the company dictates its health. But I want to ask you this question. Would you rather run a $5 million year roofing company with 20% net profit or a $10 million year roofing company with 8% net profit? Yeah, if you did the math, you'd find that the 5 million dollar year roofing company at 20% net is making more money than the 10 million dollar year company. Now this type of thing is something I see a lot because people chase revenue and owners will often overlook the financial health of their business. They start answering questions like how much should I pay my team by taking advice off of the Internet or social media groups without factoring in a holistic picture of what it actually costs to run their business. Now these business owners don't know their numbers, do not have high levels of financial literacy, and as a result run themselves into the ground. In fact, I had a client once that scaled down, as they called it, from 15 million to 8 million and they started making more money because they were rebuilding a business that was actually profitable. Now, one of the biggest pitfalls with roofing as a industry at large is the liability that we have. And when we touch a house, we're married to that house for a number of years and everything that could possibly go wrong. So if you run a $5 million year company and you're at 20% net versus 8% net at a $10 million year company, your company at 10 million has more than twice the liability and half the profit. Now that is an equation that no one wants. Now, oftentimes you don't look at this the right way until someone gut checks you. And that's what's so valuable. People you surround yourself with. Now, I say to take the idea of like mindedness and I want you to crumple it in a ball and chuck it out the window. Because like mindedness creates an echo chamber and a cult. It's important for you to surround yourself with value aligned people because when there's value alignment, you can have different perspectives and different ideas that align around one value that challenge your view, which as an entrepreneur you should hope that people challenge you so you can then gain a fresh perspective. Because there's nothing more valuable than perspective. This is one of the things that is so rich about the community at the Roofing and Solar Reform Alliance. Number two on the list, the telltale sign that you think like a roofer and not a business owner. If you start thinking that I need more leads and leads are the cure to all of your problems, you are thinking in all of the wrong places in the wrong ways. And here's what I mean. For many of us, we think, hey, my business is suffering, I need more leads. Now what does it take to get more leads? Generally more money. Investing in marketing. Now, there's a lot of pitfalls with that, but I'm just going to focus right now on some very simple fundamental rules of business. See, there are four KPIs or key performance indicators that you need to be measuring. And you know what, let me take that back. I don't know what you need. Let me say this. These are the ones that I look at and have helped me double my business year over year. And they are the following. Number one is your set rate. That is the number of leads that come into the office that actually get converted into an appointment. Now, if I asked you this, what is your set rate? Most people would give me what they feel. We convert most of them. But feelings don't run a business. Data does. In my guess, if you get into your analytics, you'll find that you're somewhere in the 70ish percent range. You know, it's not difficult to take that number and punt it up to 80, 85 or 90%. Simply auditing the phone calls that come into your office or your process, hearing it, how people screw some things up because they weren't trained otherwise, and then giving them a script to fix it. And when you increase that number instantly, if you go from 70 to 85%, you just had a boatload more leads without spending even more money. But it gets better, because let's take a look at number two on the list, the KPI, which is your close rate. Now, it's no secret that most every roofing company wants to increase their close rate, but most folks are not operating at the optimal level. So instead of thinking, I want to get more leads, why don't you shift your mindset to I want to get more juice from the squeeze. I want to set more appointments and convert more of those into sales. Now that's again done with training in a sales system. Number three on the list, this is your average sale price. Now, many people don't know this, but you can take your total sales divided by the number of customers you serve, and bingo, you've got your average sale price. You can increase this by finding the right neighborhoods to get into, increasing your pricing, offering upgrades or upsells. And that right there alone is just tiny little tweaks that you can make. Now, the folks at Sumoquote shared with me because they had incredible data from running nearly a billion dollars of proposals through their tool that folks that added an upgrade option increase sales on average by 10%. So your $20,000 roof becomes 22,000. I know not everywhere has roofs and that expensive, but you can apply this to the average sale price you have. Now, the fourth and final metric on this list is your customer acquisition cost or your CAC customer acquisition cost, which is for every marketing dollar you spend. How many customers do you get? Okay, and you can factor that by figuring out how much you spend on marketing divided by the number of customers you have. Therefore, you have your customer acquisition cost. And when you are able to drive that cost down, down, that means that for the same amount of money you spend, you can get more leads. This is all done in a holistic view, systematically, from increasing your set rate, your close rate, increasing your average cart value, and having better marketing practices. All of that will allow you to again get more juice from the squeeze. Which means if you look at those Numbers, your set rate, your close rate, your average sale price, and your customer acquisition costs, and you intentionally increase each and every one. You can nearly double your business without getting more leads. So stop thinking that more leads is the answer because you need to refine your machine first before you go looking at buying more leads. It's a higher ROI and a better practice to truly allow you to scale in the future. Number three on the list, hiring cost me nothing if I pay commission only. I know so many roofing companies that have said to themselves that hiring like it really doesn't cost them anything. They'll bring anybody in, give everyone a shot. In the old days, we used to call it throwing mud at the wall and seeing what sticks. Now there's a time and a place, by the way, for group interviews. They can be very, very effective. But group hiring in and of itself, I'm not sure is the best answer. Because with group hiring, you don't necessarily have a pulse on who's set up to succeed. So you end up bringing in all these people. And usually those companies have really, really, really high turnover. Now, we went into this topic at our RS members only event. It's a two day workshop. We ran a recruiting roundtable. We had one of our members, by the way, who brought 13 people to our event last year. They came back this year with every single person on their team except one. They lost one person, but they gained three more. And we started talking through what does it actually cost you to hire someone. Now, whether you're a solopreneur, meaning you're wearing all the hats, or if you have a small team or a big team, you are either paying someone else an hourly rate or you are earning an hourly rate. Now you got to factor in how much time does it take for you to write the ad, run the ad, pre scan candidates, reach out, bring them in for an interview, interview them, offer them a position, just that alone has time attached to it. And for every minute of the day, there's, there's money going out. And we can figure out by the way, at average in our vendors, about 12 to $13,000 just to get someone in the door. So if you start thinking through this, if you lose 10 people in a year, that's a $130,000 gaping hole in your business. Now what I didn't even factor in is the time that it spends with onboarding them, even doing all the paperwork, arming them with their shirts, their business cards, getting them added into your CRM, which ups your cost of all of your Overhead and whatever tools and software they have, getting them trained, the time it takes for training, all the hand holding. And if you add that part in, that number usually triples. Which means if you lose 10 people, you have over a $300,000 gaping flesh wound in your business. So if you think that hiring doesn't cost you anything because you're paying commission only, my friend, think again. You need a recruiting process in a system to bring in people who are set up, who are prepared to succeed mentally by being the right fit, as well as the systems to onboard them. In fact, this picture right here shows the top three fears about recruiting. Now, these fears about recruiting, they came as a following. We had 84 roofing companies in the room at our annual workshop. Okay, 84. We got into small groups and everyone shared all of their fears. And what happened is, okay, so we got everyone together and then we got them to share them. We ended up with a list of 13 unique fears. 13. We had everyone vote on their top three. And there you have it. That is the top three fears of 84 roofing companies when it comes to recruiting. And you're going to find, as you look through this list, how many problems do you actually see? Because to me, I really see one. And that, my friend, is lack of a recruiting system. Number four on the list. As an owner, I should still be selling because I'm making all this money. Owners frequently come to me and they share with excitement that when they sell, they get to collect, quote, unquote, all the commission because they're not doing splits with their salespeople. So some people say, hey, well, I'm making 30% commission on my sale. Well, let me tell you a story of a roofing company owner that I spoke with. He had a roofing company that was doing $12 million a year and was proud to be making $1.7 million a year, which by the way, is fantastic income. But then he said to me, I am selling $3 million a year myself and I get about 30% of my commission on those, which means he's making $900,000 a year on just his commission. Okay, so we pull out the 3 million. He went from a $12 million year company to a 9 million dollar year company. And if we take the 1 million 700, we pull out the 900,000 in commission. What's left is he's making $800,000 a year on a 9 million dollar year roofing company, which means he's netting less than 10%. Which goes to show you this, this Particular owner has a problem because his roofing company isn't quite that profitable. In fact, it's losing money in likely many areas. When I say losing money, I don't mean like in the red. What I mean is they are hemorrhaging cash in certain areas. They're too overhead heavy, maybe they're paying too much in commission because the owner now has a very high paying job. By the way, there's nothing wrong with having a high paying job. However, by removing his sales, we get a holistic look on his business and his business on his own should he wish to sell or exit. So isn't that valuable when he's removed from it because he's making a large percentage of the sales and his income is more than half of it is from his own sales. So as an owner, it's important to get yourself out of selling to build a financially healthy and stable company that can grow without you. So whatever point you decide to exit, which you will exit your business, it's just, are you going to celebrate or are you going to cry? And my hope is you have a business that someone would want to acquire, so, so you can celebrate. Number five on the list. I can't keep people. If you struggle with keeping people and having high turnover, there is a very fundamentally simple question you can ask yourself that will change all of that. See many roofing company owners or leaders, they bring people in and it's like, hey, I did it, so can you. And they have a unknowingly selfish view of the world. Like, hey, you can help me grow, you can help me make money. And by the way, I did this in whatever you put in, you'll get out and you'll make life changing money. But that's not how people think. If they thought like that, you know, they'd go start their own thing. So you need to ask yourself this one simple question and I would write the answer down. Why should you want to sell and work for me? What's in it for you? And when we start having this approach to investing in our people, in creating a culture that people want to be a part of, we get to create what many of the roofing companies in the Roofing and Solar Reform alliance are doing. And by the way, sharing how inside our community. That's a beauty of value alignment. As people peel back the curtains and share their winning secrets to help other people get ahead. And they share their system for doing this, their weekly training schedule, their onboarding process, who they look for and why we're able to do hiring Ad Live critiques inside our community, sharing roundtables again on where we find talent, how we're recruiting them, bringing in experts like Jonathan Wissman to present on the topic. By the way, he runs a company called who Hire. The dude is an incredibly talented person recruiting. He wrote the book the Sales Boss. This is the type of conversation that occurs so you can learn from other people. So I want you to do this right now. Write down the answer to this question. Why would someone want to work for you? And if you can't hand that to a complete stranger and have them read it, be like I want to kick down your door and work for you. Then my friend, that is the problem you're having. So there you have it. Those are the five big red flags that you are thinking like a roofer and not a business owner. And by reframing these five things, you my friend are going to start running a business that just so happens to do roofing so you can take your business to the next level and survive in 2025 and beyond as we all experience the struggles and changes that are inevitably happening now. If you are someone that wants help with your recruiting and your hiring and all of that, in my free training center there's a link below. I've brand new checklist, a pay plan checklist, a recruiting checklist, sales training checklist that are free. There's no catch. Get them in the link below or go to adamsfreestuff.com right now. Hop into this next video because I'm going to show you the nine ways to build and keep an incredible sales team. Thanks for joining me in this video and I'll see you in the next one.