Top 11 Bankrupting Mistakes Roofing Companies Are Making Right Now

Here are the top 11 business killing mistakes that will run your roofing company into the ground and could run you into bankruptcy. I'm making this video to help you become aware of these mistakes. You can run a healthy and profitable business, support amazing people and serve even more customers. Now, I didn't make this stuff up or pull it out of a hat. I've had the opportunity to work with countless roofing companies and day to day in the Roofing and Solar Reform Alliance. I work alongside hundreds of them in our private community discussion board in live interactive zoom sessions. You even see them at our annual in person event. I've seen it all from companies that are just getting started, literally just filed their LLC to quite a few of some of the big dogs in the industry doing tens of millions of dollars in revenue every single year with teams all across the United States. Now, almost all these companies have at some point struggled with one of these 11 mistakes and I hope they help you navigate your growth so you can kick some butt for the people that you serve and do it the right way. Before we get started, Adam Bensman here, founder of the Roofing and Solar Reform alliance and everything that I do here is designed to help roofing teams, just like yours, outsell, outgrow and out compete the rest so we can stomp the scum out. Now 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 mistake number one, the big one. Cash flow. Cash flow is the main reason that roofing companies go under. Very few make it even to the five year mark. I've heard this anecdotally and I haven't been able to fact check it anywhere but through some investigation in conversations that I had in Oklahoma City, the average lifespan of roofing hemi is just 11 months and I don't believe 50% even make it to five years. Cash flow is the number one reason and that is Ars accounts receivable not keeping up on the money. Some of these other mistakes will lead to cash flow problems, but that'll hit number one. Number two, no training and specifically sales training. It's very common for young companies to start up and just do the classic look over my shoulder, ride along and watch how I do it. But what ends up happening is I call that the telephone tag game of training. What where this guy trains this person, this person trains this person, this person trains this person, this person trains this person and then you look back from what was trained here and it's very far stretched from what happens over here. There creates complete inconsistency. There's not a reliable or consistent process and before you know it, people are not really being trained. It's go figure it out on your own. I did it and so can you. It is not scalable and it sets people up to fail. Bringing me to number three, no SOPs. SOP stands for standard Operating Procedure. In other words, no systems and processes. Imagine if you got hit by a bus tomorrow. Would your business run or would it die? If your teams don't know how to handle or process a job, that is a huge red flag. You need to have systems and processes to build your business so it can run without you and it can run efficiently and take care of people and you can grow and you can scale and everyone works as a team to help that happen. That's the first process by the way. Developing a process before you can even start looking at pay plans. If you need help with that, I walk folks through it in one of my trainings. It's called Build. You'd dream team. But we actually put together the process of processing a customer. It's the very start of a very deep SOP and it's available to members of the Roofing and Solar Reform Alliance. Jump into number four. Overspending on marketing. Big dreams and big wishes that are often like that million dollar taste but you don't really have a million dollar budget. So many people will overspend on marketing. They say hey, well I want the website. I'm going to spend money on leads. And they over invest in these areas thinking that it will bring an immediate return when it doesn't, oftentimes due to lack of having a sales training in place. So the leads that come in, people know how to close. A lack of processes where people don't know how to field the inbound appointments and convert them into an appointment and qualify those leads. By the way, I walk you through this. RSRA members get my inbound call script and training for your staff to do all that so you don't have to do it. So again, overspending and marketing without that infrastructure will lead to you hemorrhaging a lot of cash without much to show for it. All right, Bringing me to number five, poor investments. A lot of new company owners will come to me and say hey, you know we're going to get started. But right after I get my website done or my truck wrapped on, I'm like dude, you know truck wraps are great. They're cool. In an ideal world, you'd have them, but starting from day one, do you need a fleet of five vehicles? You need them all wrapped. And do you need to buy platinum trucks? You know, probably not. So again, this is what I mean by poor investments is putting money in a place that when you start to think, is this one, solving a problem? And two, will this provide an actual return or an immediate return? Because new companies get themselves in a world of trouble on vanity things like a billboard, a really baller office truck wraps, yada, yada, the works. Number six, sales reps who call the shots. Sales reps oftentimes, especially in the old days, when I say old days, the pre FLSA law that went into effect, if you're unfamiliar with that new law that took that regulation from 1099 and W2, meaning employee, and made that gray area gone. Virtually all salespeople by law need to be employees. There's really no way around it that I've found or the attorneys I've spoken with. Of course, you may have had different results. I just believe what I believe from analyzing the law and speaking to various attorneys that I trust, including one that has been in doing this for 30 years and has never once seen a winning case of employee misclassification. That was before the law got strict. But many folks that still have 1099, they want to toe the line. They'll say, hey, well, I can't tell my sales reps what to do because they're an independent contractor. They end up calling the shots and running the business. Or they'll say, hey, well, I'm only going to work on these days or in this format or I want this new responsibility. And sales reps who run the show, they end up running the business and not you. And that leads to lack of management direction and ultimately poor performance. Number seven, owners that start solving the wrong problems. Now, in business, our job is to create new problems to solve. It's one of the reasons that I founded the roofing and solar form Alliance. Companies would buy my sales training and then we'd solve problem one, which was I need to one have training. I don't have time to train. I don't want to reinvent the wheel and need my team performing self generating leads and closing sales. So we solve that problem by providing training, but then we create the next problem which is, hey, I want to grow a canvassing division. How do I pay my sales manager? Who should I promote to? Sales manager. I want to expand into this new market. Hey, I want to add solar Or a new product line, Hey, I need to renegotiate my pay plans because we've grown and we're now changing our model. So all of these next problems that solve what we need to start thinking is which problems are gaping holes and which ones are tiny holes and put our time, money, energy and resources into the right problems. But many owners start solving the wrong problems because they're shiny objects. They pour again, poor investments and poor time into these areas that aren't really solving the key problem and they're solving the wrong problems in the wrong order. When a smart business owner puts blinders on, recognize that there's always going to be a little bit of chaos and some problems, but I need to focus on solving the right ones first. Number eight, Growing too fast. Now, there are some companies that have had explosive growth. In fact, Cody Cody Landell is a fellow mentor in the Roofing and Solar Reform alliance. He reached over 10 million in sales in his first. I think it was rolling in the tail end of year two, rolling into year three. He is three and a half years in business now and doing between 2.6 and 3.6 million a month in sales. But to get to that point, he had growing pains. However, he was meticulous about the production process and it doesn't say that mistakes don't happen. It's roofing they do. But he was able to do it and he was able to preserve his cash flow in his systems to do it well. It's one of the things he brings to the leadership team inside RSRA and to all the members. But for many people, they scale too quickly, they grow too fast, they outsell production, they outsell their cash flow and they end up creating more of a problem than a solution. Because as much as I believe that you can sell your way out of many problems, you definitely can't sell it out of all of them. And you can sell your way into new ones. Number nine, and this one is incredibly common. It is being way too overhead heavy. Overhead is every single penny it takes to keep the lights on, the office open, the phone ringing, people paid, insurance, all of that. It is very easy. And I see it a lot, specifically with overstaffing people that say, hey, I've got a sales manager. I'm like, but you have two salespeople. You don't need a sales manager that also have an office person, production and a supplement and all these different department heads, but there's no department underneath them. Be very careful about getting too overhead heavy on your software, your expenses and Specifically Your personnel number 10. Also one of the most common ones, owners that don't know their numbers. If I said to you, how much do you spend each month on marketing? If I asked you the question, what is your customer acquisition cost? If I asked you the question, what is your close rate? What is your average ticket price? Does anyone know the answers to these questions? How much is your overhead every month? What percent of your overhead? What's your net profit? These are very, very, very simple and rudimentary questions. But a lot of folks that get into this business, they get wrapped up in the day to day, grow, grow, grow, grow, grow. That they don't think of their business as a business. And at the end of the day, to solve the right problems, you just look at the data and figure out what problems you can solve. There's four key metrics that I like to look at that run my business. That's the set rate, the close rate, average ticket price and the average customer acquisition. And when I know how many people we talk to to set an appointment or knock doors or leads that come in, how many of those do you close? How much do they buy and how much does it cost you to win that customer? We can now figure out where in our business we need to focus. Of course there's a lot more metrics to focus on. Those are the four that I believe from a simplicity standpoint, give you a snapshot on your business to navigate growth and growth decision. And this leads me to number 11 and that is staying in the day to day far too long. If you're an owner who is having a hard time letting go, you're driving around in your truck, you're in charge of managing the team, you're in charge of production, you're answering the phone for customers, you're still doing a little bit of sales. This is a dead end position and you will forever have a high paying, maybe full time job, but you'll never have an actual business in a business is a business that produces over a million dollars a year of profit or EBITDA and that runs without you. A business that someone would want to buy. Get yourself out of the day to day and for many of the ADD or ADHD business owners, get yourself an executive assistant or office support to start and start hiring in places that free up the most amount of time. Time is the valuable resource that will allow you to invest back in your business. Once you do that, you can then hire the next position and for most that's the assistant. So there you have it. Those are the top 11 business killing mistakes that I see now. If you're someone that wants to grow a really profitable, successful business and you see the value in learning from others because you want to stop going at it alone, you know that the information available on the free Facebook groups and all that is just scratching the surface of helpful. There's some things that are questionably helpful and you don't really know how well equipped these folks are to be giving you advice. Then consider joining us in the trenches. You don't have to go through it alone and participate with some of the industry's best mentors. You'll join me in there. You'll join Daeshaun Bryant, Cody Landles, John Cenac and Jim Alleen alongside a powerful group of hundreds of contractors who've done everything that you're trying to do. They've walked in your shoes and can help you solve the problems that you're facing right now and the ones you'll face tomorrow and then next week and the week after. So you can get direct answers and coaching through these growth problems today and not solve them on your own and figure out if they work in a few weeks. And if that's you, then I invite you to join me in the trenches in the most powerful network and get the ultimate toolbox. It's available exclusively to members of the Roofing and Solar Reform Alliance. It's not for everyone, but you can click the link in the description to learn more or apply to join. Hey, thanks so much for joining me in this video. I got more specific content for you, the owner of a roofing company, in this next playlist, so we're going to hop right into that. And you can also jump into our free training center. There's more in there for owners and managers alike. There's no catch. Hey, thanks for joining me. We'll see you on the next one.