In this video Adam Sand, CEO of The Roofing Business Partner, explains what true scaling means for a roofing company and how to grow revenue faster than expenses. He contrasts common misconceptions—simply adding staff or doubling sales—with a disciplined approach that focuses on revenue per capita. He introduces a “golden rule” benchmark of $650,000 revenue per employee (per $85,000 salary) and breaks down the cost structure (COGS, labor, materials, marketing, customer acquisition, overhead) that leaves roughly $260,000 per employee to allocate. He distinguishes capital expenditures (CapEx) from operating expenditures (OpEx) and argues that roofing firms tend to over‑invest in OpEx (hiring) while under‑investing in CapEx (technology). He then shows how leveraging technology and AI can automate data‑heavy tasks (calls, note‑taking, task creation) to reduce labor hours, improve data quality, and ultimately raise revenue per capita. Real‑world examples illustrate revenue per capita ranges (125k‑250k for struggling firms, 650k+ for high‑performers) and how incremental improvements—cutting customer‑acquisition cost, optimizing material purchasing, and automating service workflows—can move a business toward the 700‑900k per‑capita sweet spot. The video ends with a roadmap: measure revenue per capita, audit expense categories, invest strategically in technology that reduces manual steps, and let AI handle routine interactions, thereby creating a sustainable delta between revenue growth and expense growth.
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Everyone talks about scaling a roofing business, but most don't really know what it means. I'm Adam San, CEO of the roofing business partner. In today's video, I break down what scaling really means, how to grow revenue without blowing up expenses, and how top roofing companies use AI to hit 800k plus per capita.
It's important for us to talk about what is scale. And I found that the best way to explain scale is to actually use visuals. So as your business grows, it tends to grow in ways like this. But if we zoom out and flatten that a little bit, your business is going to generally go up, is the expectation. You're also going to have your expenses go up over time. So your expenses are generally pretty minimal at first. Because when you first start out, if we zoom in, you know, over here, you have almost no expenses, right? You're all running out of your home. You're using a vehicle that you already own, you got a capital one credit card, you go out and sell your first roof. You might not even have a website. But for the most part, over time, your expenses are going up generally at the same rate that your income is. And so a lot of times when I hear people talk about scale, they're just meaning they want to scale. Like they just want to get twice as many employees. All that really means is that you're just moving time and money forward. So comparatively, what that might look like or what people generally mean when they're saying I need to scale is that their business is growing and their expenses have been growing, and then they want to create this in their business. Now, what ends up happening, this is what happens, is that all you're doing is pulling time and money forward. You're just pulling that backward. And that's not the true definition of scale, because this gap remains. And so when they get here, what happens is they say, you know what? I talked to somebody, a coach, a consultant, a guru, and they say, I want my business to do this. I want to double my rate of growth. The thing that happens is this, where all of a sudden expenses are growing at a rate faster than income. And this is dangerous. This can happen for a number of reasons. That is when business gets scary and we have to prevent that. So that's why wisdom begins with the definition of terms. Because now what we're going to talk about is what scaling actually means. So you're growing like this, and your expenses are growing like this, but we find a way to create this. And so the gap from here to here is Much different than the gap here to here. What this is is the expenses grow at the same rate, but the growth of the business grows at an increasing rate. How do we do that? The that is literally the million dollar question. How do we do that? The one metric that it helps to be thinking about when we're trying to accomplish this as a goal is to think in terms of revenue per capita. So let's say the time frame on this is 10 years and this is growth, right? You can call this compound annual growth rate. Your growth rate increases, but your expenses stays the same. Well, in the more zoomed in look, your business kind of good does this. We'll call this revenue. We'll call this the delta of of time. We're going to go 3 million, 8 million. And so there are time frames that you go on which we can break this down into blocks of time. So it is possible for businesses to double every 12 months or so. And it happens. But the business growth tends to look like this. You get to like 3 million at like year two, but then you level off and then maybe you start growing and you get to 8 and then you start growing and you get to 15 and then you start growing. That's more the realistic look as to how the business grows. And that's why it becomes very tricky to manage that expense line, which tends to like kind of follow along, maybe go up, comes down, stabilizes, starts to go down a little bit, you start growing, there's a spike, right? And then it tends to end up looking something like this. Where these deltas can sometimes be scary. So, so then we have to be like, well, what are we spending our money on now? This is basic finance, but there's CapEx and OpEx. So capital expenditures, loosely defined, is investing in the future ability and OPEX is paying for your current ability. It is very easy for roofers to spend money on opex. It's safer because it's usually incremental. It's $50 a user or hiring an employee every day. Or I talk to roofers about talent acquisition every day. They want to hire a person, right? They're trying to say, okay, I need a person for this. I need a person for that. I need a person for this. My production manager is busy. I need to hire another production coordinator. Now as the roofing industry goes, we're very afraid of capex. I think it's important to have a discussion as to like, why is that? Because a factory thinks very differently. A factory is absolutely focused on capex and everything is about Reducing opex, they could think completely different in manufacturing. Manufacturing, you know, you make these capital investments in theory one time with minimal maintenance. Opex, you invest less over time, but it tends to creep. This is why we have to focus on revenue per capita, because we start to measure our decisions. So the golden rule for revenue per capita for roofing company. So it's 650,000 per capita, per $85,000 in salary. So 60% of your revenue, pretty much always without the ability to change it much, is going out the door for labor and materials. So takes out 390,000. So that's your cogs. You can't really do much with that. I mean, you could drastically underpay your subs and lose them. You can do stocking your materials, go buy in bulk. You can bring that down a little bit. You can get that 390 down to 350, 320, but not a huge amount that you can do. So what do you have left? You have your 260. This is what you're left over to make choices with. Some businesses are 125, some businesses are 250. I am barely surviving at 125. I am rapidly thriving at 250. 650 is a dream for my business. But I don't have one thing that you guys do, which is that I don't have a guaranteed fixed cost generally of labor in my cost of goods sold. I'm basically struggling at 125, and I'm doing really well at 250. So you can see that this is not that far off from where I am. This is the dream. If we can get our business to 260 after our cost of goods sold, it's kind of like any other business because then you have to think what comes out of this, right? We have to think where does our attention. Well, from there, you have your marketing, you have your sales commissions. So right away, you group this together into your cost of acquiring a customer. Usually this number is around 15% of revenue. So if we take that 650,000 times that by 0.15, boom, we just lost another 97,500 in our cost of customer acquisition. Pretty serious number to think about. How can we get that number down to 10%. But then you have other things that you can't do much about. And I'm just going to rattle some of them off. Shop space, insurance, software, production, management, general and admin, bad debt. And then these are the things that whittle you down to hopefully 65,000 as a minimum and 130,000 as a maximum. Per capita, per $85,000 in salary paid. The fastest way to get your revenue per capita to go up is, is to make your per capitas go down. If you have two people in your company that are making collectively 170,000, then you should be making about 1.3 million. Well, if you just fire those and get down to 1, well, then, bang, you just went to 1.3 million revenue per capita. But the fear, of course, is that, you know, you have a roofing guy, and then you have a sales and business guy. This is essentially how most roofing business partnerships are created. If you get rid of your roofing guy and you just have sales guy, well then who makes sure that the work is being done right? So you can't just like hack heads like that when it's 50% of your company. You have to figure out how to control this and how to control this to get to your number. The thing that I see as being a huge opportunity when thought through properly, is using technology as a leverage. But there is places where technology becomes a hindrance, because there are two things that are kind of opposing when we're talking about technology. As the requirement for good data goes up, that means that the efficiency of the employee creating that data tends to go down. So this is data, and this is efficiency. This is why you want so many automated things happening in your business. Because if you have a task to make a call, and you have to dial that phone number, and then you have to take notes on paper, and then you have to create a note in the CRM and then you have to type the note right, this just becomes like you want the data, you want the note that did it. This is where technology becomes a hindrance is if you don't find a way to reduce the number of actions that are needed to get that good data. Because the value of good data is huge. But it would be better if you have a task to make a call, but you can eliminate the dialing by clicking a button. And then you can reduce the taking notes by having a recording. Because usually you have to type a note. And then, I forgot to mention, usually have to set a task, right? What do you do next? So then you still have to set a task. Where I see this going next, the companies are going to win next is you don't have to recognize you have a task, you're just going to have a list of calls and then the recording, right? Which you don't have to do, right. According as happens, and the task is going to set itself so then you still get all the same data that you get in this path, but you're going to have less work. And then what happens next after this is AI makes the call, it records it itself, and it tells itself what to do next. So far, going from this to this has been good enough. What I'm seeing is that this is becoming the next thing. And this exists everywhere. Why do we do this? Data can just be another word for service, right? As the service goes up, the efficiency goes down. If you're expected to give the customer good service, that means when you reschedule a job, you have to call and let the customer know that you rescheduled the job. You want to keep the customer in the loop that you rescheduled the job. And if the customer is not okay with that rescheduled job, they have to call and tell you. And then you have to go through the work of rescheduling the job so that it's the right date. So when does do we get to the point where it's just if rain something reschedules the job and lets the customer know, and then maybe you or eventually some kind of agent just handles the edge case that that reschedule isn't good enough. This exists everywhere in our business. That's how we create massive improvements in revenue per capita. The best I ever seen a company do was 1.1 million revenue per capita. But things started to break and they settled in around 900. Massively profitable company. Most RBP customers settle in around 700 to 800. Takes some time to get there. And there are periods where revenues like this and expenses go like this along the way. But eventually, once everybody starts doing their job, it goes like this. And we create that delta right between these two things. So that's how we determine whether investing in technology is a hindrance or a useful place to put our attention. But it's all based on the reliability of our assumptions.
