How to Write a Roofing Contractor Business Plan

How to Write a Roofing Contractor Business Plan

Quality Business Plan's writers have found that the roofing industry is experiencing a growing trend for several reasons, which is driving demand for roofing contractor business plans, roofing business plan templates, and roofing proforma financial models.

First, an unfortunate reality is that there have been more natural disasters throughout the US, like forest fires, hurricanes, and snowstorms in the last several years as compared to previous decades.  These natural disasters inevitably lead to roof damage.  As a result, the more damage done, the more roofing companies needed.  Also, the number of homes built and remodeled across the US has been growing at an above-average pace thanks to low-interest rates.  This new construction/remodeling also drives the demand for new roofs, which again leads to the need for more roofing companies.  However, as new roofing companies enter the marketplace, or, established roofing companies seek to grow, inevitably, the need for a roofing business plan, or a roofing business plan template, is almost unavoidable.  From this, our roofing contractor business plan writer has come up with some tips and tricks to embrace and practice when writing a roofing contractor business plan (10/21).

 

 

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Executive Summary for a Roofing Business Plan.

The executive summary section of a roofing contractor's business plan should start in a similar manner as other construction companies.  Specifically, a roofing contractor's executive summary section of its business plan should identify the company’s name, legal structure for the business, as well as geographic area serviced, whether it be a specific mile radius from the office or specific cities/counties serviced.  Further, a roofing contractor should also specifically disclose their core competencies in relation to roofing products.  For example, some roofing contractors specialize in shingle roofs, whereas other contractors’ niche services include metal or even tile roofs.  By setting expectations related to the company's core competencies for services upfront, contractors are able to quickly differentiate their services from other competitors (1/22).

Company Information for a Roofing Business Plan.

The company information section of a Roofing business plan should start by explaining the problem that the company will solve for the client, then address the “Who, what, where, when, why, and Hows.”  To illustrate, a common problem that a roofing company solves is that when a roof deteriorates, water leaks inevitably happen.  Once water leaks happen, then not only will the customer need to replace the roof but also ceiling damage, truss damage, and even insulation deterioration.  By starting off a roofing business plan by identifying a problem, our business plan writer has found that justifying the needs of a roofing company is a lot easier.

Also, surprisingly enough, homeowners often prefer to do business with roofing companies in the local area.  From this, make sure to include your location, street address, city, state, and location section of the roofing contractor business plan.  Further, our business plan writer recommends including a picture of a map with your location identified.  This practice helps to accentuate the fact that you are a local contractor serving community members as compared to a regional player (10/21).

 

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Product Description for a Roofing Business Plan.

The product description section for a roofing business plan should include traditional information such as a description of the types of roofs sold to customers as well as their product selection like shingle roofs, metal roofs, or tile roofs.  Further, our roofing contractor business plan writer recommends discussing other services as well, such as roofing repair and roofing treatments that may prolong the life of your customers' roof.  By including all services in the product description section, the roofing contractor business owner is able to show multiple revenue sources, which helps to show a wide selection of revenue opportunities for various transactions (2/22).

Competitive Advantages for a Roofing Business Plan.

The Roofing industry has been growing substantially over the last several years, thanks to the need for roof replacements and new construction.  From this, our business plan writer has found that roofers need to put a lot of thought into their competitive advantage section for the business plan.  An important competitive advantage for a roofer would be warranty services.  Once the sale of a roof is complete, most roofers move on to the next sale.  However, other roofers may offer an annual inspection for a customer.  This annual inspection will not only increase revenues but will also help to ensure customers receive the best possible product for their money spent.  Finally, visiting previous customers on an annual basis is a great way to land referrals.

Location Description for a Roofing Business Plan

The location of a new Roofing facility is critical for the success of the business.  For the interior of the business, roofing organizations need substantial space for products and supplies.  Common products stored for roofing companies would include shingles, metal roofing, flashing, nails, and other common roofing supplies.  From this, roofing locations are often found in warehouses with about 1500 to 5000 ft.² under the roof.

As for the general location of the Roofing facility, our business plan writer has found that these types of businesses do well in locations near new construction subdivisions or older subdivisions.  By placing a roofing company in a centralized area, our business plan writer has found that roofing business owners can quickly and easily map out marketing segments as well as the central location helps with scheduling repairs and new installations.

Target Market for a Roofing Business Plan.

A common Roofing target market is are either builders or homeowners whose homes are 10 or more years old.  A roofer may target a builder to gain access to new home roofs.  This target market often leads to lower profit margins.  However, the amount of work is steady and predictable.  Targeting homeowners, roofing business owners can charge a little bit more because advertising costs are higher.  This leads to higher profits.  However, the amount of work is often feast or famine.

Industry research for a Roofing Business Plan

Based on quick research from our business plan writer, the main industry in which Roofing competitors compete is the roofing contractor industry.  This industry generates revenues from installing roofs, maintaining roofs, and repairing commercial or residential establishments.  IBIS World found that this industry has generated approximately $47 billion in the last 12 months.  Industry experts claim that the last five-year growth rate, annually, has been about 4.9%.  In the next five years, our business plan writer projects roofing contractors to grow at about a 2% rate.  In total, profits for the industry exceeded about $3 billion.  Because of the need for a significant amount of labor when installing roofs, wages for the industry have reached about $11 billion.  Throughout the US, there are about 100,000 roofing contractors.

When writing the industry research section for your roofing business plan, make sure to use this information as a foundation for summarizing the industry.

Owner and Management Section of a Roofing Business Plan

Owning and managing a Roofing business is quite different from other organizations.  This is because owners are often employees as well.  To illustrate, some roofing owners will also work on installing or removing roofs daily.  By following this process, business owners can ensure top-quality customer service as well as high workmanship.  Unfortunately, our writers have found that when business owners continually work in their business, they have less time to create marketing and other strategies to grow the organization.

Funding Request for a Roofing Business Plan

Starting in the Roofing business is actually quite expensive.  Business owners need to lease a warehouse, purchase trucks for transporting roofing material, store inventory to ensure timely roof installation, and hire and train employees to ensure top-quality roof installations.  From this, our business plan writer has found that starting a roofing company may run from $25,000 up to hundred $50,000 or more.

Financials for a Roofing Business Plan.

Financial projections and financial models for a Roofing business plan should first start with weekly or monthly roof sales or repairs.  Next, roofing business owners should align roofing material costs with insulation sales for new roofs.  Once this is complete, business owners need to address fixed costs for the business.  Some fixed costs for a roofing company may include truck payments, warehouse storage rent, roofer labor, and also any type of credit card payments or loan payments that arise from daily roofing operations.  With this complete, the business owner is now ready to complete their roofing financial projections by expanding their daily and monthly sales to an annual basis.

Hopefully, these insightful tips and tricks for writing a business plan were helpful.  As always, if you need help with a business plan or financial projections, just send us an email or give us a call. 

Phone: 321-948-9588

Email: Paulb@Qualitybusinessplan.com

 

Author: Paul Borosky, Doctoral Candidate, MBA., Author

Owner of: Quality Business PlanQuality Business Consultant

Date: 1/12/2022