Larger business or smaller

Hi, I started my own residential roofing company from scratch in 1996 at the age of 28. I had already been roofing since 1984 so i had 12 years in the trade. Never did any other type of work in my life and now im 41 yrs. old. Well, i find myself in a strange position after 25 years of roofing. I've ran the business a lot of different ways, experimenting with it. In the beginning it was just me and the wife answering the phones. I tried many times in the early years to find some decent sales help to no avail. ( went through several i had to let go ) Later on down the road i find a halfway decent roof salesman and a repair salesman. Over the years the expenses have grown probably 3 times more than starting out. Maybe more than that. The repair salesman quit about a year ago and i've been doing that part myself again since. With the economy the way it is i find myself struggling to pay the company bills on time. And i have learned that it can take a long time to try and downsize a roofing company just like trying to build one up. With the stiff price competition its getting to where it just isnt very profitable anymore like it used to be. My yellow page rep came in the other day to meet with me for the upcoming editon of the phone book and i had already told her i have no choice but to cut my advertising budget in half for the upcoming year. But she refused to lower the prices by hardly anything at all. Even when i was willing to lower my display ad 3-4 sizes lower down. This has reallly ticked me off. lol They helped grow my business but now i have a 15 year customer base. About 5 Thousand referring customers. Or at least most of them refer. Im thinking about dropping the ad to just an in column with no display and using other avenues of advertising for new customers to go along with our referrals and existing clients. But i really dont know if i will have enough work if i do that. I know i wont need quite as much work but i do still need enough to make a decent living of it. I need at least 2 roofs a week and a few repairs. Has anyone else ever been put in this postion or have anything helpful to share about such situations? Thanks!!!>>>

Willie,call me.845-656-4912>>>

If the object is to make money, get smaller and do the work with one crew and yourself. Raise the price until you make as much as you want, If the object is to employ a lot of people and have a lot of headaches, advertize and spend it all. It will be gone soon enough.>>>

---Dropped my Yellow page ad some 10 years ago. It was a nuisance as I got calls up to 30 miles away wanting a bid. Those were tough sells and I hate selling. Some bids took 2-3 hours and I got very few. ---I suggest local small papers in areas you prefer to work in. They are cheap and you can track the results and drop what doesn't pay. ---Get some real estate agents to send you some work order jobs. I have about 4 agents that send me work. I get them a bid within 24 hours and give them top service. They want someone who will fulfill the work with minimum hassles so I meet all deadlines and make things happen. You might visit some offices and leave some business cards. ---There are online referral services. I tried one that was a bust called, "Handyman Online." I am thinking of trying a different one that has been sending me trial leads. They sell the leads and leave you to sell the jobs. I can deal with that. ---Update webpage. ---Join a local businessman referral club. I used to belong to one years ago. I got too busy to continue but I did get quite a few roof jobs from that group. We met for breakfast 2x/month, shared business news and shared leads. The group was made up of a variety of trades. There was only one person in each trade (so as not to compete with each other.)I should still belong as now it would really pay off. Isn't one group called Le Tip' or something like that? ---Make sure your supplier is sending you leads. This should be automatic but it pays to mention it and provide business cards. My supplier sends me leads as I am sure he does to many. I want to get my share of leads he receives. ---Make responding to leads top priority. Sell sell sell. ---I prefer to install roofs. I hate paperwork and selling. But I am forced to sell to survive. A friend of mine is a top salesman. He went with me to a sales call and observed. Afterwards he gave me a lesson on my mistakes and omissions...then a lesson on what NOT to...I realize that good salesmen operate with certain attributes, techniques, and principles. They can be learned. There are loads of "How to sell" books at the public library. There is just no excuse for being a mediocre salesman. Besides I hate it when someone gets the job I have bid on because they had a better sales call and beat me with gimmicks. There are so many hokey things roofers emphasize to make themselves sound like they are offering higher quality then the competition. ---This might be a good topic...where to find leads...

Good luck, Lanny>>>

Willie.... you are bouncing around quite a lot. Trying things that just don't work out for the long run. Lots of success, weighed down by lots of setbacks.

Call Serrano>>>

Sounds like i need to call Serrano! lol Actually Serrano and I talked a while back about increasing business but that is not where my mind is now. I'm wanting to lower all the costs down so i dont have to kill myself trying to cover everything. Twill your exactly right. I've had lots of success and setbacks. Made a lot of money in 2001 and 2005 but those were really the only two years ( in 13 yrs time ) that i really made a lot of money by doing a lot of production. 2001 was a straight line wind storm clocked downtown at 99 mph. and blew shingles off roofs all over the metro area. 2005 was due to two hurricanes ( turned tropical storms by the time they got to my area 250 miles inland ) but a lot of damage none the less. I also had three years where i lost money and went into debt. And then 8 normal years where I made a decent living of it, more than i could make working a job for someone else. So i guess you could say im 10-3. lol The last two years are two of the three bad ones and hit me back to back. 2007 drought and 2008 and now economy. We had some small storms here this spring and were wide open for two months. But now its back to reality. Nothing but a few repairs. I am simply paying out too much money to not have much work going on. Im going to just place an incoulmn 2 inch by 2 inch ad and thats it for the real y.p. I may go with a less than half page ad in yellow book. And theres another small book thats affordable. Then do proximity direct mailings. And of course there is our customer base and referrals. I gotta get off this merry go round with the Real yellow pages. They jack you up every year. I started 13 years ago paying $75 per month and now its $2,700. Quite a swing. It pays for itself when things are busy but thats about it. When we have storms i should have work anyways because this business is "weather dependant" ! Thanks for the advice everyone! I am even thinking about moving out of my house into something half the cost. And maybe letting the office go at some point. I've learned there is only so far I can/should go in this mad game called residential roofing.>>>

I had to Drop all of my Yellow Page Advertising this past winter due to the same BS. I used to spend ,$3,400.00 per month and then lowered it to $2,400.00 per month last year and completely eliminated it this year.

With my website and referrals, I am still getting nearly the exact same totals of leads getting called in, but I am still having a tough time making ANY Sales.

Get a good website, which after it is up and running, will only cost you about $10.00 per month for Hosting.

So, good thing I don't have the $3,400 or $2,400 per month bill anymore, because I would really be screwed to keep up with the payments.

Once you get a site up, you need to submit it to as many FREE directory submission sites as possible.

You can learn a real lot about SEO on other forums that discuss that on a regular basis but for Contractors who are having success with it, www.ContractorTalk.com (www.ContractorTalk.com) has a ton of information in the Technology sub-forum.

Now, all I have to do is start closing some jobs and I will do okay. I hope all of the low-balers are finally getting too busy losing money on each job by now, so I can compete with real contractors.

Ed>>>

Whatever it is Willie, you can't keep repeating the same mistakes. The School of Hard Knocks rarely graduates anyone :dry:>>>

The mistake seems to be paying out too much money to end up with too much kill time work to do,( a.k.a. "Free Estimates") combined with having to pay out too much money in salaries and payroll taxes, etc. for people to half azz do it. When i did it all myself i made good money. But im not getting any younger, however i can still handle it at a reasonable pace. I tried to grow this business thinking that was what i was supposed to be doing. Advancing as the years went by. I guess that was just grandiose thinking evidently. The only ones advancing are AT@T Advertising Solutions and the rest of the like.>>>

I started my business at about the same age as you(25), but almost 20 years earlier. I've always only had a column yellow pages. I went many years with me and 3 to 6 guys and no office or sales staff.

Then in the eighties things just exploded as far as demand. I would interview builders wanting me to see if I would add them to be my customer. Maybe it was because I only did tile, but 9 or 10 roofers is where I hit the ceiling (vollume wise) that I could do. Above that level I wouldn't install very much more tile, only add headaches.

But I still had visions of grandeur, so I started distributing tile to roofers and builders and moved into a warehouse and bought big trucks. That went strong for almost 10 years, but in the last couple, there would be months when I would lose money, but still be busy with repairs and more complex jobs. But my overhead was set up to move lots of material and I wasn't in a position where I could do the type of things I do now and cover costs. I have 0 tolerance for working and not making money even for a few months, so I changed everything.

I I sold four trucks and bought a place that could function as both house and shop (but not a distrubutor) and have a payment under $800 a month, my old house payment and warehouse expenses were over $4,000 a month. I use 1 to 3 roofers anymore and do over half of my work billing by the hour, removing a lot of risk. I can weather a slowdown easier than I can handle a surge of business (I hate it when that happens). I would actually enjoy the recession if only I had the confidence in the future to go out and buy some toys now that I have time to use them.>>>

Sounds like if we want to "roofing CONTRACTORS" We should go and join roofers success international. If we just want to enjoy life and work at our own pace we should be "roofers' and roof. Just my thoughts!>>>

Thanks guys this is exactly the stuff i needed to hear to have the courage to get these monkeys off my back. Im sick and tired of working like a dog just to give most of the money away to people who are not! I do have them to thank for the customer base that i have today and referrals. But I paid for all that big time. Thanks again! :)>>>

Lanny gave you some good advice. Yellow page ads have to be the biggest rip-off in the advertising business. Small newspaper ads run on a regular basis do much better, return wise. Work your sold job list too. Offer your customers a referral fee for new business. Direct mail the area around the jobs you did (ABC Roofing provided this service at one time). Main thing is to figure out your market and carve a niche if you can. Look into the spray coating business. Many commercial buildings are going this route over replacement due to the costs.

JET>>>

Yellow page ad prices are negotiable. Last year I wasn't going to renew, so the sales girl kept lowering prices until she was offering two ads (for two different companies) for less than the price of one. Unfortunately, I fell for placing one ad which additionally netted me several tanks of gas poorer from looking at tire kickers and Wal-Mart shopper types without results. There must be fifteen pages of roofers in the yp here, and unless you are going out on a referral job, a legit co is wasting its time. And you don't need a yp ad for referrals.>>>

Willie- The residential roofing market is always tough. I don't think it is practical to try to run a larger business especially the way the economy is right now. I was fortunate when I started my business about 15 years ago to have had a referal base already in place from all of the work I had done over the years on the side. I started at about age 40 while I was still young enough to hit it hard every day. So it was usually me and a couple of guys and I did all of the detail work. I was able to avoid a large Yellow Page ad and have only had the free 1-line listing. As time when by and the body started to really object to the abuse I went the employee route feeling that it would give me more control. I have had any where from 2 to 8 employees at any given time. I found that the more employees the more chasing around and the need to sell a lot more work but it never seemed to be worth it in the wallet. So I have come to the conclusion that for me 4 guys is the ideal size to keep my company. I did try to have a salesman a couple summers back but that didn't pan out so I am the one selling the work and that is probably the best way for me to do it. I do have a part time helper in the office now to handle the payroll and a lot of the paperwork but I am probably too much of a control freak and am having a hard time relinquishing more duties over to her. I am working on it but it is not an easy thing to do. I guess the best I can say is that you need to determine your comfort level and your profit level when deciding where to go. I do not like a lot of stress, although I seem to have an abundence of it lately. So for me small is definitely the way to go. I have always complained about the low-ballers out there and this year they are worse than ever but I believe that as long as I keep pushing the wheelbarrow that it will continue to roll and I will stay busy and profitable. I miss the days when I could go out and swing that hammer all day, it really is a good stress reliever and I always found that when I would get into a groove the roof seemed to roof itself while my mind could be off solving problems and making plans. As I always say- By the time you are a really good roofer you are too old to do it any more. :laugh: Hang in there, that's about the only choice. Unless you want to go to work for someone. :laugh: I can't see doing that. Been there, got the t-shirt and the scars.>>>

Advertising and marketing.........in bad times you have to spend 3X the normal amount to get the same amount of sales revenue in return. We're spending TONS of money on ads, etc. that we normally never have to do. Thankfully many of our competitors have folded their tents so that helps but with the medial screaming at people every day how bad things are it really stirs the pot . Most companies cut their advertising budgets first but that's the absolute worse thing you could do. You have to keep your company out there in the public's eye to survive the bad times.

JET Good idea Jet ? This was in the question of the Month. Posted last month :laugh: :laugh: :laugh: :laugh: :laugh: ;) Spend your way out. Why stop at 3x ???? Spend Spend Spend x . My question is while your spending do you lower your prices to reflect the market conditions ? hmmmmm Or raise them because your competitors are folding tents ? hmmmmmm Or is this a fabrication ? hmmmmmmmmmm Or the only logical answer is you own advertising business hmmmmmm I know about that I used to own one back in the day ! ;) No I don't have the lic number :laugh: :laugh: :laugh: :laugh: :laugh: :laugh: :laugh: ;) ;)>>>