Avoiding the five-year failure

By Dani Sheehan.

Take your roofing business from surviving to thriving by scaling smart and investing in customer and partner relationships.

Starting a business is exciting, but surviving the first five years can be challenging. According to the U.S. Department of Commerce, nearly 72% of roofing companies don’t make it past that five-year mark. Why is that? And more importantly, how can you beat the odds?

In a recent episode of Roofing Road Trips®, Heidi J. Ellsworth sat down with Director of Contractor Engagement* Jon Abernathy, and Director of Communications and Community Relations Della Croft at TAMKO, to talk through the realities many new contractors face and how to build a roofing business that lasts.

Create a financial foundation

Jon noted that there’s a common mistake among new contractors: letting early success lead to premature spending. “Maybe they’re in a storm-heavy market and they crush it in the first year,” he explained. “Instead of setting money aside and understanding the payment process, they increase their spending or over hire. Then the next year slows down, and they hit a major cash flow problem.”

His advice? Scale smart. “You need about $100,000 for every sales rep you hire, just to cash flow what they sell,” he shared. “And you have to work closely with your distributor. Build that relationship. Better terms can give you the breathing room you need.”

Build your business by building relationships

Once your financial footing is stable, long-term success hinges on your ability to build relationships, both with your customers and your manufacturer and distributor partners. “Customer experience is everything,” Jon continued. “It’s how you talk to homeowners, how you keep the job site clean and how transparent you are with your process. When people feel like they’ve had a great experience, they tell their neighbors – and that kind of advocacy builds your reputation fast.”

But contractors shouldn’t carry the whole load alone. Gaining support from your manufacturing and distribution partners can make a big difference, especially in those early years. Della explains, “As an entrepreneur, you’re wearing every hat. Let your sales reps and partners take care of you too. That support flows into your customer relationships. It becomes a cycle of trust and value that helps your business grow stronger.”

*The views and opinions expressed are those of the participating roofing contractors and are based on their personal experiences in the roofing industry. These discussions are intended for general informational purposes only and should not be considered professional advice regarding insurance, financing, legal matters, or business transactions. Viewers are encouraged to consult with qualified professionals before making any decisions related to their business operations.

Read the transcript or Listen to the podcast to hear more insights on how to stay competitive and ensure your business lasts beyond the first five years.