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!!!>>>

The way residential operates all you got to do find a few good subs, befriend a couple of insurance adjusters a good hail storm and you got yourself a nice little business.>>>

I deleted my last post out of respect Ole Willie. I'll try to stay on track and focus. I would seriously look at why your doing this.?? Roofers are folding their tents for a reason. It is going to get worse. We haven't hit the upper end of the curve yet.It is more of a J for lack of a better example. If you have been paying attention to the news on the All Barrack Channel (ABC) they are telling you it has bottomed and Michele Jackson was a drug addict . Everything you wanted to know ?? Tabloid crap !!!! They are not telling you what you need to know . Prepare yourself . The news media have become the government channels. They will not tell you what you need to know .>>>

Well, I will not be totally eliminating my advertising for referrals only. I still like getting new customers. But not at $3,000 a month. Im thinking $1,000 used in a few differnt avenues instead of just 1. The yellow pages has been good for me over the years until the last few years. Now the price is ridiculous and they refuse to lower it. So bye bye baby. Incolumn only for them. Yellow Book will get a little and another smaller book that distributes to my prime area only, will get some. If i need to add some more advertising later if this doesnt work out, then theres always the newspaper which i used to get a fair amount of work out of for a couple hundred a month. And the proximity marketing. I did some direct mailing to local real estate agents and got some work out of that but it wasnt worth all i had to do to get it. I will either be letting my office go or moving to a lower cost home. Not sure which one just yet. Already lowered down just about every bill i could. Probably have to let my salesman go as well. I can and will be cutting out all waste possible. If things get really slow i dont mind replacing roofs myself with a helper. I dont do it now because the little bit of extra money i make by doing so just doesn't do much toward all these expenses. When it means something significant again i will.>>>

It would appear that I'm a little further along. More free time for me and THE LOVELY MRS CIAK to pursue what we want and like. I stated it before and I will say again. I hit the timing right. Just pure luck if there is such a thing. Sold all my vehicles ,left my office , flushed all advertising except a small publication that helps supports a charity I agree with . All referrals . I get along very comfortably . There was a time I had a knot in the right side of my back up to my neck. Now I rock on my front porch walk with THE LOVELY MRS CIAK . I'm paid handsomely to travel Soon THE LOVELY MRS CIAK will be traveling with me . Double the pay 1/2 the expense . I help school some adjusters about stormers and the down and dirty Roofing Contractor. I know the roofing trade . I know craftsmen and by asking a few short questions pertinent to the trade . I digress. My end game is to give away my last roof to someone I trust .>>>

All of our work comes from referals...all of it. I spend xtra money on the jobs adding special touches and doing fine detail work. It makes for more referals for one thing, and since we don't have to pay all that cash for the advertizing, I consider it my advertizing. I works for us anyway.

You are either very big or very small. The medium sized outfits get eaten alive, and unfortunately all of us have been there. It really feels good to listen to the answering machine to the Yellow pages sales people calling again and again and not having to bother to call them back. Cheap too!>>>

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: ;) ;)>>>

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.>>>

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.>>>

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>>>

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! :)>>>

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!>>>

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.>>>

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.>>>

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

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>>>