Roofing margins too low

Anybody else having issues with companies under bidding roofing jobs. I can’t get a 20% profit margin around here. Companies are bidding jobs lower than that.

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No habla espanol? en poco?

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20% what? Gross or net? Where is around here? Have you had time to establish yourself as elite and worth more? Hard to answer your question without more data.

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What type of customers are you going after? Are you doing any insurance work? Why should these customers pay a premium to buy from you? What short cuts are these other companies taking in order to quote the low margins?

What is that you offer that makes you stand out?

We don’t do a lot of insurance work. We are in the Kansas City area and I try to sell at a 30% margin and price myself out. Most of the time I’m the highest. Commercial and siding is what carries us.

Quality, warranties and project managers. Most of our business is referrals.

We have a wide size range of residential. Upscale areas seem to be the worst. I’ve ran into other bids as low as 15% margin.

Are you administratively top heavy? Too much spent on pencil pushers and office sweeties?

20% is gross income. My expenses are around 15%.
The point was to get a job you need to be 25% or below. There are a lot of big companies selling low and running on volume. The smaller ones are running low margins just to get a job. I think I’m a mid range company. I do about 2 million in revenue. Thank God I don’t rely on residential roofing.
Except for google, I don’t spend anything on advertising. Do any of you have luck with advertising?
With my low net I doubt I can afford advertising more.

Ouch! Every reroof we bid has a 45% gross profit, new work around 35-40% depending on the volume we do for that particular contractor. I figure 25% overhead so when I bid the jobs properly NET profit on reroof is 20% while new construction is 10-15%. We only do residential and do 2.5 to 3 million per year. Repair work is most lucrative as that gross profit is usually figured at 60%. Maybe look into specializing in repairs and maintenance? People don’t get as many bids for that.

Where are you at? I’m not sure what’s wrong with roofing companies around here.

Pacific Northwest. Where are you?

Kansas City usually has a fair amount of storm activity and subsequent insurance work. You’d likely be well served to learn the insurance game where the margins are 30% minimum and much higher if you know what you’re doing. All markets have low ballers. Good selling is necessary to be paid a premium. You say you live on referrals. You should be able to command a premium from a referral.

Your tone sounds a bit entitled and whiny. Dig in, learn how to sell. Can you afford to advertise? The better question is, can you afford not to?

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We’re having the same problem here in East Texas, every day I’m driving thru town I see new signs for companies I’ve never even heard of. Seems to be random people starting up companies to make a quick buck and bid thru the floor, the bids being so low they can’t possibly be making more money running their own company than they would if they were just working for one.

Don’t even get me started on the beat up trucks with no signage, and the white vans packed with laborers like a clown car.

But hey its a free country. Look on the bright side, when these new or no name companies screw up all these roofs the reputable companies get more work out of it.

Kc is a tough market these days. Over saturated with companies by about 300%. Until hard times hit and clean out the bad ones, we are stuck playing in this game! Customers get 5-6 bids these days and there is always someone willing to work for cheaper. Keep your head down and keep going. Sometimes yur the windshield, sometimes the bug!