Small Business Management

How To Start A Roofing Company

Owning a roofing company can be a lucrative form of income—if done correctly. In fact, by 2025, the North American roofing industry market size is expected to grow by 5% to over $47 million. In order to start a successful roofing business, you’ll need to take into account everything from creating a solid business plan, to filing local taxes correctly, getting the right licensing, and purchasing the best equipment. 

This guide will help you understand the various requirements to start your own roofing company as well as other considerations in order to run a successful roofing business.

We’ll offer eight actionable steps to start a roofing company, including:

  1. Creating a business plan
  2. Registering your business
  3. Business permits
  4. Calculating costs
  5. Business insurance
  6. Setting up a business bank account
  7. Investing in equipment
  8. Creating a solid marketing plan

1. Create a business plan

A well-defined business plan for your new roofing company is the first step to laying a strong foundation for a thriving business. 

Define your brand and business name

Your roofing company’s name and branding should clearly identify the service you offer and set expectations with new customers about the type of business you are. For example, will you be offering residential or commercial roofing services? Are you looking to target a younger demographic? Do you want to come across as formal or playful? You can also consider adding your location to your company name if you will remain localized. 

Choose a name that’s short, snappy, and memorable, and consider a logo for further branding opportunities. (More on this below).

Establish your target market

Once you’ve defined your company name and brand, the next step is to establish your target market. Some things to consider include: 

  • What types of roofing services do you offer? (Steep vs. flat roof builds / roof replacements / roof preservation)
  • Are you targeting homeowners with multiple properties or single homes?
  • Which areas of the city do you service?
  • Are your customers mainly those beautifying their homes or those in need of practical repairs?

Define your roofing business goals

The key to a successful roofing company is working toward specific goals. Make sure business goals are measurable and actionable, so you can clearly track success and make adjustments as needed. For example, instead of setting a goal such as “have a good sales year” try “grow residential roofing clients by 10% by end of year.” Do your due diligence by researching your market and location so that goals are realistic—otherwise, you will set yourself and your team up for disappointment.

2. Register your business 

Registering your business establishes a legal entity, which allows you to file business taxes properly. Before you register your roofing business, you’ll need to determine its business structure as follows:

Limited Liability Corporation (LLC) – in the US, this is the most popular type of business structure for a roofing company. As the owner of an LLC, you will not be held liable for any debts your company takes on, and protects your personal assets should you be sued. 

Corporation – A corporation is a separate legal entity that has shareholders and investors. This structure is beneficial if your roofing company will rely on investors for capital, as well as alleviates personal liability, should your company go into debt or face a lawsuit. Incorporating also comes with the advantage of lower corporate income tax rates, when compared with the personal income tax rate one would pay as a sole proprietorship. Also, some government programs or funding are only available to incorporated companies, so it’s important to check what funding is available before making the decision.

Sole proprietorship or partnership – For this type of business structure, the owner(s) are entitled to 100% of the business’s profit, but are also liable for any business debts, including lawsuits. Registering as a sole proprietorship is the easiest and fastest way to get your roofing business up and running, and also allows you to become eligible for business grants with no repayment obligations.

What’s the difference between an LLC and corporation?

Although LLCs and corporations are similar, there are some key differences to consider when deciding your business structure. LLCs generally have fewer recordkeeping requirements and more flexibility in taxation and management structure. 

With a corporation, you sell shares as a percentage of ownership, which can be transferred and sold easily. With an LLC, however, each owner owns a percentage of the business and transferrals are restricted. 

When it comes to taxation, LLCs have flexibility and can be taxed either as a sole proprietorship, partnership, S corporation, or C corporation. With so many options, it’s important to consult with a tax professional to make sure you understand how your roofing business will be taxed.

Once you register your roofing business, you will get an Employer Identification Number (US) so you can file taxes. 

3. Get the correct business permits

Your roofing business will require two types of licenses: business and contractor licensing.

Business licensing

Each state has specific licensing requirements to protect your customers. These requirements vary depending on your location, so it’s important to check with your local municipality to ensure you’re licensed correctly to operate your roofing business. 

Contractor licensing

Roofing contractor licensing requirements vary between states in the United States—some requiring a state-level license, and some not. If you live in an area where roofers are required to be licensed, be sure that their license is up to date.

4. Calculate costs

Your roofing business will never profit if you aren’t on top of all the costs involved in running it. Fixed costs like labor and materials are simple to calculate as they tend to remain the same month to month; but it’s important to also understand variable costs like marketing, fuel consumption, and new tools, which can vary depending on the volume of roofing jobs every month. Work with an accountant to estimate costs when starting your roofing business, so there are no surprises along the way. 

Roofing business costs can include:

  • Equipment and vehicles
  • Business registration
  • Insurance
  • Operational expenses (labor costs, vehicle maintenance, administrative costs)
  • Marketing and website maintenance
  • Promotional materials (flyers, vehicle wraps)
  • Office rent

5. Get the correct business insurance

Roofing businesses come with unique risks, so it’s important to protect yourself, your workers, and your business from lawsuits and liability before you begin any roofing work. Insurance provides a means to financial protection, should workers experience any accidents in the field or customers’ property be damaged. 

When you start a roofing business, you should purchase the following types of insurance:

General Liability Insurance

At the very least, your roofing company should have General Liability Insurance, which will cover damage or injury to parties other than your employees. Accidents happen—even with the most diligent companies. If there is an accident on your customer’s property and your client gets injured or their property is damaged, you may be required to pay for medical expenses, legal fees, or property damage out of pocket. General Liability Insurance covers these insurance claims, protecting you from going into serious debt or even bankruptcy.

Professional Liability Insurance

This type of insurance covers your own business from lawsuits due to acts of negligence on your part or lawsuits due to unsatisfactory services.

Workers’ Compensation

Roofing can be a dangerous job, with hazards such as roof stability, extreme heights, chemicals, bad weather conditions, heavy materials and machinery, fumes, dust, and power tools. These hazards are not to be taken lightly. If your employees are injured or fall sick while working on a job, you will be liable for their medical and legal fees. Workers’ Compensation is mandatory for roofing businesses in the US. 

Equipment Insurance

At this point, you’ve most likely invested in roofing materials, tools, and equipment, which don’t come cheaply. This insurance protects moveable equipment and tools where they are stored, and covers the cost of their replacement should they be lost, damaged, or stolen.

Vehicle Insurance

As a roofing company owner, you will be using company vehicles to store tools, haul roofing materials, and transport workers from job to job. If your vehicles or workers are injured due to a car accident on the job, vehicle insurance will cover medical expenses, provide loading and unloading liability, or replacement vehicle coverage while your company vehicle is being repaired. To find the best insurance package for you, be sure to consult with an insurance broker. 

6. Set up a business bank account and hire an accountant

Keeping accurate and detailed business records is imperative when you have your own business. Open a business bank account to keep business financials separate from personal, keep track of accounting details, and file taxes accordingly. 

Most small business owners are not professionally trained in bookkeeping and accounting, so be sure to hire professionals to handle this side of the business. They’ll also help you set aside the correct amount of sales tax as invoices are paid to avoid nasty surprises at tax season. Handing off these administrative tasks to professionals will also help you focus on what you’re good at—building an incredible roofing company.

7. Invest in work vehicles and equipment

When you start a roofing business, you’ll need to invest in the right tools, equipment, and company vehicles so you can provide your customers with the best service possible. As a new business owner, know that buying new is not necessarily better; purchasing used can save unnecessary costs, especially when starting out. 

Vehicles

When purchasing vehicles for your roofing business, consider the number of jobs you’ll be booking in a day, how many employees you’ll be sending on jobs, and what equipment you’ll need to haul. While a new truck could offer some advantages like the latest technology and warranties, a used vehicle could do the trick if you simply need to get from point A to B— and save money on startup costs, auto insurance, and taxes. 

Once you’ve purchased two or more vehicles, it’s time to consider a fleet tracking solution, which will allow you to keep track of where your vehicles are at all times through GPS tracking. Not only will this allow you to offer better customer service by providing real-time driver location updates, but it will also help you track your vehicles’ health so you can schedule routine and preventative maintenance accordingly. 

Equipment

Before purchasing equipment, consider the types of roofing jobs you’ll be offering. For example, will you mostly be working on residential roofing or commercial? Will you offer roof replacement services? What sort of roofing material will you be working with? These will also inform the equipment you should have on hand. Also, you may want to consider purchasing specific equipment as jobs are booked, so that you don’t overspend on startup costs and sit on unused tools. 

The basic equipment you’ll need to start a roofing business include:

  • Vehicle roof rack
  • Ladder or power ladder
  • Safety harnesses, hard hats and other personal protective equipment
  • Nail gun
  • Roofing hammer or hatchet
  • Roofing blade
  • Shingle tear off tool
  • Drill
  • Calking tools

As your business grows, you may need to invest in more specialized equipment like sawhorses, magnetic sweepers, and generators.

8. Create a marketing plan

Now comes the fun part. Your roofing company may be set up perfectly, but you’ll need to market your business and yourself properly in order to gain customers and grow profits. Start by setting up a simple business website that contains the services you offer and how customers can get in touch and request a quote. Create social media accounts on Facebook and Instagram as well, so you can communicate with prospective customers quickly and easily as well as showcase your work. 

For a new business, budgets may be tight so consider low-cost marketing like adding a business listing to Google My Business, posting ads on Craigslist, and networking with other small business owners to promote each others’ companies.

If you have some extra cash to spend on marketing materials, add a vehicle wrap to your company trucks, make lawn signs for your roofing sites, and print business cards with pertinent information for customers to get in touch.

Grow your roofing business with vehicle fleet tracking

Force by Mojio makes managing your roofing company’s vehicles simple and affordable, so you can continue to grow your business quickly.

By implementing GPS fleet tracking software, you can keep track of trucks on the go, and know where your team of roofers are at all times. This allows you to manage projects more effectively, improve your customer service, and improve operational efficiency. You can also get predictive alerts to stay on top of vehicle maintenance so you can avoid costly vehicle downtime and keep your trucks running smoothly.
Start a free trial with Force by Mojio to see how your roofing business can benefit.

Published September 6, 2021