Roofing Costs Forcing New Efficiencies on Contractors

Posted by Michael Leonard on Aug 27, 2018 8:51:00 PM

First, the good news. Roofing contractors are seeing historical growth, with average annual sales increases of more than 14% over the past three years. A revitalized economy sparking new construction, storm-driven activity, and increased homeowner renovation and spending are all contributing to rising sales and healthy profit growth.

Sales Change - Roofing Article

Source: Forbes/Sageworks, The Roofing Industry Continues Its Upward Slope”, June 2018

Next, the bad news. Recent upswings in materials costs risk cancelling out or even exceeding greater revenues and higher profits. Growing labor costs (and difficulty finding qualified workers), higher oil prices, and new tariffs on imported aluminum and steel are reducing margins and limiting overall industry growth, with no signs of relief on the horizon. Roofing shingles alone have seen a 21% increase in cost over only the past 5 months. Associated accessories, such as roofing nails, ice and water membrane, felt and synthetic underlayment, etc. have likewise seen a roughly 18% increase in that timeframe.

Cost increases are so problematic, that roofing contractors polled in Roofing Contractor magazine’s 2018 “State of the Industry Report and Survey” cited materials costs as one of the biggest issues they face, second only to finding qualified workers.

Roofing Issues Diagram

Source: Roofing Contractor, "State of the Industry Report and Survey 2018"

On one hand, revenue growth and increased profits should make for booming business in the roofing industry. On the other hand, materials costs risk jeopardizing these positive market indicators. And while it may seem logical to simply pass greater materials costs on to the customer, this can be a risky proposition in such a competitive marketplace. Greater industry growth means greater availability of options for customers, who will often source at least 3 different quotes before moving forward on a job. So how can a contractor ensure they are well positioned for continued sales and profit growth while remaining competitive in the face of rising costs? In a word – efficiency.

Exploring New Efficiencies

It’s basic economics. If a business owner has no control over one business component influencing their costs and margins, closer attention and scrutiny must be payed to the components over which they do have control. In this case, contractors have little to no control over global dynamics influencing materials costs, but they do have control over other areas – such as estimating, material quantities (and waste), labor, and perhaps the most crucial, close rates.

Many roofing contractors are examining their estimating processes and tools as a result. The old fashioned pencil and paper approach to estimating can be problematic for a number of reasons. Inaccuracies in the process can drive materials waste. Lack of centralized control for material cost factors can cut profit margins in half if the latest costs and associated tariffs aren’t accounted for. Lengthy proposal development affects close rates, as customers may move on to receive other quotes as they wait 7 to 10 days for a proposal. Labor can be an issue as well, with the old fashioned estimating process taking 1 to 2 hours to complete, thus limiting the number of estimates a contractor’s in-demand estimators can complete in a day.

New technologies and applications have begun to sprout up to help contractors increase estimating efficiency, but many have significant drawbacks. Satellite-based estimating tools can often deliver inaccurate results – especially when dealing with custom/non-standard roofs and angles. Many new estimating apps also don’t solve the close rate issue, with 3 -5 day turnaround times to create the proposal. And they can be pricey, adding additional costs to an estimating process that achieves at best a 20% close rate.

One App, Several Solutions

Roofing contractors are increasingly turning to Go Figure, the contractor’s mobile office solution, to solve these challenges. Built by contractors for contractors, the Go Figure app lets a contractor estimate, propose, and close a roofing job in as little as 10 minutes – all onsite – using only a mobile device. The estimator simply takes the necessary property photos using Go Figure’s photo function, does a quick onscreen take-off to accurately measure distances, selects the preferred materials and job type, and Go Figure compiles a detailed proposal in seconds that can be used to engage with the customer in a sales discussion on the spot. No quasi-accurate satellite imagery. No lengthy proposal development processes. No wasted time. And since the contractor’s office manager can control the material and labor costs, the danger of including non-current costs (and subsequent impact on profits) is a thing of the past.

The Go Figure app delivers on all relevant areas of efficiency. Its low cost. Its timely, Its accurate, and its simple to use. To offset rising materials costs and make the most of recent industry opportunities, Go Figure delivers an immediate, cost effective solution that any contractor of estimator can learn to use effectively in minutes.

To learn more about the Go Figure app and to understand the importance estimating plays in increasing business efficiency, visit www.gofigure.build.

About Go Figure

Bid more. Close more. Faster.

Go Figure delivers a new way to estimate, propose, and close exterior remodeling jobs. No more pencils and tape measures, no more wasted time. Let a simple app do the work for you to save time and money and increase close rates.

Quick Facts:

  • Estimate jobs in minutes not hours
  • Deliver accurate proposals on the spot
  • Increase close rates to 50% or higher

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