Owning and operating a roofing business requires planning, oversight, and consistent effort. Without these things, it isn’t possible to achieve your business objectives by attracting new customers and increasing profits. It can be challenging at best to do all these things, particularly if you don’t have the cash flow you need.
At Select Funding, we work with roofing companies regularly, providing them with the working capital financing options they need to pursue their growth goals. Whether they choose small business financing or equipment financing, we provide them with the money required to pursue and reach their financial goals for roofing company growth. With that in mind, here are seven financial goals for a successful roofing business.
What Should a Roofing Business Plan Include?
Before we reveal the financial goals that you can pursue for your roofing business, let’s look at what you should include in your roofing business plan. The things you put in your plan typically point in the direction of your most important goals.
Your roofing business plan should include the following things.
Executive Summary
The executive summary should appear at the top of your roofing business plan and provide an overview of your business and what you hope to accomplish. Many prospective investors will decide whether to read the rest of your plan based on what you include in the summary.
You should include what your roofing business does, as well as what makes it unique and why you believe you can achieve your goals.
Company Description
In your company description, you should include a brief company history, your mission statement, and an overview of your long-term goals.
You should also include a detailed description of your Unique Value Proposition, the thing that makes your roofing company unique and will allow you to outshine your competitors.
Service Details
The services your company provides should be included and described in detail. For most roofing companies, the main services will be roof installment, replacement, and repair. You may also include things like gutter repair.
If you specialize in a certain type of roofing (think cedar shakes or metal roofing) you should mention that here as well.
Market Analysis
A proper market analysis is essential and should include research to help you understand who your customers are and what they want.
It should also include research on your competitors to gain knowledge of their services and reputation and what you can do to improve your visibility and convince customers to choose you over them.
Marketing Strategy & Implementation
After your market analysis, you should break down your marketing strategy and which tactics you will use to implement it and achieve your goals.
Part of your marketing strategy should be a budget. You should include information about your staffing, logistics, and other key elements that will go into making your business a success.
Financial Plan
The next section of your business plan should include information about your company’s finances and financial plans. Some of the documents and reports to include are as follows:
- A business budget
- Sales forecast
- Profit and loss statement
- Balance sheet
These reports will allow potential lenders and investors to review your current financial position and determine whether to support your business by investing in it or loaning you money.
Management Team and Key Staff
Finally, make sure to include a list of your executives, key employees, and board members, since each of these will play a role in the ultimate success of your roofing business.
For each person, write a brief bio. Make sure to include key advisors who may not be employed by your company as well as an organizational chart.
7 Financial Goals for Roofing Business Success
When you set financial goals for your roofing business, it’s important to create SMART goals. A SMART goal is a goal that is Specific, Measurable, Achievable, Realistic, and Time-Bound. When a goal meets these criteria, it’s easy to define what success means and track your progress.
Whichever goals you choose, we suggest choosing related key performance indicators (KPIs) to track your progress and help you reach your goals. Here are seven financial goals for roofing business success.
#1: Monthly Sales Target
Setting monthly goals is a good way to make progress toward annual or longer-term goals. Your monthly sales goals can be based on your annual goal.
With any construction business, including roofing, you’ll need to set your monthly goals with consideration for external factors, including weather. You may have much higher monthly goals in the Spring and Summer months than you will during the Winter months.
#2: Annual Sales Target
Setting an annual sales target usually begins with reviewing the previous year’s sales and determining how much growth you want to pursue. For example, if you had $2 million in sales last year, you might want to aim for 10% growth and annual sales of $2.2 million.
It’s important to be realistic with your annual goal. Most of us would love to see a 100% increase in profits, but that’s not likely to occur without a major expansion of your business.
#3: Reduce Debt
Carrying a lot of debt can make cash flow management more difficult than it needs to be and at the same time, put roadblocks in front of your other goals.
Any debt reduction goal should come with a payment timetable and be built around a strategy, particularly if you have business debt from more than one source. For many companies, debt reduction is most effective if it begins with extra payments toward the debt with the highest interest rate, also known as the Avalanche Method.
#4: Increase Speed of Payment Collection
Collecting payments in a timely manner is a challenge in every industry. Customers may delay payments or push you for long payment terms that impede your cash flow and may put your business at risk.
You can increase the speed of payment collection by shortening payment terms and putting a system in place to follow up and collect on past due invoices.
#5: Lower Overhead Expenses
Overhead expenses for a roofing company are likely to include rent, payroll, taxes, tools, supplies, equipment, utilities, and transportation. Some of these expense categories may not offer much opportunity for savings, but others might.
Setting a goal to reduce overhead expenses can free up resources for you to pursue your other financial goals. For example, you might be able to negotiate a lower rate for some utilities or save money by buying equipment with equipment financing.
#6: Improve Cash Flow
Cash flow is essential for the pursuit of most business goals, so it makes sense to do what you can to smooth out your cash flow. Some of the goals we’ve already mentioned can help, including streamlining your collection process and reducing overhead expenses.
You can also improve cash flow by applying for small business financing. It’s common for small businesses to struggle in achieving goals because they lack the working capital to engage in effective marketing or to buy state-of-the-art equipment. Select Funding provides small business and equipment financing to help roofing businesses grow.
#7: Increase Profit Margins
Profit margins are determined by how much you charge your customers and how much you spend to complete each roofing project you’re hired to do. Setting a goal to increase your profit margins may require you to rethink your pricing structure and find ways to reduce your overall costs.
Here again, it’s important to be realistic about your goal. You may increase your prices this year and find that you need to increase them again to keep up with inflation and make sure that you’re earning enough money to grow your business.
How Can Small Business Financing Help You Reach Your Financial Goals?
One of the biggest obstacles to achieving your roofing business growth goals is a lack of cash flow. Without the money on hand to carry out your growth strategies, you may struggle to market your business, attract new customers, and beat out your competitors.
With Select Funding, it’s easy to get the money you need to grow your business. We have two main financing options. Whether you opt for small business financing or equipment financing, we can get you funded quickly. All we need from you is six months’ worth of business banking statements so we can confirm your annual revenue, and a minimum FICO score of 525.
You can use your financing to pay overhead expenses, attract and train skilled workers, pay for your marketing campaigns, or purchase necessary tools and equipment. The roofing companies we finance see the success they deserve because they have the money they need to grow.
Get the Working Capital You Need with Select Funding
Your roofing business is something you care about and you want it to succeed. Setting financial goals is one of the key components of success because these goals help you see the way forward and track your growth and progress. The seven goals we’ve outlined here represent some of the most important growth goals for any roofing company.
Are you in need of small business or equipment financing to fund your roofing company growth goals? Select Funding can help! Click here to read about our financing options and begin the application process today.
