You can’t wish your way into a booming roofing business. Building a business that offers a valuable service and provides for your family and employees takes hard work in the office as well as on the rooftop. Here are four roofing business growth terms you can’t afford to ignore if you want to grow your company.
Key Performance Indicators (KPI)
Whether you’ve just started a roofing business or you’re a second-generation owner, use KPIs like score cards to gauge its health so you can take action. They vary from business to business—the KPIs you choose to measure should directly tie into your roofing business goals. KPIs for a roofing contractor might include:
- Close Ratio: How many deals you close vs. how many presentations you make. Knowing this statistic helps you assess lost sales and identify opportunities for improvement.
- Customer Acquisition Costs: How much does it cost to earn each new customer? Calculate this by taking the entire cost of marketing and sales (including salaries) over a given period and dividing it by the number of new customers acquired in that same period.
- Revenue per Salesperson: If you employ a sales team, find out how much revenue each one brings in individually. When you measure this roofing KPI, you can more easily assess fair compensation as well as identify which salespeople need improvement and which are worth holding onto tightly.
Depreciation
Depreciation is a tax deduction that covers the natural decrease in the value of equipment over time. Calculating depreciation can be complex, so save a ton of time and lots of stress by consulting with your roofing business accountant or tax professional. For a good, plain-English outline of how the process works, see the IRS’ A Brief Overview of Depreciation.
Record Keeping
New business owners in particular sometimes overlook the importance of accurate and consistent record keeping. This is the process of maintaining records for all roofing business transactions, including expenses, payroll, receipts, sales, and more. Proper record keeping makes it easier for you or your accountant to correctly fill out tax forms and maximize deductions. It doesn’t matter if you choose pen-and-paper ledgers, spreadsheets, or accounting software, make sure you have record keeping in order. Learn more in NOLO’s Choosing the Right Business Record Keeping System.
Beware: Ignore good record keeping at your peril! Tax audits are stressful enough when a business owner keeps meticulous records; imagine how much more stressful an audit will be when you don’t have the proper paper trail to support your filings.
Copyright
This might seem like an odd term to throw into a post that focuses on roofing business growth terms, but you should understand the concept if you’re a roofer who uses social media or a roofing blog to connect with consumers. When a person creates and posts a piece of content, like an article, video, or photo, he or she instantly owns the copyright to that piece.
What does that mean for you? Don’t post content you didn’t create without crediting the owner, or, in some cases, getting permission from the owner. Tips for Using Images by Amy Lynn Andrews is a good resource that shares guidelines on finding and using images legally.
Put these terms into action to grow your roofing business. And, when you need to take an additional step to boost productivity and increase referrals, check out the Equipter RB4000, a dumpable, self-propelled container with a 12-foot lift that will help your crew work smarter—not harder.
