Starting a roofing or roof repair business will involve many of the procedures that any business needs to open, but your legal licensing needs are specific.
How to start your own roofing business
Most professionals look for ways to turn their profession into a business that supports them, their family, and their employees. Starting your roofing business is a great way to turn a roof repair hobby into a lucrative business. Starting a reputable roofing business involves more than knowing how to install, repair, or replace roofs. An established roofing business needs good organization, patience, knowledge, soft skills, perseverance, and other traits. In this article, we will go over the entire process of How to Start Your Own Roofing Business .
1. To start a roofing business, you need to save money
As with any business, to start a roofing business, you will need money to finance your dream. This money should be enough to cover all business requirements. The amount of money, which is your working capital, will depend on your business roofing needs and business model. As a beginner, most roofing business owners recommend slow initial growth. In this case, you should recoup your investment in machinery before buying more.
Financing is a very important part of the business plan because when you start paying for your services, you will receive it once you have finished with the work, for which it is estimated that you will need at least $ 20,000 of financing to start your business.
The best way to finance your business is through personal savings, but you can qualify for a line of credit from a financial institution if you show good grades and have a good business plan in place.
Define your rooring or roofing business before you start
Before starting your own roofing business, you need a well-defined business plan. This can seem like a challenge if you don’t have any formal business training. However, you can still use the Internet to get ideas on how to formulate a perfect business plan for your roofing company. A roofing business description should have the following:
Roofing Company Name (DBA)
A business name will help customers find you, speak well of you, or even recommend you. A good business name should define your roofing business, what your services are, and impress investors.
Where is your roofing service area?
Defining your service area will help you identify your target audience, potential customers, competition, and customer preferences. By knowing all this information, it is easier to get the attention of your target audience.
Who is your target market for roofing?
Knowing your target clients will help you define your work policies that suit their preferences and interests. For example, since you are starting a roofing business, potential customers include residents, construction contractors, homeowners, and other small business owners in the region where your roofing business is located.
What roofing or roofing services will be offered
Choosing to focus on a specialty or niche will make your roofing business stand out from all other commercial roofing companies in your region. Focusing on a specialty will not only bring in repeat customers, but also many referrals from them. Niches in the roofing business include;
Residential or Commercial Roofing – You can choose to specialize in offering residential roofing or commercial roofing services. Most roofing companies prefer to specialize in the business niche, as they will not have to deal with homeowners.
Roof replacement, repair, or both – Your roofing company can also offer many other replacement and repair services. These include replacing broken or missing shingles, shingles, gutters, patching holes in the roof, etc.
Business setup, before starting a roofing company
How you set up your business will determine your success or failure. The location is significant. Apart from the location, you should consider the following elements:
Form a legal entity
Forming a legal business entity for your roofing business prevents you from being liable if you decide to sue your roofing company. A good legal entity will also help you maximize your financial opportunities and operational success. Common types of legal entities for roofing companies include:
Sole proprietorship – In this type of property, you operate your own business without a particular business structure. Your personal assets, business and liabilities are also not separate.
LLC (Preferred) – This business structure will protect your personal assets from your roofing business liabilities. All gains and losses in these types of entities are taxed as income or losses for business owners. This is the best type of legal entity for a roofing business.
S-Corp- Also known as subchapter, these corporations are closed corporations with limits on the maximum number of members. S-corps give small businesses a tax advantage by providing exemptions on corporate taxes.
Register with the IRS
The next step is to register your roofing business with the IRS . This will give you an employer identification number. This number is simply a Social Security identification number for your roofing business. The number will also be used to file taxes.
Open a bank account
Opening a bank account for your roofing business will be the first step in legitimizing your roofing business idea. A bank account for your roofing business will also help you file taxes. You will also be able to track company expenses, receive or deposit payments, manage salaries, and plan your roofing company’s budget with greater precision. You should also do the following after opening a bank account for your roofing business.
Get checks: Most customers still prefer to write checks; that is why you need to receive checks. You may also find the need to accept checks, which is more convenient than the cost and rush of processing credit card payments.
Bank card – Bank cards can help you make payments and purchases without carrying cash or relying on credit. Bank cards can also withdraw money directly from your roofing company’s bank account. You can get a bank card for your roofing company as long as you have a different business account for your company
Possibly a line of credit – A line of credit is like a financial safety net. It allows you to have extra funds whenever you need them. You won’t need to complete lengthy applications or screen potential lenders for additional funds.
Get insurances and insurance to operate your roofing business
Even when doing large jobs, a bond may be necessary, as it is often required as a condition of certain contractor licenses in certain states.
In fact, starting a company of this type means a great responsibility and although there are different insurance requirements for roofing companies according to each krastinsroofing state, to guarantee the protection of your company in the event of an accident or a lawsuit you should think about the different types of sure you may need.
From the day you start your roofing business, it exposes you to various risks. Your roofing business is already at risk before you even start your first roofing project. That is why your roofing business needs insurance. A lawsuit could kill your roofing business before it even starts. To get the best insurance deals, you can use a broker – brokers are advisers and will help you get the best prices. Types of insurance include:
General Liability Insurance: This insurance covers damage to the client’s property, client’s injuries, and all other related claims. If your roofing business is sued as a result of injury or property damage, you may have to pay a lump sum as compensation. General liability insurance will help cover these types of events.
For example, general liability insurance covers damages and injuries to third parties other than your employees.
Depending on each state, you will need to manage business liability and worker’s compensation insurance, since the roofing industries is a very dangerous profession and therefore the insurance will protect you, your company, your employees and your clients. .
Subcontractor Liability Insurance – As a general contractor, your roofing company will be responsible for completing all work on any roofing project in which it is involved. All subcontractors you hire to perform work will be held accountable to you, making subcontractor insurance a vital element of protection. While most general liability policies cover liabilities caused by subcontractors, others exclude independent contractors. In this case, you end up paying for the damages caused by your subcontractor.
Workers ‘Compensation – Your roofing business also requires workers’ compensation insurance for its full-time and part-time workers. This insurance will cover your employees if they are injured or ill after suffering a work accident.
Workers’ compensation insurance covers work-related injuries for employees.
Professional Liability Insurance – Professional liability insurance is also appropriate for your roofing business, as its niche involves consulting with clients and recommending specific roofing products and treatments. Professional liability insurance protects your roofing company from the cost of legal claims if its recommendations or advice result in a loss to your client.
Professional liability insurance helps you protect your business from legal claims.
Vehicle Insurance – If your roofing business uses vehicles to transport employees and equipment to and from workplaces, you will need vehicle insurance to cover all accident-related expenses in the event that your roofing company’s vehicle is involved in an accident.
With vehicle insurance you protect the vehicles you use in your work.
General Insurance – While general liability insurance covers most claims, you may receive lawsuits or accidents that can be so disastrous that they threaten to exhaust your primary coverage. In this scenario, blanket insurance will protect you from paying out-of-pocket fees to cover damages that exceed your primary policy.
Get a bookkeeper and accounting firm
Accounting will help you keep accurate financial records. Additionally, the law also requires companies to keep accurate books and records.
Do not do the accounting yourself unless you have professional training in this field. Trying to handle everything on your own will cause you to lose focus and motivation, which can stunt the growth of your roofing business.
You also want your accounting to get off to a good start to avoid future headaches, which is why you shouldn’t mess up your books by making data mistakes like missing entries, data entry errors, double entries, and swapping expense types. Hiring a professional accountant and accountant will help you avoid these mistakes.
Permits and licenses for roof repair business
Business permits can be obtained from the city government. Your local government may also require zoning approval and safety inspection if you plan to operate your roofing business in a location other than your home.
The state tax registration, sales permits and business structure procedures for partnerships, corporations or limited liability companies can be requested through the state website.
If you hire helpers, you must request the taxpayer and employer identification number through the Internal Revenue Service website.
State contracting license:
The state contracting license for roofers and general and special contractors is obtained from the business regulation department or the state licensing office.
Each state has different procedures and requirements for certifying roofers, so you may require more than one license, depending on the type of roofing you do.
On the other hand, licenses generally must be renewed periodically and you may even need continuing education according to certain special hiring disciplines that you must qualify for each renewal period.
Obtain all necessary permits and licenses
Like insurance, permits and licenses are required for your roofing business. Requirements vary from state to state. The licenses and permits allow you to operate a business legally covered. You can obtain business permits from your city or town hall. A roofing company needs the following permits and licenses:
Local Business Permit – You can obtain a local business permit from your town hall or city. The government may be required to do planning, zoning, and safety inspection approvals prior to granting you permission.
State contracting license – A general contractor license allows you to hire subcontractors, earn the respect of potential clients and colleagues. However, obtaining a state license is a complex process that requires you to meet certain requirements along the way.