Top 7 Reasons Roofing Businesses Fail (and How to Avoid the Pitfalls)

Why Do Roofing Businesses Fail?

The causes of roofing company failures are primarily financial or operational. However, they are usually connected. 

For example, the lack of an efficient project management system, though an operational mistake, causes a company to lose customers. This reduces revenue and impedes the company’s growth, which ultimately leads to failure.

Here’s a rundown of the financial and operational reasons roofing companies go out of business:

Let’s explore them further.

1. Poor financial management

Financial mismanagement is a leading cause of business failure. No company can continue operating once it can no longer meet its financial obligations. Vendors will refuse to supply inventory, and roofers will resign due to unpaid wages.

Poor financial management can be traced to various factors, the first one being a misrepresentation or disregard for financial status data.

It’s easy for business owners to overspend when they misrepresent or fail to track their assets, revenue, cash flow, and liabilities. They may over-allocate resources to operational expenses and growth initiatives, only realizing their mistake when the company’s balance sheet is in the red.

Another cause of financial mismanagement is the adoption of poor pricing strategies.

While it's okay to offer low prices to attract customers, keeping them that way for too long strains companies' finances. They are forced to close when the revenue generated is insufficient to cover production costs and other overhead.

How to Avoid:

Always create detailed budgets based on existing financial resources. It’s advisable to follow budgets precisely and avoid spending on items and growth initiatives that can bankrupt the company.

Only spend on big growth initiatives, such as expansions, when there are sufficient funds to cover day-to-day operations. If possible, seek funding from external sources for such initiatives so the company remains a going concern.

Another way to avoid financial mismanagement is to account for expenses and production costs when pricing your services. Multiply your preferred profit margin by the sum of all expenses and add the result to your prices.

Lastly, monitor cash flow regularly to ensure that there’s always sufficient money to cover liabilities. You can also add roof repair maintenance and services to generate revenue outside storm seasons.

ServiceTitan’s Field Reporting software allows business owners to track valuable business performance metrics, such as revenue, from outside the office.

With the software, business owners can schedule reports and customizable dashboards to hit their inboxes at specific times of the month, week, or year.

Such up-to-date reports of the company’s financial performance help businesses to plan, track cash flow, and spot issues before they spread to other business areas.

ServiceTitan also has Invoice Templates field techs can use to bill customers and a Digital Invoicing feature that allows customers to pay online.

This enables roofing companies to maintain a consistent cash flow, so they always have cash available to settle bills and invest in growth.

2. Ineffective marketing and lead generation

Considering today’s digital evolution, no roofing company can survive without an online presence. Those who rely solely on old-school marketing strategies such as word-of-mouth and flyer distribution are soon outpaced by others.

To be fair, such strategies often generate results in the short term. However, they fail to do so over time, as other roofing companies investing in digital channels will have occupied the minds of potential customers, making them their first choice.

Additionally, roofing companies that launch marketing campaigns without adequate planning suffer two things:

• They are forced to redirect resources from other functions to cover the campaign's costs, having forgotten to create a budget from the onset.

• There was no proper audience research, realistic campaign objectives, or success benchmarks.

How to Avoid:

Develop a comprehensive marketing plan that includes both online and offline channels to promote your roofing services. 

This includes SEO, flyer distribution, paid advertising, social media marketing, direct mail, and email marketing.

This way, technically savvy and non-technical homeowners will become familiar with your brand and book appointments when their roofs have issues.

However, perform in-depth audience research before launching a campaign or picking a channel. 

What are potential customers’ pain points? Which channels do they use? Do they predominantly use metal roofing? How much are they willing to pay for roofing projects?

Answers to these questions will help you create successful campaigns without breaking the bank.

Lastly, use tools to track each channel’s return on investment and adjust your strategy and resources accordingly. There’s no use spending money on a campaign if it doesn’t bring in much more money in customer orders.

Tools such as Google Analytics, Moosend, and Hubspot help track marketing performance. 

However, they fail to deliver ROI insights since they’re disconnected from other business operation tools. And since their scope is limited to just one channel, you’ll have to invest in multiple tools for omnichannel campaigns.

ServiceTitan’s Marketing Pro platform is different. Investing in the platform lets you manage, create, and track email marketing, direct mail, and paid advertising campaigns from one place.

Its reputation management feature also automates the entire review request process. Here’s how it works:

• Once a technician completes a job, the software sends the customer a review request message.

• The customer clicks on the link in the message and submits the review. This triggers a review notification in the business owner’s mail.

• Finally, the business owner logs into ServiceTitan and replies from a central hub that collates reviews from multiple sources.

This helps roofing companies to maintain a positive online reputation.

Furthermore, Marketing Pro’s integration with Google Ads and Google Analytics platforms lets it track the exact ROI by matching campaigns and calls to the roofing jobs they generate. It then displays the performance report using an intuitive dashboard.

Lastly, ServiceTitan’s Email Marketing and Direct Mail platforms empower companies to build audiences from their customer base and target them with hyper-relevant content.

For example, you can create an audience of just customers with outdated shingles and target them with a roof replacement discount. This increases conversions, generating revenue.

Matt Swanson, co-founder of Guardian Roofing uses Marketing Pro to consistently generate leads. He says:

“...The fact that you're getting reviews back every day, the fact that you better be monitoring every customer and how they feel about you. We have systems that do that, that send us text messages if someone is unhappy. That's what we're doing just to keep up, just to try to stay ahead of the competition.

“Without all those things, I don't see us being here. And I think it's going to get really hard for companies that don't embrace [technology].”

3. Inefficient operations and scheduling

The moment a customer contacts a roofing company, they expect someone to pick up the phone quickly, schedule an appointment, and send a technician on the agreed-upon date. 

However, several things can go wrong when the roofing company lacks an efficient operations and scheduling system.

Dispatchers may mistakenly overbook, set overlapping appointments, and allocate insufficient time for each project. Or the assigned technician may be handling another project and fail to arrive at the scheduled date.

This overworks employees and causes technician churn.

Operational inefficiencies, such as roofing material stockouts,  billing errors, and poor communication between the field and the office, may also delay projects, leading to poor customer satisfaction.

How to Avoid:

Document your company’s standard operating procedure. It should capture recurring tasks and workflows so that every employee knows their role in each process.

You can use roofing technology to automate tasks, streamline communication between techs and back-office staff, and centralize data. This will minimize scheduling conflicts and miscommunication.

Finally, the roofing companies we’ve worked with say eliminating paper documents reduces operational inefficiency. Take the case of Guardian Roofing, for example.

Guardian Roofing Company had a standby printer named Matilda, for printing paperwork. 

Since the company replaces, repairs, and maintains roofs, employees had to sort several paper documents into coherent packets and place them in a filing cabinet where technicians could access them.

But it wasn’t just paper documents. “Inside those packets could be [notes like], ‘Call this customer, they want something different,’” says co-founder Matt Swanson.

Checks, cash, and even crushed potato chips were occasionally found within the same paper packets. 

After switching to ServiceTitan’s Roofing Software, everything changed. The billing switched from weekly to daily, techs could update field notes, which office staff accessed to answer customer queries, and they received notifications whenever membership clients had maintenance appointments.

Guardian’s techs use ServiceTitan’s Field Service App to record notes while in the field and access customers’ service history and property information. This helps techs sell confidently and provides front-office staff with real-time information to answer customer questions.

Guardian Roofing also uses ServiceTitan’s Scheduling platform and Dispatch software to eliminate scheduling conflicts.

Dispatchers use the Scheduling platform to track technicians’ exact locations, know where they are in the job cycle, and assign jobs appropriately. They also use it to plan for special roofing jobs ahead of time and assign techs with the expertise needed to execute them.

Lastly, the Dispatch software allows techs and dispatchers to communicate via text to confirm details, bridging the communication gap between techs and the office.

After switching to ServiceTitan, Guardian Roofing grew significantly, reporting a revenue of $30 million in 2023. “There’s no way we could have done that” without the operational efficiencies introduced by the software, says Matt.

4. Poor customer service and reputation management

Take a moment to think back to the time you hired a service professional. You most likely asked friends for recommendations, looked online for reviews, and selected the company you believed could deliver quality service.

Research has proven customers follow a similar process whenever they need roofing services. Because roofing services are typically pricey, they’ll most likely avoid companies with bad reviews and a reputation for delivering substandard workmanship or leaving the job site messy.

This means that roofing companies with poor customer service and a bad reputation eventually fail to attract customers. Since they lack customers, such companies will eventually be forced to close.

How to Avoid:

The best way to remain operational is to deliver quality work or service at every customer touchpoint. All employees should receive occasional customer service training on effective communication and conflict resolution.

Furthermore, constantly monitor online reviews and respond promptly to positive and, most importantly, negative feedback. This is especially crucial since almost 90 percent of customers prefer a business that doesn’t ignore negative feedback.

ServiceTitan’s Customer Experience platform helps roofing companies deliver quality service at every customer touchpoint.

With its customer recognition feature, CSRs see customers’ details whenever they call. This allows them to greet the customer by name and offer personalized service.

ServiceTitan’s Customer Experience platform also empowers employees to communicate directly with customers. Dispatchers can text appointment reminders to customers who can use the same platform to ask questions.

In addition, the platform centralizes all customer data and service history details. Robert Maier of Laing Roofing says this empowers techs to deliver quality service and arrive at the job site prepared. 

“Techs can access that customer history and see that we've tried to go out there two or three times, but the weather didn't cooperate,” he says. 

“They know the backstory with the customer and what they've been going through. They're not going in blind.”

5. Neglecting employee training and development

Companies must train and retrain their employees because the roofing industry is constantly evolving. Those who fail to do so are eventually surpassed by others.

Additionally, seven out of every ten participants in a recent LinkedIn workplace study say they feel more connected to companies investing in their development. They will stay with such companies and put in their best efforts to ensure they grow.

Therefore, companies investing in employee training and development experience lower turnover rates. This is vital, especially in the roofing industry, where qualified labor is hard to find, and the cost of training new employees is steep.

How to Avoid:

Create a training program for new hires and provide existing employees with skill development programs. 

This could involve bringing external experts to speak on specific topics. Or hosting lunch-and-learns intermittently where employees can give mini TED talks and bond with each other.

Finally, create a positive company culture, because a happy employee is great for the business. Publicly recognize high performers to increase job satisfaction and check for culture fit when hiring.

6. Underestimating the importance of safety

Like the rest of the contractor industry, roofing is a hazardous profession. Unfortunately, accidents and injuries are not unheard of. According to the Roofing Contractor, the roofing industry recorded the second-highest workplace fatalities in 2022 among all civilian occupations.

When fatalities occur, roofing companies found liable for ignoring safety requirements may be punished with massive penalties. 

For example, ALJ Home Improvement were found liable for the death of an employee, after OSHA inspectors discovered that they had ignored safety requirements. According to OSHA, this included “violations related to fall protection deficiencies, unsafe ladder use, additional ladder-related hazards, and lack of head protection.”

In addition to suffering reputational damage, the company was fined almost $700,000, which severely damaged its balance sheet.

How to Avoid:

Implement strict safety protocols and encourage employees or subcontractors to obey them. Roofing project managers can randomly visit job sites to enforce the safety protocols and write up those violating them.

In addition, roofing tools and equipment should be regularly inspected for defects and signs of wear. 

Ensure the hinges and locks on roofing ladders are working properly. If the scaffolding’s platform is unstable, replace it. Close any exposed wires on power tools.

Lastly, encourage workers to update their knowledge of safety protocols regularly. They can check out OSHA’s roofing safety guidelines document.

7. Failure to adapt to industry changes

The roofing industry is constantly evolving. Technologies, regulations, materials, and techniques are constantly changing, and customer behavior and preferences shift rapidly.

When roofing companies fail to adapt to such changes, they risk being left behind or, worse, becoming obsolete.

How to Avoid:

Stay abreast of industry trends by reading trade publications, following roofing podcasts, and attending trade shows whenever possible.

You should also dedicate a portion of your budget to investments in ongoing employee training. This includes books, training courses, and conferences.

Embrace technology to improve efficiency and service quality. Preferably, go for a tool like ServiceTitan that issues regular software updates and feature releases in line with emerging trends.

Lori Swanson of Guardian Roofing, who has experienced significant growth after implementing ServiceTitan software, believes technology should be an indispensable part of every roofing company.

“With technology…I think what took us 18 years is going to take someone five,” Lori said. 

“Because you have real-time information, your KPIs, you can make quick decisions, you can pivot, you can see what marketing is working. If we would've had the same technology we have now [...] when we started, everything would've looked a lot different.”

What Are the Signs that a Roofing Business Might Be Failing?

Fortunately, business failure hardly happens in one fell swoop. There are always warning signs. Early detection of these signs empowers roofing business owners to take corrective action to prevent the company from failing. 

The various business failure indicators are tied to a company’s finances, operation, and ability to attract customers.

This graphic gives a summary of these signs.

Use ServiceTitan roofing software to consistently track your business performance, spot these failure indicators, and take corrective action to stay operational.

How Can Technology Help Me Improve Operations in my Roofing Business?

For roofing companies to succeed, technology must be a vital to their operations. Without it, they’re forced to perform tasks manually, which introduces inefficiencies and skyrockets the risk of failure and mistakes.

Technology also gives business owners access to performance reports that enable them to pinpoint issues before they escalate and know when to change strategy.

An example of such technology is ServiceTitan, our comprehensive roofing software.

We designed it to serve companies providing residential or commercial roofing services. With it, roofing business owners can efficiently manage multiple projects, deliver quality customer service, and access valuable roofing insights.

This helps roofing companies continually grow and expand. For example, Laing Roofing soon grew from two to six trucks after switching to ServiceTitan from their old CRM. 

Essentially, the software allowed them to become the go-to company for property managers throughout the life cycle of their roofs.

“ServiceTitan is (allowing us) to manage all that stuff in between—the annual inspections, providing recommendations, repairs, and maintenance throughout the year,” says Laing’s Robert Maier. “These are big assets for property managers. To have a half-a-million-dollar roof, and then manage it for 30 years, we want to go back to that same location every year.”

Here’s a summary of the software’s key features.

1. Service Agreement: Automates service contract renewals and displays the associated actual and budgeted labor costs, and material costs. This allows users to track their profit margins and pinpoint resource bloats early.

2. Service Scheduling: Streamlines scheduling starting from when a customer calls to when the technician arrives at the job site. With this feature, roofers can handle multiple jobs daily, increasing cash flow.

3. Job Booking: Helps CSRs deliver a positive first impression, spot upsell opportunities, and provide personalized services. Roofing companies use the feature to deliver quality customer service at scale.

4. Lead Management: Empowers roofing companies to manage leads from one location. It also collates all the information CSRs need to schedule a job and assign the right tech to handle it.

5. Accounting Management: Automates accounting tasks and provides real-time financial performance insights. It also syncs with accounting software such as QuickBooks and Sage Intacct.

6. Client Experience: Facilitates two-way SMS communication between companies and customers. Roofing companies also use it to collect various forms of payments, create custom payment portals, and empower customers to track technicians.

7. Field Operations: Roofing companies use this feature to arm field techs with all they need to close sales, deliver quality service, and work efficiently. Field techs use it to access the pricebook to create attractive estimates, record notes, complete forms and timesheets, and confirm equipment availability.

8. Marketing Strategy and Call Tracking: Encompasses tools for managing and tracking different channels. With it, roofing companies can run effective marketing campaigns and know their exact impact on revenue.

Book a free demo to discover how these features and many others can grow your business and keep it from failing.

The Bottom Line

The journey to succeeding as a roofing company starts with identifying potential pitfalls and creating strategies to avoid them. 

Although entrepreneurship is fraught with risks, you don’t have to make the mistakes others have made. It’s better to learn from and know how to prevent them.

If you want to learn more from other successful roofing entrepreneurs, check out our guide on starting a roofing business and consult this article on how to grow one.

You can also learn how to use search engine optimization (SEO), referral programs, and PPC advertising to generate leads consistently.

ServiceTitan is an all-in-one app that helps roofing companies optimize their entire operation and monitor profitability from one central hub. Automate business tasks, empower technicians, boost efficiency, and generate leads with ServiceTitan.