Starting a Roofing Company: The Operator's Playbook

Most articles about how to start a roofing company read like they were written by someone who has never stood on a 10/12 pitch in July. They talk about "being your own boss" and "unlimited income potential" and skip right past the part where you are personally guaranteeing a $40,000 materials order on net-30 terms with a supplier who has never heard of you.

This is not that article.

If you are reading this, you are probably a project manager at an established shop, a salesperson who has been selling someone else's roofs for three years, or a tradesperson who has gotten tired of making someone else rich. You have seen the numbers. You know roofing can make real money. You want to know what the first twelve to twenty-four months actually look like before you sign a personal guarantee on a truck loan.

Here is the operator's playbook. Realistic numbers, realistic timelines, and the stuff nobody tells you until you are two months in and wondering what you signed up for.

The Honest Picture of Starting a Roofing Company

Roofing is one of the best trades in America right now. The demographics are in your favor. Baby boomers are retiring out of the industry faster than they are being replaced. Insurance restoration work has matured into a repeatable system. Storm seasons are getting more volatile, not less. If you can run crews, talk to homeowners, and manage cash, there is a path to a seven-figure shop inside five years.

That is the good news.

The bad news is that roofing is also one of the highest-failure trades in the first 24 months. The Bureau of Labor Statistics and state contractor board data both point to the same conclusion: roughly half of new roofing companies do not make it to year two, and maybe one in four survives to year five. The businesses that die do not die because the owner cannot sell or cannot nail shingles. They die because the owner cannot manage cash across a 60-to-120 day insurance collection cycle, or because labor walked off mid-job, or because a lawyer sent a letter about a leak from a roof installed nine months ago.

Your first year is not about growth. It is about survival and learning the operational rhythm. If you take nothing else from this article, take this: plan for twelve months of minimal owner income, assume every job will pay 30 days slower than you expect, and resist every temptation to spread yourself across services, geographies, or revenue streams before you have mastered one.

Insurance Restoration vs Retail Roofing: Pick One

The first real strategic decision you make will define your next five years. Insurance restoration and retail roofing look similar from the outside. Both sell roofs to homeowners. Both require crews and supplier accounts. From the inside, they are completely different businesses.

Insurance restoration is a sales and documentation business that happens to involve roofs. You are knocking doors after hail and wind events, identifying storm damage, working with adjusters, writing supplements, and managing claim paperwork. Gross margins are high when you run it right. Cash cycles are brutal. You might sign a contract in June and get the final depreciation check in October. Your sales model is door-to-door or referral-driven. Your biggest operational risks are claim denials, ACV-only payouts, and chasing insurance checks.

Retail roofing is a construction and referral business. You are selling to homeowners who know they need a new roof and are comparing three quotes. Margins are lower on average. Cash cycles are faster. Your sales model is lead generation through Google, Facebook, neighborhood referrals, and increasingly, video content. Your biggest operational risks are underpricing, scope creep, and losing deals to the guy who came in $2,000 under you.

Pick one. Do not try both in year one. I have watched more first-year shops fail from trying to run a retail operation Monday through Thursday and storm-chase on weekends than from almost any other single mistake. The sales scripts are different. The paperwork is different. The supplier relationships are different. The marketing is different. The KPIs are different. You cannot serve both masters while also learning how to run a business.

If you came from a storm restoration shop and understand the claim process, start there. If you came from a retail shop and understand lead-to-close math, start there. Add the other later, once you have a functioning operation with margin to spare. For a deeper breakdown on the restoration side specifically, see our storm chasing operations playbook.

Licensing, Bonding, and Insurance by State

There is no national roofing license. Every state is different, and several states punt licensing down to the county or municipal level. Before you print business cards, spend a weekend on your state contractor board website and actually read the rules.

A few examples of how wide the spread gets:

Florida requires a state-issued Certified Roofing Contractor license or a Registered Roofing Contractor license tied to a specific local jurisdiction. You need to pass a trade exam plus a business and finance exam, document financial responsibility, carry workers comp and general liability, and in most cases post a bond. Budget several months and several thousand dollars to get through the process.

Texas does not require a state roofing license at all. This is part of why the Texas roofing market is so competitive and why consumer complaints run high. No license does not mean no rules. You still need liability coverage, workers comp (or a qualifying alternative), and local permits. If you plan to work insurance claims, you also need to register as a roofing contractor with the Texas Department of Insurance for certain activities.

California requires a C-39 Roofing Contractor license from the Contractors State License Board. That means four years of documented journeyman experience, passing two exams, a $25,000 contractor license bond, and workers comp coverage. California is not a state you just show up in with a truck and a crew.

Colorado licenses at the municipal level, not the state level. A license in Denver does not cover you in Aurora. If you are storm chasing across the Front Range, you will end up carrying half a dozen local licenses.

Georgia, Tennessee, North Carolina, South Carolina all have their own combinations of state licensing thresholds (often tied to job value), bonding, and insurance requirements. Assume nothing is the same as the state next door.

Beyond the license, you need three insurance policies at minimum: general liability (usually $1M/$2M), workers compensation (required in most states if you have even one W-2 employee, and strongly recommended even with all-1099 crews), and commercial auto on any trucks. Budget $8,000 to $25,000 in annual premiums depending on state, payroll, and claim history. If you plan to work insurance restoration, carry higher liability limits. Homeowners and adjusters notice.

Get a contractor-specialist insurance broker. A general small-business broker will miss things. Ask the broker specifically about exclusions for steep-pitch work, tear-offs, and subcontractor coverage.

Realistic Startup Capital: The Actual Range

You will read articles claiming you can start a roofing company for $10,000. That is technically true in the same way that you can technically summit Denali in a hoodie. The person who told you that either did it 20 years ago in a different regulatory environment, or they failed and did not mention that part.

Here is a realistic range for a roofing company that plans to survive year one.

Bare minimum, solo operator with one small crew, retail residential only: $40,000 to $75,000. This covers basic tools, a used truck or trailer, first year of insurance premiums, licensing fees, a modest marketing budget, a cash buffer for the first couple of jobs before customer payments land, and a few months of personal living expenses. You are doing your own sales, your own production management, and your own books. You are running lean and you are tired.

Realistic starting point for a two-crew operation targeting $1M-$2M year one: $100,000 to $200,000. This assumes a new or near-new truck, a ladder rack and trailer setup, a small office or at least a dedicated workspace, proper signage and wrapped vehicles, a real marketing budget, software subscriptions, deposits on supplier accounts, higher insurance limits, and six months of operating runway. It also assumes you are paying yourself something resembling a salary after month three, which most bootstrapped founders delay too long.

Insurance restoration startup, hitting the ground in a fresh storm market: $150,000 to $300,000. Restoration work burns more cash up front because you are fronting materials and labor for 60 to 120 days before insurance pays. You need bigger supplier credit lines (which you will not have in year one, so you are paying COD or on 15-day terms), more salespeople, a CRM and claim management setup, and a legal/admin infrastructure for supplements and public adjuster relationships.

Where most first-year founders get this wrong: they budget for the tools, the truck, and the insurance. They do not budget for the 90-day gap between booking a job and cashing the check, or for the $15,000 they will personally eat on their first scope dispute, or for the slow months when it does not rain and nothing happens.

Have six months of fixed operating expenses in cash before you open. If you can get a line of credit from a local bank before you need it, do that too. Nobody will give you a line of credit when you actually need one.

Legal Entity: LLC, S-Corp, or Partnership

Default answer for most first-year roofing founders: form an LLC, elect S-Corp tax treatment once you are consistently profitable, and avoid partnerships unless you have no other choice.

An LLC gives you liability protection, is cheap to form, and is flexible. As a single-member LLC you are taxed as a sole proprietor by default, which means self-employment tax on every dollar of profit. Once your net profit clears roughly $50,000 to $75,000 a year, filing an S-Corp election (Form 2553) usually saves you real money by letting you split compensation between W-2 salary and distributions. Do not file the S-Corp election on day one. You need a reasonable salary number and clean books to make it work, and premature S-Corp status creates more pain than it solves.

Partnerships are the most common reason roofing companies blow up in year two. Two salespeople with complementary skills decide to start a shop together. Six months in, one partner is working 70 hours a week and the other is at the lake every Friday. Nobody wrote an operating agreement with real buyout terms. Now you have lawyers involved, and the business is worth less than the legal bill.

If you must partner, do it with a written operating agreement, clear equity split, defined roles, a vesting schedule on equity, and a buy-sell agreement that covers death, disability, voluntary exit, and for-cause termination. Spend the $2,000 on a good construction attorney up front.

Open a separate business bank account the day you form the entity. Never commingle. Get a business credit card in the company name. The IRS, the state, and any future buyer will all care about clean books, and clean books start with never paying for personal groceries from the business checking account.

Getting Your First Supplier Accounts

Your first few trips to ABC Supply, Beacon, or Roofers Mart will be humbling. You walk in, you ask to open a commercial account, and the branch manager looks at you like they have heard this speech five times this month. Because they have.

Here is what actually gets you an account and reasonable terms as a new shop.

Start in person at the branch. Find the branch closest to where you will be working. Introduce yourself to the branch manager and the inside sales rep. Tell them you are a new shop, what you plan to do in year one, and what you need from them. Show up in company apparel, with a wrapped truck if possible. First impressions matter in a relationship business.

Expect COD or a small credit limit at first. New shops rarely walk in and get net-30 terms on a $25,000 line. Common starting terms are COD, or a $5,000 to $10,000 credit line with a personal guarantee. Do not take it personally. Pay every invoice early for six months and ask for increases.

Have a trade reference list ready. If you have any prior commercial credit in construction (a tool supplier, a concrete yard, anything), list it. If you have a banking relationship, bring the banker's contact info. Personal credit score still matters even if you have an LLC.

Do not play suppliers against each other in year one. You will be tempted to price shop every order. Resist that. Pick one primary supplier, one secondary, and give them consistent volume. Branch managers have discretion on pricing, rebates, and credit increases. They give those to loyal customers, not to price shoppers.

Ask about manufacturer certification programs. GAF Master Elite, Owens Corning Platinum, CertainTeed SELECT ShingleMaster, Malarkey Emerald Pro. These take time to qualify for (most require some operating history and certification exams), but the extended warranties they let you offer are a real sales differentiator in retail. Your supplier can walk you through requirements.

Finding Labor: Subs vs In-House Crews

The subs-versus-in-house debate is the second-most-heated argument in roofing after "synthetic vs felt." There is no universally correct answer. There are tradeoffs, and you need to know which tradeoffs you can live with.

1099 subcontractor crews are how most first-year roofing companies get installs done. You find a crew lead, you agree on a per-square or per-job price, and the crew shows up with their own tools, labor, and often their own transportation. You do not carry workers comp on them (in most states, assuming proper classification). You do not pay unemployment tax. You pay when the job is complete.

The problems with 1099 crews: they work for three other shops. They will skip your job for the shop that pays faster. Quality varies. You have limited control over schedule. Workers comp exposure is a real issue if a sub is injured and did not carry their own policy (many states will push the claim back to you as the general). In some states, aggressive misclassification enforcement can reclassify your subs as employees retroactively, which is catastrophic.

W-2 in-house crews give you schedule control, quality control, and a real training pipeline. You carry workers comp, pay payroll taxes, and manage the HR overhead. The per-install cost is usually higher. The tradeoff is that a good W-2 crew is a durable competitive advantage. They show up on time. They fix the callback without arguing. They pick up the jobsite.

The realistic year-one approach for most shops: run one trusted sub crew for production while you build relationships with two or three backups. Do not scale to five sub crews running five jobs at once before you have systems. You cannot inspect what you cannot watch. By year two or three, start bringing in a lead installer as a W-2 and build an in-house crew around them.

Always verify workers comp coverage on every sub before they start. Always. Get a copy of their certificate of insurance with your company listed as certificate holder. If the certificate is a week from expiring when they show up on site, stop and get an updated one. This is the single easiest lawsuit to avoid in the entire industry and new shops skip it constantly.

Marketing for Customer One Through Ten

Your first ten customers will not come from Google Ads. They will come from your personal network, your labor, and your willingness to do things that do not scale.

Here is what actually works in months one through six, in rough order of return on effort.

Your existing network. If you worked in the trade before, you know homeowners, property managers, real estate agents, and insurance agents. Tell every single one of them, in a personal message (not a mass post), that you just opened a roofing company. Ask them to keep you in mind and send anyone who asks about a roof your way. This alone should produce three to five jobs in the first 90 days if you worked it correctly.

Door knocking storm-damaged neighborhoods. If you are in insurance restoration, this is the primary customer-acquisition channel for year one. Pull hail maps, canvass neighborhoods with reported damage, and run the scripts. A trained knocker can produce 5 to 15 inspections a week, which converts to 1 to 3 signed jobs. For tactical depth, read our complete door knocking guide.

Referral systems. Ask every completed customer for a referral the day the job closes out. Offer a $100 to $250 referral reward per signed job that comes from them. Yard signs on every job for two weeks minimum. Wrapped truck parked in the driveway during the install.

Google Business Profile. Before you spend a dollar on ads, claim and optimize your Google Business Profile. Get five-star reviews from your first five customers. Post updates weekly. Upload photos from every job. This is free organic traffic that keeps compounding.

Local Facebook groups. The neighborhood-level groups, not the city-wide ones. Do not spam. Answer questions, be a helpful local contractor, and when somebody posts "anyone know a good roofer?" you will already be known.

Strategic partnerships. Real estate agents who need roof certifications before listings close. Property management companies with rental portfolios. Independent insurance agents who need a trusted contractor to recommend to their clients. One good agent relationship can produce 20+ jobs a year with zero marketing cost.

What does not work in year one: Google Ads at $50 cost-per-click, generic Facebook ads to cold audiences, expensive SEO campaigns that take 12 months to rank, and any "lead generation" company selling shared leads for $75 each. Save that budget for year two when you have the close rate and operational capacity to convert paid leads efficiently.

When and How to Scale the Sales Side

You do not need a sales team in year one. You need you, selling, in front of every deal. This is non-negotiable. You will learn more about your market, your pricing, your value proposition, and your objection handling in the first 100 sales conversations than any book or course will ever teach you.

The moment you hand off sales before you understand sales, you are at the mercy of whoever you hired. They will close deals you cannot deliver profitably. They will promise things you cannot honor. They will quit in month three and leave you with half-sold jobs.

Start hiring sales help when two conditions are both true. First, you are personally turning away inspections or inquiries because you physically cannot keep up. Second, you have a documented sales process, a pricing sheet, and a close ratio that you can teach. If you do not know your close ratio, you are not ready to hire a rep.

Your first sales hire should almost always be commission-heavy. A small base (or no base), with commission on signed, installed, and collected jobs. Not on contract value. On collected dollars. This is the single most expensive lesson first-time owners learn, and the one most commonly taught the hard way. For the full framework on commission structures, see our commission guide.

When you are ready to scale from one rep to a team, the dynamics change completely. You need a sales manager, you need lead distribution rules, you need a CRM that actually enforces follow-up, and you need to define territory. For the playbook on that transition, our sales team hiring guide walks through it end-to-end.

Accounting and Cash Flow for Roofers

The single biggest reason profitable roofing companies go out of business is cash flow mismanagement. Not profitability. Cash flow. Those are two completely different things and a lot of new owners do not realize it until they are two weeks from missing payroll on a month where they booked $180,000 in revenue.

Here is what you need to understand about roofing cash flow specifically.

Job costing is mandatory, not optional. Every job should have a file (digital or paper) that tracks contract price, material cost, labor cost, dump fees, permit fees, and overhead allocation. At the end of every job, you should know the gross profit on that job within 48 hours of completion. If you do not do this, you will believe you are making 30% margins while actually losing money on half your jobs and making it up on the other half.

Progress billing saves cash flow. On retail jobs over a certain dollar threshold (say, $15,000), structure your contract to collect a deposit at contract signing (where legal in your state), a draw at material delivery, and final payment on completion. Some states restrict deposit amounts on residential work. Know your rules. Where allowed, this is the difference between financing the job yourself and having the customer finance it for you.

Retainage is a commercial reality. If you do any commercial work, expect 5% to 10% of every contract to be held as retainage for 30 to 90 days after completion. Build this into your cash forecast. It is not a surprise the second time it happens.

Insurance restoration cash flow is brutal. You will front materials and labor for 60 to 120 days before the final depreciation check arrives. Your gross margin on paper looks great. Your bank balance tells a different story. Plan accordingly. Keep a line of credit. Do not take on more restoration jobs than your cash position can support.

Use real accounting software from day one. QuickBooks Online or Xero, with a construction-specialist bookkeeper who understands job costing. Not a shoebox of receipts. Not a spreadsheet. Not your spouse trying to figure out class tracking at 11pm. A bookkeeper at $300 to $800 a month is the highest-ROI employee you will hire in year one.

The Mistakes That Sink First-Year Roofing Companies

Every failed first-year shop I have watched has failed from some combination of the same handful of mistakes. Knowing them in advance does not make you immune, but it helps.

Underpricing to win early deals. New shops panic when they lose the first three deals on price, drop their number on deal four, and now they have trained the market that they are the cheap option. Margin loss compounds. You cannot outgrow underpricing.

Hiring a salesperson before owning the sales process. Covered above. It is the most common expensive mistake in year one.

Saying yes to work outside your service area. A job that is 90 miles away feels tempting when your calendar has a hole in it. The windshield time, fuel, labor logistics, and supplier distance will eat every dollar of margin.

No callback or warranty reserve. Every shingle roof will have callbacks. Every single one. If you have not priced callbacks into your job cost (usually 1% to 3% of revenue), your margins are lying to you.

Poor documentation on insurance jobs. If you cannot produce photos, Xactimate scopes, material lists, and signed authorization paperwork for every restoration job, you will lose supplement disputes and sometimes the entire claim.

Skipping the contract or using a cheap template. Your contract is your only protection when something goes wrong. Generic online templates miss critical roofing-specific language around scope, deposits, storm damage, code upgrades, and lien waivers. Spend the money on a real construction attorney once. Use that contract for the next decade.

Mixing personal and business finances. Covered above. Do not do it. Ever.

No backup for the owner. If you get the flu, throw out your back, or have a family emergency in week six, who runs the business? Most solo-owner shops have a single point of failure in the owner. Build at least one person (spouse, business partner, trusted crew lead) who can answer the phone and handle a production emergency.

When Should You Invest in Software?

Software is a force multiplier. It does not replace a broken process. If your sales process is a pad of paper in your truck and you are closing five deals a month, you do not have a software problem. You have a volume problem, and software is not going to fix it.

That said, there is a threshold where operating without real software costs you more than the software would.

Here is the rough progression most operators follow.

Month 1 to 3 (0 to 10 customers): Phone, paper, email, a spreadsheet, and a good notes app. Do not over-invest in tooling you will not use.

Month 3 to 9 (10 to 40 customers): Basic CRM. You cannot remember every follow-up and every inspection in your head anymore. Pick something simple. Do not build a custom workflow. Use it consistently.

Month 9 to 18 (active sales team, 50+ active jobs, multiple crews): Full roofing operating system. CRM, estimating, job management, payment processing, and crew coordination in one place. This is where canvassing-focused tools like RoofKnockers pay for themselves quickly, because door-knocking teams need mapping, lead routing, and rep accountability that generic CRMs do not handle well.

The biggest software mistake new shops make is buying too much, too early. Enterprise roofing platforms with aggressive onboarding fees will happily sell a two-person shop a $800/month package. Do not buy capacity you will not use for nine months. For guidance on evaluating options, our CRM buyer's guide walks through the decision framework.

Path From Solo Operator to 10-Person Crew

The business you run when you have one truck and one sub crew is fundamentally different from the business you run with a 10-person team. Most owners who fail at this transition fail because they try to scale people without scaling systems.

A rough timeline that has worked for the shops I have watched succeed:

Year 1: Solo operator plus one sub crew. Owner does sales, production management, and books. Revenue target $500K to $1.2M depending on market and ticket size. Net take-home is modest. The work is learning the business.

Year 2: Add a production manager or an admin, whichever is the bigger bottleneck. If sales is the bottleneck, the owner is probably doing too much production management. Hire that out first. If production is smooth but the phone is going to voicemail, hire admin first. Revenue target $1M to $2.5M.

Year 3: Second sub crew or first W-2 lead installer. First dedicated salesperson or canvasser. This is the year the owner transitions from doing the work to managing the people who do the work. Mentally painful. Required. Revenue target $2M to $5M.

Year 4 and 5: Sales manager, production manager, dedicated bookkeeper or office manager. By year five, the owner should be working on the business roughly 70% of the time and in the business 30%. Revenue target $5M to $10M for shops that execute.

The owners who get stuck at $1M to $1.5M in revenue forever all have the same problem: they are still the bottleneck on sales, production, or admin, and they refuse to hire through it. Every one of those hires feels expensive in the moment. Every one of them, done correctly, pays for themselves within 90 days.

The Last Thing

Starting a roofing company is not glamorous. Year one is long. You will have weeks where you make less than your crew. You will have Saturdays where you are writing a $12,000 check to a supplier because a customer is 15 days late on a net-30. You will have nights where you wonder if the guy who sold you on "financial freedom" has ever actually owned a business.

The payoff is real. A well-run roofing company is a cash-generating machine once you get past the first 18 months. Owners who make it to year five typically pay themselves a six-figure salary plus distributions, have real enterprise value in the business, and enjoy work that does not require a corporate office or a commute.

The shops that make it have a few things in common. They picked a lane (insurance or retail) and did not drift. They managed cash like it was oxygen. They sold enough deals personally to know their numbers cold before they hired. They invested in systems when the pain of not having systems exceeded the cost of adding them. They treated their crews and their customers like the business depended on both, because it did.

If you are ready to start, start. Do not wait for perfect conditions. Form the LLC, buy the insurance, get the first supplier account, and close your first deal. The playbook above is not a checklist you complete before day one. It is a map you reread every quarter for the first five years.

When you hit the point where you are knocking doors with a team of two or three, and you need mapping, lead routing, and canvasser accountability built for roofing specifically, come take a look at what we built. You can start a free trial and be canvassing inside an hour.

Good luck out there. The industry needs more operators who run the business the right way.