April 1, 2025 • 56 mins
Your roofing company isn’t making enough money—here’s why. In this powerful conversation with second-generation roofing pro Zach Exposito, we dig into the hidden pitfalls that could be costing your company thousands (or more) every year. Zach opens up about the challenges he faced, including hiring missteps, poor role definitions, and inefficient processes, and shares how he turned things around to create a thriving, scalable roofing business.
You’ll learn:
- Why hiring the wrong people can cost you more than you think.
- How to structure your team for growth and efficiency.
- The #1 financial mistake most roofing companies make—and how to fix it.
- What you need to know about running lean while still reinvesting for growth.
Zach’s insights into team building, department structure, and financial strategy are invaluable for owners looking to scale and stay profitable. Don’t let your roofing company fall victim to these common mistakes!
🤖 Have a question? Ask this customized ChatGPT for the answer! Specifically designed for this episode, it’s here to help! Coming soon...
Listen to the full episode (249) 👇
🎧 https://roofingpod.com/spotify
🍏 https://roofingpod.com/apple-podcasts
Resources & Links:
🤝 Join The Roofing & Solar Reform Alliance: http://roofingpod.com/rsra
👉 Take your marketing to the next level: https://roofingpod.com/jobnimbus-marketing
🎯 Join Our Facebook Group: https://roofingpod.com/facebook
IG: https://www.instagram.com/roofingsuccess/
FB: https://www.facebook.com/groups/roofingsuccess
📱 Text Jim @ (612) 512-1812 – Say Hi!
💬 Leave Us a Review: https://roofingpod.com/review
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Are you unknowingly building a business destined to
fail?
Zach Exposito exposes thecritical flaws that almost broke
him and how you can fix thembefore it's too late.
This episode takes you behindthe scenes of a roofing
revolution.
Zach shares his secrets toovercoming early setbacks,
restructuring for success andcreating a business where every
(00:23):
role has purpose for success,and creating a business where
every role has purpose.
Zach Exposito is a secondgeneration roofing pro with a
sharp eye for finance and aneven sharper focus on building
teams From sales to operations.
Zach's approach is a blueprintfor anyone ready to level up
their business.
What makes Zach stand out?
His ability to turn hiringchallenges into opportunities
(00:45):
and his refusal to settle formediocrity.
You'll hear how he redefinedproject management and found the
perfect balance between growthand efficiency.
Grab a notebook.
This episode is packed withinsights that could transform
your business.
Whether you're just startingout or ready to scale, zach's
story will inspire you to thinkbigger and execute better.
(01:07):
Welcome to the Roofing SuccessPodcast.
I'm Jim Alleyne and I'm here tobring you insights from top
leaders in the roofing industryto help you grow and scale your
roofing business.
Welcome back, zach Exposito.
How are you man?
Speaker 2 (01:23):
I'm good, Jim.
Thank you very much for havingme again.
It's a pleasure.
Yeah, man.
Speaker 1 (01:26):
It's always fun, man.
We had a great conversationlast time and you added a lot of
value and I love your story andwhere you came from and how you
got things going and left theleft roofing and tried to get
away and brought it back inright.
Yep, left roofing and tried toget away and brought back in
(01:50):
Right, and and and and and and.
How much opportunity you saw inthe roofing business, even
though you went that route downthe finance route and things
like that.
I think that's a testament tothe business itself, right, like
there's a to the industryitself, that the, the amount of
opportunity, that the amount ofopportunity that's in this
business.
I wanted to just kind of startoff by talking about, you know,
(02:12):
some things.
We were chatting a little bitoff camera and you know there's
always this constant evolutionin business, right, and there's
things that you that you'realways working on long term and
then there's things that you'rekind of they're more new things
that you're working on.
How do you balance that?
(02:32):
Like, let's start talking aboutwhat are the long term, kind of
long term things that you'realways working on in your
roofing business?
Speaker 2 (02:43):
Well, I mean, it's quite challenging and it's kind
of a hard question to answer.
Long-term, I think you know ourgoal is continuous growth and
continuing to service ourclients to the best that we
possibly can, and that's alwaysa challenge in itself, right?
So that in itself is issomething that we're working
(03:07):
towards every day how to bettereach simple process.
Uh, from the simplest things,we try to avoid all the
redundancies and, uh, serviceour clients better and also
expand the business at the sametime and increase our revenue,
but do it, you know, effectivelyand efficiently.
So, um, you know, adding newdepartments is always, always a
(03:27):
slower process than anybodywould like.
So you have the roadmap, and wehave that roadmap as to what
departments we may be missing inour company.
But it's just a process to getthe right person to fill that
department.
But it's just a process to getthe right person to fill that
department.
You know the roles for thedepartment, the procedures for
(03:48):
the department.
All that kind of stuff takestime, takes work, and always
adding a new department to anybusiness is quite challenging in
itself.
So that's something that we'realways constantly working on
long-term is adding departments,and then, once you add those
departments, you also want tobuild that department out and
add team members to it.
(04:08):
So definitely a long-term thingthat we've always been working
on is, you know, recruitment andadding team members to our
business that are going to.
Speaker 1 (04:19):
Let's talk about how that's evolved over time, right?
So when you started off, whatwas the structure of the
departments of your company, andthen which ones have's evolved
over time, right?
So when you started off, what?
What was the structure of thedepartments of your company, and
then which ones have you addedover time?
Speaker 2 (04:31):
I mean I'd say maybe majority of them.
We've added more time.
Um, from the beginning, uh, sowhen I started we basically had
one person that was, uh, youknow, office manager, accounts
payable, accounts receivable,permitting, and I would say she
(04:51):
was more or less also theadministrative assistant in the
office answering phone calls, soon and so forth, also handling
payroll, doing HR.
So we were also a smallerbusiness and we had, you know,
less moving parts and lessrevenue as well.
We also had an officeadministrator and then we had
(05:16):
sales and I kind of started whenI started into the business.
I started in the newconstruction department doing
sales there and trying to growthat business and then trying to
grow the commercial side of thebusiness as well.
(05:38):
So eight years later more orless, we have a permitting
department that has two staffmembers that work there.
We have accounts receivable,accounts payable, bookkeeping,
we have secretary and then wehave our operations department
and sales.
So our sales departmentobviously deals with sales.
(06:03):
We have a new constructionestimator that just does plan
takeoffs on new construction.
Our operations departmentconsists of operations manager,
project administrator, whichkind of assists and facilitates
all of the ongoing projects andhelps keep the clients informed
of the process and handles anyupcoming deliveries, things of
(06:26):
that nature.
And then we also have the fieldside of the operations, which
is our crews.
And well, another one that wasadded was project managers,
which we never had.
Speaker 1 (06:36):
Nice.
How was that change to haveproject managers?
Was that a very positive changefor you?
Was it a struggle at any point?
Speaker 2 (06:46):
You know I wouldn't say a struggle, I'd say it
always has its challenges.
We had at one point, you know,we we got four or five project
managers at the beginning phaseof this and then we ended up
having none shortly after orsometime after, because we came
to the conclusion that weweren't hiring properly for the
(07:09):
role.
Uh, they weren't necessarilyproject managers and they were,
you know, the the, the job theywere supposed to overtake wasn't
really being overtaken.
It was still falling on thatsame person, um, to handle it,
which was either sales myself orthe operations department.
So we ended up kind ofrestructuring the roles and
(07:31):
objectives for the projectmanager and since we've done
that, obviously it's worked outgreat because it alleviates a
lot of the office staff and thesalesperson as well, because
usually that phone call wouldhave gone to the salesperson
prior to us having projectmanagers and you know it makes
their job more difficult to selland focus on new clients moving
(07:53):
forward.
Speaker 1 (07:54):
Yeah, definitely.
I love that story, and I don'tknow if you even realize it or
not, but what the story is to meit's because business is such a
constant iteration thatsometimes you do something and
it doesn't work out the way thatyou hoped, right, like, and so
you created this project managerrole, you hired for it, you
(08:16):
executed on it and then you wentoh man, oh no, maybe it's not
the right.
We didn't structure this right.
We didn't.
It's not the right.
Maybe it's not the right personfor the role, like, there's
always stuff that can happenalong the way, and I you know
when you were, when you, how didyou originally structure it?
(08:37):
And then, what were yourthoughts?
When you restructured the roleLike, what were some of the
things that you were like, man,we, we should have done it this
way, or that's what we did thesecond time around.
This is how we did it thesecond time around.
Speaker 2 (08:49):
Well, prior to bringing our project managers
originally, we remember we neverhad that role on our company,
so that would fall on you knowwhoever was offering um,
handling the operation side ofthe of the projects or usually
it was the salesperson, and youknow they would get a call, so
(09:10):
on and so forth.
Oh, another thing that we alsoadded to that side kind of that
goes hand in hand is runners.
So material deliveries.
That would also at one pointfall on the sales guys.
So we were running very thin.
It was very operational,successful, but I sat back and
(09:32):
took a bigger picture of it andsaid, okay, we want growth and
this is our long-term goal.
We can't achieve it bycontinuing the way that we're
right now.
So initially we kind ofconverted what would be a runner
to kind of a project managerrole, which was kind of where we
(09:55):
failed at originally and wealso didn't really define.
We didn't define the properprocedures and the obligations
for that department and what wasexpected of that department and
those individuals.
Another thing we failed at was,out of fear of losing a customer
(10:20):
, getting a bad reputation and,more than anything, losing money
, we would pick up a lot of theslack that was customer, gaining
a better reputation and, morethan anything, losing money.
We would pick up a lot of theslack that was left off by these
individuals at the beginningbecause they weren't project
managers per se, they weren'treally trained properly.
So to a certain extent it wasour fault internally for not
(10:43):
doing it properly as it shouldhave been done.
So that slack fell on us, whichwe would take over it or we
would micromanage to ensure thatnothing would go wrong.
So you know, it was kind of adisaster, to say the least, on
both sides and it caused a lotof frustration, obviously within
, because micromanaging and thenyou're taking power away from
(11:05):
somebody who you expect or youtold was supposed to be a
project manager on that project.
So it created a lot of conflictand it was.
It wasn't the proper structure,I don't believe, and things
weren't getting done as theyshould have been done without
the reinforcement from otherpeople that were doing other
departments, from other peoplethat were doing other
(11:25):
departments.
Speaker 1 (11:25):
So what was it that where you said, like, what was
the point in time or the thingthat happened when you were like
all right, this is it.
We have to like we've reachedthe end of the road here.
We have to find a new road togo down.
Speaker 2 (11:45):
I mean, I realized it pretty early on.
But, you know, another thingthat we obviously failed at is
that I understood the demandthat we had at the time and the
services that we needed toservice uh.
So you know, we kept them onboard just to, you know,
facilitate those things becausethey were doing a good job, you
(12:06):
know, to the capacity that theycould um like.
Again, I say it's a, it's afailure on our end, I believe,
um, but it's part of the processand you know, everybody learns
throughout these processes.
Uh, but I kind of realized thatearly on, when a lot of things
would fall on myself or otherpeople, uh to take it over,
because it just wasn't done,being properly done, done
(12:28):
properly, or uh, the sourcewasn't really reliable.
So, um, over time, it startedto uh fix itself in the sense of
, you know, uh parting ways.
Uh, either they would part wayswith the company because they
figured that it wasn't going aswell for them, or the way that
they realized, and or we partedways with them because we came
(12:51):
to the conclusion that it wasn'tthe right fit for a company.
And then, you know, we had a, alapse there where we had no
project managers.
We figured out a verysustainable way to operate by
using our operations department,kind of as a project manager
from the office, um, which wasgreat.
(13:12):
But uh, obviously we still needsomebody on the field.
So it took some time to to makethose hires and to find the
right people and then obviouslytrain them.
So it's a it's a slow processbecause you want to make sure
you dedicate time to eachindividual that you hire,
regardless if they come fromanother company.
We do things up verydifferently than everybody else,
so you want to make sure thatyou spend time with them, that
(13:32):
they know the information theyneed to know.
Everybody always comes um as anew candidate that used to work
for another company, that's beenX amount of years in the
industry and they knoweverything, and then you quickly
find out you know that's notnecessarily the case, but it's
not a bad thing either, right?
So what we do is obviously welike to be transparent and we
(13:54):
expect them to be transparentwith us as well and address
where the weaknesses are at andwhatever they're not familiar
with or trained on.
We try to train them on thosethings yeah, that it it's.
Speaker 1 (14:07):
What would you do different if you had to start
over in that, in that process?
Speaker 2 (14:15):
I mean, I'd probably do what we're doing now
currently, which is, you know,hire slowly, um and, and spend
time to train that personproperly, so that when you bring
the next person on, you know,hopefully that person that's
already trained can take overthat role.
Speaker 1 (14:31):
Yeah, I think that that's a big struggle that a lot
of us have as business ownersis we either create a role or
hire for a role but it's notfully fleshed out.
It's just that we need help,right, like you know, like we
need help, we're busy, we likelet's try to solve this problem
with a person, right, like,let's just put a person in that
(14:53):
role instead of really welldefining the role.
Defining the role well, youknow, having a thorough training
process that you're going tobring them through, you know,
taking time.
There's the old um, the a lotof great old hiring analogies
around that high, what's thehigher?
Slow fire, fast, right, allthat type of stuff.
(15:15):
And then but I think that's abig thing and maybe get your
thoughts on this of how, howthings have changed over the
years for you guys is thattraining of people?
You know, I think everyonestarts out with man.
We just need people, right?
Have you decided, no, we'regoing to make sure that we have
(15:37):
a, or we're going to try to.
I'm sure you don't have everyrole in your company.
It's hard to but like, no, inthese specific roles that we
know that we're going to behiring more often, do you?
Have you said, okay, we'regoing to have a 90 day formal
training process or a 60 dayformal training process or
anything like that, or have you,is it just a work in progress?
Okay, we can make this better.
(15:58):
Make that better.
The next person we hire will go.
It'll be better for them.
How have you guys done that?
Speaker 2 (16:03):
Yeah, it's just a work in progress.
I mean, we don't go into itthinking the next person you
know it's going to be where wework we don't go into using that
person as kind of a guidelinefor the next person.
But you know, we obviouslytrain the essentials.
I wouldn't necessarily say it's90 days, but through the whole
90 day period, more or less.
(16:24):
It is training for the mostpart, not, you know, direct, uh,
hands-on, full training, butthroughout the workday, uh,
there'd be a training involvedin there.
Um, so you know it's, it's justit's also hiring the right
people, especially in newdepartments that you're building
(16:45):
, hiring the person that's goingto help innovate that
department and be proactive inaddressing issues and helping
you find solutions to thoseissues.
It's frustrating when sometimesyou hire more people and you
come to the conclusion that allyou're doing is creating more
work for yourself.
You, sometimes you hire morepeople and you come to the
conclusion that all you're doingis creating more work for
(17:06):
yourself.
So that's, you know.
Another thing that we focus onis, you know, trying to create
the right, the right team andbring on the right individuals
on board to join our team.
That can effectively, you know,enhance things, change things
for the better in the companyand and realize where things are
maybe wrong or done wrong andfind a solution for those things
not things for the better inthe company.
And realize where things aremaybe wrong or done wrong and
(17:27):
find a solution for those things, not just the problems.
Speaker 1 (17:31):
That's a big thing.
As you grow and you have theability to hire great people,
you guys have what's a littlebit.
I would say.
You have a unique service mixand a little bit more unique
from a lot of the contractorsthat I speak to, in terms of so
you do new construction, you docommercial and you do
residential, and so I thinkhaving a lot of the contractors
(17:54):
I talk to are you know that wereresidential or were commercial,
you know, and then you havein-house crews and you do
subcontracting, also havesubcontract crews that you
subcontract with.
Let's talk through some of thisin a little bit.
I think one of the things thatI'm always curious about and
I've always heard as achallenging path is new
(18:17):
construction.
Do you guys, are you still veryactive in new construction?
Is that one of your kind ofmore active service offerings?
Speaker 2 (18:31):
I wouldn't necessarily say active, but you
know we so.
When it comes to newconstruction, when it comes to
the industry in general, it'sjust it's very hard to find a
good contractor, subcontractor,like a roofing contractor,
contractor specifically, more sofor general contractors.
And you know builders anddevelopers and people building
new construction projects, um,so, believe it or not, we've
(18:52):
kind of found our good nichethere and our place where you
know people are contractors, arewilling to pay a little bit
better just to make sure thatthose guys are going to show up
when they say they're going toshow up, otherwise it delays the
whole project.
Um, but, with that being said,we do have a very select few and
you know we work for newcontractors as well, but we're
(19:13):
kind of selective and we justdon't bid for everybody, because
that kind of world of newconstruction is a little bit
different.
Uh, you know you can findyourself just bidding projects,
just to bid projects, and neverget awarded anything and you,
just for the sake of thatcontract, you're using your
numbers to negotiate with otherguys, and you know.
(19:33):
And then there's the other sideof it where you know
contractors try lowering you tothe point where there's no
profit to be made on thatproject.
So we've found our select groupof contractors and we're
grateful for them becausethey're a big part of our
business and big part of oursuccess and you know, we
specifically typically only workwith them, we prioritize their
(19:57):
projects because, you know,majority of the time those
projects will be awarded to usbased on our performance in the
past and and the fact that weshow up at the end of the day,
you know, and we make thingsright.
Speaker 1 (20:09):
So, would you say, the key to success there is
finding builders and contractorsthat you can work with that
have the expectation of more ofa higher quality of work versus
just the lowest price.
Absolutely yes.
And then the magic question,zach, is how do you find those
(20:31):
guys?
How do you identify someone whois willing to?
Actually because that's alwaysthe struggle in new construction
right, it's like the race tothe bottom a lot of times, right
, like was it just going throughand bidding a lot of projects
and developing relationships,like what created this group of
(20:57):
contractors and builders thatyou work with?
How did you get to that clientbase?
Speaker 2 (21:08):
I'd say majority of it would be relationship-based
builds referrals from othercontractors that we've worked
with in the past long term, andwhen they get this referral
they're looking for somebodywho's going to be a team player
on their project, get whateverdone that needs to be done and
show up when they need to showup and get the job done properly
.
So majority of it is thatthere's still the case,
(21:32):
obviously, where to buildrelationships you still got to
give each other opportunities.
So we still bid out jobs fornew contractors from time to
time and there's been greatrelationships that have
flourished from a situation likethat where we never knew the
contractor.
We gave them one price and youknow, moving forward we start
(21:54):
bidding on other projects,getting awarded them and having
a great long-term relationshipwith that contractor.
But more so it's morerelationship-based.
Where you find those long termcontractor relationships.
It's not to say that they don'thappen the other way, but
usually it happens byrelationships and referrals.
Speaker 1 (22:16):
Yeah, when you're in the bidding process, how do you
differentiate your value to thatcontractor, Because you know
you don't want to.
I mean, the value isn't inhaving the lowest bid Right.
There's never a value there, sofrom a business perspective.
So is there a way that youfound, or or it's just you bid
(22:36):
these projects.
You start to kind of feel therelationship out, see what kind
of, what kind of you knowcontractors they're looking to
hire.
You know, how is that?
How does that fall into placefor you?
Speaker 2 (22:49):
I mean, we're very transparent.
We don't like to waste a lot oftime.
It's as simple as just.
You know, and nowadays it'ssuch a such a rare thing to find
.
You know, and nowadays it'ssuch a such a rare thing to find
, but it's as simple as pickingup the phone and calling them
and getting a feel for them andjust talking to them openly and
finding out.
You know, what are you guyslooking for?
What is the goal here?
Is there a budget?
Are you guys looking for thecheapest contractor or are you
(23:12):
guys looking for quality?
You know, do you care if theyhave insurance or not?
Is that part of the value thatyou're adding to what they have
to offer?
Those are just conversationsthat just need to be had.
I think it's a conversation thatsaves everybody a whole lot of
hardship and time.
You'd be surprised how manyanswers you get quickly to
(23:37):
identify if it's a good contractthat they're continuing their
relationship with or not.
Based on that one phone call,you could also just find out how
many other bids they're getting.
Sometimes they'll justvoluntarily tell you you know
they're getting 20, 30, you knowsomething outrageous even six,
seven bids.
It's like okay, well, you guysseem like you're.
You know, and I'll tell them.
You know, it seems like youguys are price driven.
(23:58):
Considering the fact that youhave seven bids, I mean, what is
that you're looking for?
Um, you know?
So it's just a conversation,you know?
And uh, sometimes it works outfor the better because they
could see that you know you'reno nonsense and that you know
you don't want to waste yourtime and mean business and you
want to get to the bottom of itand you want to perform and you
want to work and you want to getawarded the job.
(24:19):
I'm not just here to bid onyour job, I want to know how can
I get awarded the job.
So that's a big part of it, forsure.
Speaker 1 (24:27):
That's a big aha moment.
I love pick up the phone,because people don't pick up the
phone nowadays.
It's like the path of leastresistance.
Great, we'll just get our bidin Right Like, we'll just submit
this bid and hope for the best,and pick up that phone, have
(24:48):
those conversations, askquestions.
People will answer questions,they'll.
They'll tell you more than youthat, than you think that
they'll ever tell you right likeit's.
It's amazing how much they willtell you, um, yeah, because
they want their project doneright too.
Right Like they.
And of course, there are somethat are just price shopping and
they just want the lowest priceand they're very, but
understanding their budgets,understanding their timelines,
(25:11):
understanding what they'relooking for is an easy thing.
Now we have the in-house crewsand we subcontract on stuff.
You said that with yourin-house crews, you focus those
that team more on residentialand that on a lot of your
commercial projects you'll dosubcontracted crews.
What got you there?
(25:31):
What?
What determined?
Okay, our crews were.
We feel our crews are bettersuited for our residential work
than our commercial work, or oryou know what was the process
that got you to how youstructured how you're doing that
?
Speaker 2 (25:50):
It was just learning by experience, honestly, as we
grew.
Originally we never really hadthat kind of problem.
Everything was always in-house.
Because of the workload that wehad and the backlog we had, we
were able to manage and handleit with our in-house crews.
But as we continued, as thegrowth continued, we found
(26:12):
ourselves having a bigger issueand a bigger backlog issue when
it came to residential, when wegot our crews tied up and stuck
on you know, a huge commercialproject, uh, roof replacement,
you know, and then you goteverybody else calling saying,
hey, when's my roof gonna getstarted on the residential side,
when the residential side is alot, uh, it's a lot more volume,
(26:34):
um, part of the business, um,you know, guys tear off, yeah,
30 squares, 40 squares, um, ormore.
But you know, for the most partthey could get a quick
turnaround, at least get driedin within a couple days, not one
, two, three days, as commercialtakes much longer than that and
it's a bigger process, um.
(26:55):
So you know that that's wherewe found ourselves.
And then we gave it a shot, justto, you know, and we've done it
the other way around too.
So we ended up working out withgetting our commercial crews
subcontracted for the most partnot always per se we could still
we still do put our in-housecrews on commercial jobs, and
(27:15):
sometimes clients require that,which we also have the unique
ability to offer, um and provide.
But you know, when we figuredout that when you put the
subcontractors on those projects, they could provide a bigger
workforce, um, to get severalmore commercial jobs started at
one point, and then we couldfocus our in-house crews over
here on the residential side,we've done it.
(27:37):
What I was trying to explain isthat we've done it the other
way around too, where we've hadsuch a back, big backlog on
residential where we've stuck asubcontractor in there and it
was a disaster compared toputting a subcontractor on a
commercial job, um, and it'sjust, there's a lot of things
that that that you know, thatthat play a part in that.
Uh, you know the way they'redressed, uh, your housekeeping
(27:59):
manners.
Uh, you know the way they'redressed, uh, your housekeeping
manners, um, you know thecleaning up, protecting the
property, uh, understandingthose things.
And you know, our in-housecrews understand it because they
go through the process with usover time.
They've gone through theprocess with us and they usually
go back.
They're the ones that go backwhen the client is like hey, by
the way, you guys left the stainon my driveway or this or that,
(28:20):
and you know, they've beenthrough the process with us and
they understand those things.
The subcontractor, you know,unfortunately, they usually
don't go back and clean thosethings up and they usually don't
carry them um, so our guys,also uniformed, you know they
know where they need to park, uh, on the property, don't park on
the grass.
So it's, it's different and andit's unique, um, it just takes,
(28:43):
um, you know, takes buildingand experiences over time.
And I, I think we've found that, I mean not to say you don't
have the same thing on thecommercial side, but it's a
little bit different when you'redoing a, you know, uh, um, a
thousand square warehouse, youknow, and nobody even knows you
guys on the roof.
Speaker 1 (29:01):
That's right.
Yeah, there, there's just acouple extra trucks in the
parking lot, right, like it'snot.
You know, when you're atsomeone's house, it's it.
I could that that.
That to me, is a an aha momentis when, when people are at,
when you're at someone's house,it's much more.
There's a much more personalrelationship involved in that.
(29:22):
Um, if that's a good way to putit, like there's to that
customer experience has to bedifferent, and not that you
can't buy good subcontractedcrews that that will park where
you want them and do all that.
But it's, it's, it's uh, youknow, uh, you know, it's just,
that's how it's worked out foryou.
(29:44):
But a lot of this business, alot of roofing contractors, are
sales and marketing companiesthat sell roofing and everything
is subcontracted.
I feel there is a very largeadvantage to having in-house
crews people on your team W2, tobe able to go out and do repair
(30:06):
work on top of the replacementsand to have the flexibility
that you have.
If you need help on acommercial project, you can move
your crews over.
You have a lot more control inthe process.
But I think that a lot ofcontractors struggle or are
worried about hiring andtraining and managing crews.
(30:29):
What advice can you give themon building out in-house crews
for their roofing?
Speaker 2 (30:36):
company.
It's definitely challenging.
We've been very grateful andfortunate to have long-term,
(30:56):
long-lasting in-house crews andI'd like to say that to other
contractors.
That's a good benefit.
You treat the field workers,the field workers, good and you
understand their value, that youknow they're loyal guys and
they'll stick around and andthat helps your business
flourish and they're a big, hugepart of any business and
obviously continuous growth.
But growth, but they're they'refield supporting, they're the
(31:17):
ones getting these jobs actuallydone and they're the ones that
are going out there in the rainto put a tarp or to to do an
emergency prepare for a highvalue customer.
You know these kinds of things.
So it's it's difficult but it'snot impossible.
And you know, like anythingelse you'd have to do, you know
you have to work little bylittle and try it out.
(31:37):
And you know we still findourselves hiring new field
workers where they don'tnecessarily work out and they
end up costing the businessmoney due to, uh, improper
workmanships or improperinstalls.
Um, you know you have, once youstart getting field, uh, the
fleet vehicles as well.
That comes hand in hand withthe crews.
Now you, you know you'reincreasing your overhead with
(31:59):
commercial insurance policies.
Um, you got to make sure thatthat driver's driver's license
is valid.
You know that.
You know their records clean,because then you know that opens
the door for more liability forthe company and more losses.
So it's definitely challenging,but but I think it's something
that's that a lot of businessesin the roofing industry lack
(32:20):
today and it's definitely needed.
I think that's what kind ofstands out when it comes to your
service to your customers.
You're not able to service acustomer the same just having
subcontractors Almost impossible.
(32:40):
I was fortunate enough that whenI came to the business, for the
most part we already hadin-house crews.
We just expanded, developed.
You know we increased our fleet, added new fleet, got rid of
the old fleet.
You know GPS trackers isanother thing.
It was at a point where youknow you got to pick up the
phone and call seven differentpeople to find out where they're
at.
So you know now from a screen.
You know our operationsdepartment.
Anybody for the most part intheir company can see.
(33:02):
You know where these guys areat all times, if they're on
their way to the job, if theyleft the job, so on and so forth
.
You know so little things likethat.
Also with Field Cruise, addingsoftwares was also very
challenging for them to manageand to report back to the office
(33:23):
effectively and efficiently.
Company Cam Job Nimbus.
You know there's a lot ofdifferent softwares and the more
softwares you add, the morechallenging it is for your field
crews.
But it's something that needsto be trained and had and it
definitely is beneficial forin-house crew management, for
sure.
Speaker 1 (33:41):
Yeah, definitely, and that's that it's.
It's just the additionaltraining and management you have
to take that on.
But I mean to what?
Like it does seem invaluable tome.
To me it's, you know, like itjust seems like that's the way
to go, especially into thefuture where you know W-2 is a
(34:02):
big thing in the industry now,going from 1099 to W-2.
If you have subcontractors thatdon't work for anyone else
which happens in this industryat times, there's a, you know
they may not be subcontractorsto the IRS, just so you know.
Speaker 2 (34:20):
Yes, that's true.
I mean you, you hear storiesand you see the way that people
operate and it's it's prettybizarre, it complicates things
more than anything in my opinion, and it doesn't really show a a
determination to your owncompany and and the value that
that you know you hold yourselfup to and you hold your company
up to.
Yeah, I just I don't understandit.
I you know you hold yourself upto and you hold your company up
(34:41):
to.
Yeah, I just I don't understandit.
I you know we'd like to dothings the right way and I mean
we're here to you know, to growthe business, to create
employment for others and tomake money.
Speaker 1 (34:56):
Yeah, you have a.
You came from a financebackground, no-transcript in
(35:24):
running the roofing business.
Some of the things that youtook from your experience in the
finance industry I mean, forthe most part, everything.
Speaker 2 (35:35):
I mean finance is embedded into every kind of
business, regardless of whatindustry or sector you're in.
So having that foundation andhaving that vision and
understanding the importance offinance within a business was
very beneficial to our growth.
Um, I've, you know, looking atthe way other companies are run
(36:05):
and the way, uh, the industry iscurrently with other
contractors, you come to a senseto understand that you know a
lot of these guys are theroofing guys, right, so, and
usually that's how you end up inthe industry.
Otherwise, you know, no saneperson ends up here.
But you know the roofing guys.
(36:28):
I think there's a.
You notice that there's a bigloss in the financial aspect of
it and how to run a company.
Lean, how to run a companyeffectively and efficiently and
how to, more importantly, invest, reinvest in your business,
which I see not too much of umanymore.
Also, uh, and you know, notnecessarily invest in your
equipment, invest in your people, invest in softwares, invest in
your company as a whole.
(36:49):
Um, that's what's going to makeit very successful, but you
know it's it's a bigcontributing factor.
Knowing and understandingfinancials um, knowing and
understanding financials,knowing and understanding you
know job profit, looking at aP&L for a job, understanding you
know where your cost is going,how you could cut costs moving
(37:11):
forward and increase yourprofits.
You know there's money lost.
You got to understand wherethat money ended up going to
make sure you guys don't.
You know the company doesn'tmake the same mistakes moving
forward.
The financial side of it is abig, complex side of it and I
think it's one of the mostimportant sides to it Because
without that you know you reallycan't.
(37:32):
You could have the bestinstallers on the field, the
best everything, but if you knowif your financials aren't
properly aligned, then you havea bigger problem.
Speaker 1 (37:40):
If your financials aren't properly aligned, then
you have a bigger problem.
So for someone that doesn't man, that maybe never read a P&L or
a balance sheet or a cash flowstatement or anything like that,
what are some of the key thingsthat you would look at to
determine the health of abusiness?
Let's maybe on a P&L, right Onthe overall P&L of a roofing
(38:04):
company.
If you, if I gave you a P&Lfrom a roofing company, what
would be the first couple ofthings that you would just kind
of glance over to see what wasin line or not in line?
Speaker 2 (38:15):
Um, I mean, I, I I looked through the whole
financial, through the whole P&L.
It's hard, you know, to justlook at one thing and and not
the other.
So you got to kind of look atfor me at least, and well for
most but you got to look at theeverything.
So you got to look at the P&L.
You got to look at balancesheet, um, income statements, uh
(38:37):
, you have to look at it all asa whole, make sure those balance
out.
You know the income statement.
Your P&L for the most partshould match.
But I I want to look ateverything.
So I want to know, you know,what we're spending and you go,
just go down the P&L.
It's not very that complicated.
You know P&Ls, balance sheets,income statements, Um, those are
(39:00):
the basic fundamentals offinance and it's very, it's not
really that difficult tounderstand and interpret.
What's more difficult, I feel,for most people is how to
realize you know what couldbetter within that P&L.
So just going down andunderstanding you know what your
cost of goods sold is and thencontinuing down the list.
(39:21):
If you see a vehicle on thereunder your fleet that may have
costed you $30,000 in repairsthat year, it might be a good
idea to get rid of that vehicleand replace it with a new
vehicle that's going to cost youless to maintain it less
headaches on the road.
You know it's going to cost youless to maintain it less
(39:42):
headaches on the road.
You're spending the same thatyou're going to spend on it and,
um, you also get a tax crediton that because obviously you're
buying a fleet vehicle.
So these are just things thatyou have to look at and
understand, and if you're notlooking at it.
Anybody could think, okay, well,I've had this truck, you know,
you know, for five years, youknow, and or for 10 years, and
it's the best truck I have.
(40:03):
And yeah, of course I've, youknow, replaced the engine on it
twice.
But replacing an engine onlycosts a thousand, two thousand
dollars and but when you dothese costs and you add them up
over the 10 years, you couldhave had two brand new vehicles.
Your guys would be happier,you'd have less worries, less
headaches, liability, and you'repaying less taxes.
So it's a win-win, but you gotto just look at it and
(40:25):
understand it.
So that's really what I lookfor and what I look at in P&Ls
it's really just making surethat the cost is there, making
sure we're still beingprofitable.
You know the cost is there,making sure we're still being
profitable, seeing where we cancut costs, finding out why
expenses went up this yearversus last year.
(40:46):
Also, doing a comparable, a P&Lcomparable this year versus
last year and see where you'reat and see how lean the
company's running.
You know if you're making lessprofit this year but your
expenses are more.
You know you got to find outwhat's going on and you know
where is it happening, where isit occurring.
Um, it may be something that youcan't control and then you'd
(41:07):
have a better idea as to.
You know, now we got to look atincreasing our um, increasing
the price that we're selling theprojects at, because we're not
cutting it here.
Um, if something that it couldbe controlled, finding out where
that you know that cost isincreasing, and finding out what
you know, what could be cutthere and what could be
controlled within that cost.
(41:27):
So those are just a few thingsthat you know, I look at, and I
think that everybody should belooking at.
You know on how to run the jobsyou then you want to.
You know, go down to your tojob costing and look at each
individual job and see what wentwrong, where materials were
overordered, underordered.
What happened to the materialswhen they were overordered?
(41:50):
You know little.
Things like that make a bigdifference in the company's
financial health, for sure.
Speaker 1 (41:57):
In that job costing?
It's just something that cameto my mind.
If materials were under orderednow that runner has to go out,
pick up materials, drive it tothe job site, do things like
that, are you making sure thatthat time is added into that job
costing?
Speaker 2 (42:19):
How much detail are you making sure is in that job
costing?
No, I mean, I would love forthat to be the case, uh, and in
a perfect world it would be.
But yeah, it's.
You know there's a lot there's.
There's certain things infinance that you have to realize
that it just has to beallocated to kind of like an
overall operating expense forthe business, otherwise you're
going to drive yourself crazy,um, and drive your team crazy as
well.
It's something that's very hardto record, but so that would be
(42:43):
just kind of an overheadexpense, if you will, for that
specific job and the materialwould also be allocated based on
the software that we had.
If you're using QuickBooks, youknow you're making a purchase
order from inventory or from thesupplier and that's, you know,
getting recorded and hittingthat job account.
But yeah, the runner's time andthe runner's cost and fuel for
(43:10):
the vehicle and so on and soforth is not really being
specifically associated withthat project.
Speaker 1 (43:14):
Yeah, what are you looking for?
What is a healthy range to youin gross profit, net profit on a
job or just in general acrossthe whole company?
Speaker 2 (43:28):
It depends.
Residential and commercial aredifferent profit margins.
Commercial is a much higherprofit margin.
New construction is a littlebit lower than commercial roof
replacement, and thenresidential or profit margin is
is a little bit lower than youknow, commercial roof
replacement and then, likeresidential, our profit margin
is probably a little bit lower.
But you have higher volumethere, right?
So it's a better cash flowsector of the business where you
(43:51):
have that.
You know, for those that don'tunderstand financials, it's just
, you know, you have that kindof revolving door of clients
making payments to the company,creating that cash flow.
Commercial side.
It's a little bit less of cashflow wise, but the profit
margins are a little bit bigger.
So it's a little bit complex.
(44:13):
It takes understanding thatResidential, nothing less than
20% is where we aim.
Um, you know, even thoughthat's, uh, that may be a little
bit on the lower end, we alwaysaim higher than that, but the
threshold would be the minimumbottom baseline would be a 20%
and 20% would be a net.
(44:33):
So you're looking at a littlebit more than that.
When I say 20%, we'll run ournumbers hard and then, uh, we'll
do the profit margin based offnet, net, yeah, so so it's not
terrible.
Um, sometimes we got to compete, but we know where we need to
be.
On res, on commercial, um,you're, you're upwards 30, 34,
40, at times, net as well.
Speaker 1 (44:57):
Um, it's just because yeah, you have more, more
outlay, more for more time,right, usually you're it's kind
of you're there's some risk inthe the length of time that you
have your.
You know you have to pay yoursubs or your payroll and your
materials and you know you havethere's things that you have to
pay along the way.
I think that, and I feel likethat's a consideration that some
people don't make, in that,like that, yes, it may have this
(45:19):
, but you have it's like yourmoney's invested for a longer
period of time right, yeah,you're fine.
Speaker 2 (45:25):
In other words, you're basically financing it
for that zero interest.
Yeah.
So you definitely have toaccount for that.
You have to account for theexposure and the liability.
And then you know everythingelse the equipment.
There's usually more equipmentinvolved.
There's more logistics, there'smore managing involved.
There's everything's moreinvolved.
Speaker 1 (45:44):
You know insurance requirements, things of that
nature, so you got to associatethat to those projects.
What are some of the lessonsyou've learned about running
lean, like?
What are some of the some ofthe things that you've been able
to change along the through theyears?
Speaker 2 (46:02):
like to to help to run lean through the years to
help to run lean.
That's tough.
I got to think hard on that onebecause we're always I can't
really remember, and I'll thinkabout it a specific big item,
but for the most part it's justcontinuous budgeting and looking
(46:26):
at your books and looking whatdid we spend last year, what we
expected to spend this year,where can we cut on that?
Speaker 1 (46:32):
we don't necessarily see as a necessary expense, so
the constant eyes on it is whathelps you to do that.
It's not a specific thing likeoh, we cut this out of the
budget and that helped increaseprofitability.
It's just this.
It's the intent, intentionalitythat you have with your, with
(46:53):
your, with your finance on anongoing basis.
You're very you're keeping youreye on the ball the whole time
Correct.
Speaker 2 (47:00):
Correct A hundred percent.
And that goes with.
You know that goes witheverything because when you cut
costs here you could, you couldincrease costs over here, you
know.
So let's cut costs necessarilywhere we don't need it and put
it towards a new salary for anemployee, that where we could
add value to the business.
That goes from anything assimple as you know.
The office cleaning, is itnecessary?
(47:21):
You know, can we get somebodyelse to do the office cleaning?
Do we need it?
Equipment for the office paper,toilet paper, you know every
little thing kind of needs to betaken into account because you
add those things up and you knowobviously pennies add to
dollars.
So you know software iseverything.
(47:41):
Vehicle maintenance, vehiclecost is a big uh, because a lot
of money goes, goes there.
Uh, equipment costs, you knowif you're spending.
You know x amount here.
You know this year, if you knowyou're you increase on on nail
guns and equipment, you know 30,40 percent.
You know you got to figure outwhat's going on there.
Maybe you got to get adifferent mechanic for your
(48:03):
tools.
Maybe you know they're goingmissing somewhere somehow.
Maybe you got to track thembetter.
Something needs to be done.
So it's not necessarily cuttingcosts all the time, um, but you
know, identifying where the youknow issues may be occurring
related to cost, that could beaddressed.
Something similar to that,ladders, is another one.
(48:23):
You know, ladders are expensiveand they get lost way too
frequently and way too often.
Um, yeah, so, yeah, exactly so.
Learning how to track thosethings and and keep
accountability for them and keepothers accountable for them
obviously helped you save in thelong term you had mentioned
(48:43):
reinvestment and I think this isa big thing for people to think
about.
Speaker 1 (48:46):
I think a lot of people take money out of their
businesses too soon.
I think that they don't reallyproject what type of
reinvestment they'll need to getto their new goals.
I think there's a lot of timesthere's a gap there.
It's just like they just set anew goal and don't think about
(49:09):
what it's going to take to getthere from an investment.
You know, like there's aninvestment, there's an
investment in marketing, there'san investment in team, there's
an investment in equipment.
Like I think that a lot of it'snot focused on again and it's
probably just your focus on it.
But not focused on again andit's probably just your focus on
it.
But how can, how should someonethink about the reinvestment in
their business to continue togrow and build and become a more
(49:32):
stable and successful company?
Speaker 2 (49:36):
Um, I mean, you obviously have to identify a
roadmap for the business andunderstand that and uh, and put
into the fundamentals as to howthat's going to enhance the
business, because it's notnecessarily a case where, you
know, adding the vision oradding the apartment is not
really going to contribute tothe long-term success or growth
of that business.
(49:57):
Maybe not at that given time ormaybe not at all.
So just because you know and Iadvise a lot of people not to
look at other businesses and theway other businesses are
running things, because if youdo it your way and you do it
through trial and error, and youfigure out the right way and
the correct way and you do itthe financial way as well, that
a lot of people aren't doing itYou'll come to the realization
(50:17):
that you might be doing thingscompletely different but much
better than companies that havebeen around for much longer.
So just focus on yourself andreinvest in things that you need
that become issues or createmore expenses and increase costs
(50:39):
for you.
At the time, I gave the exampleof a fleet vehicle.
I think that's definitely agreat investment.
Um, you know, uh, ladders isanother one.
Uh, damaged ladders, get rid ofthem.
Buy new ladders because one ofyour guys falling on that ladder
is going to cost you a lot moremoney than a brand new ladder
(50:59):
is.
So you know realizing what yourexposures and liabilities are,
because that is, you know, a bigpart of it.
And again it goes to trial anderror.
You know when nobody everthinks of those things until you
get that guy that unfortunatelyfalls from the ladder and then
you you understand what a costis associated to that.
You know and you also want tomake sure that you give your
(51:23):
guys a safe working environment.
You know and you also want tomake sure that you give your
guys a safe working environment.
So those kinds of thingscontribute to the success of the
business and it's definitelyvery important to reinvest in
them.
Pay yourself a salary.
Focus on the business.
Your salary will increase overtime, don't you know?
(51:43):
Take the net profits as yoursalary but?
Speaker 1 (51:48):
but, zach, there's a nice, there's a nice boat, slip
down and down there, not too farfrom you.
You got to fill it withsomething.
You got to get that you got toget well, yeah, I mean there's
other things, that you spend themoney you could get a nice high
rise down there and brickle orsomething like you know.
Like thinking of Miami and theFlorida market.
(52:13):
The Florida market is, you know, is very challenging with all
the all of the insurance lawchanges, all of the lot, you
know, legislative changes thathave been happening through the
years.
How are you looking atnavigating all of the challenges
, not only from the Floridastate laws, but just the changes
(52:33):
and challenges facing theroofing industry?
How are you thinking about thatand what are you doing to make
sure that Z roofing andwaterproofing is around long
term?
Speaker 2 (52:46):
to make sure that Z roofing and waterproofing is
around long term.
Just adjusting, man, and youknow it obviously has to do with
you know it ties back intofinancials.
Certain laws don't haveanything to do with financials,
but we adjust to them and we dowhatever we need to do.
If it's anything to do withlegality, we have our legal team
that handles that and puts inwhatever we need to be.
If it's anything to do withlegality, we have um, we have
(53:06):
our legal um you know team thatthat handles that and puts in
whatever we need to be put intothe contract.
Um, staying on top of those,those new laws and those new
changes, so you could adjust intime and it's not late, too late
, um.
And then, uh, one of the thingsthat kind of continuously
changes in our market and justchanged again, is the building
(53:26):
code, the Florida building code,and it's just understanding and
adapting to that change andfinding out, okay, there's a new
building code change.
It requires different stringentmethods of installation, some
for the better, some for theworse.
But you got to see now what,what is approved, what can we
install and what is the costassociated to it, because you
(53:49):
know this is what we're what ourjob costing was running at over
here with this um, with thisroofing system.
Now, what is this going to costus?
And now you know there's seven,several different options
available, differentmanufacturers, different
products, different methods ofinstallation.
So we sat down and we kind ofran the numbers hard.
(54:09):
So you know what is this systemgoing to cost us compared to
this system, compared to thissystem, compared to this system,
compared to this system, andwhat are the requirements for
all of the installations.
So this system requires, youknow, three rows of nails and
cap, six inches on center.
This one requires two rows, 12inches on center.
So we do the math with the, youknow, and then this row might
(54:33):
cover 10 squares, this one mightcover two squares, right, so
it's all cost based and it'sjust running those numbers and
figuring out the hard numbersand coming down to the penny
with the system itself and where, where our target point is
going to be.
Where am I going to direct mysales guys?
How are they going to sell theproduct, what are we going to
pitch to clients and what numberis it going to be sold at?
Speaker 1 (54:56):
Yeah.
Speaker 2 (54:57):
So a lot of people, you know, with quick changes
like this in the market don'tadjust in time and they just
continue doing the same thingthey were doing Same price and
different system, differentprices, different product itself
.
So they might not necessarilybe making as much profit as they
think they're making andespecially if they're not
looking at their job costing,it's going to be too late for
(55:18):
them to figure that out,unfortunately.
Speaker 1 (55:21):
Don't make it too late for you Know your numbers.
It's the most important part ofbusiness.
Don't make it too late for you.
Focus on your know.
Your numbers is you know.
It's it's an the most importantpart of business.
Zach, I appreciate your timetoday, man.
This has been another episodeof the Roofing Success Podcast.
Thank you for tuning into theRoofing Success Podcast.
For more valuable content,visit roofingsuccesspodcastcom
(55:43):
While there, check out oursponsors for exclusive offers,
shop for merchandise and sign upfor our newsletter for industry
updates and tips.
Also join the Roofing SuccessFacebook group to connect with
other professionals and stayupdated on the latest trends.
If you enjoyed this episode,please subscribe, like, share
and leave a comment.
(56:03):
Your support helps us continueto bring you top industry
insights.
The website link is in thedescription.
Thanks for listening you.
Are you unknowingly building a business destined to
fail?
Zach Exposito exposes thecritical flaws that almost broke
him and how you can fix thembefore it's too late.
This episode takes you behindthe scenes of a roofing
revolution.
Zach shares his secrets toovercoming early setbacks,
restructuring for success andcreating a business where every
(00:23):
role has purpose for success,and creating a business where
every role has purpose.
Zach Exposito is a secondgeneration roofing pro with a
sharp eye for finance and aneven sharper focus on building
teams From sales to operations.
Zach's approach is a blueprintfor anyone ready to level up
their business.
What makes Zach stand out?
His ability to turn hiringchallenges into opportunities
(00:45):
and his refusal to settle formediocrity.
You'll hear how he redefinedproject management and found the
perfect balance between growthand efficiency.
Grab a notebook.
This episode is packed withinsights that could transform
your business.
Whether you're just startingout or ready to scale, zach's
story will inspire you to thinkbigger and execute better.
(01:07):
Welcome to the Roofing SuccessPodcast.
I'm Jim Alleyne and I'm here tobring you insights from top
leaders in the roofing industryto help you grow and scale your
roofing business.
Welcome back, zach Exposito.
How are you man?
Speaker 2 (01:23):
I'm good, Jim.
Thank you very much for havingme again.
It's a pleasure.
Yeah, man.
Speaker 1 (01:26):
It's always fun, man.
We had a great conversationlast time and you added a lot of
value and I love your story andwhere you came from and how you
got things going and left theleft roofing and tried to get
away and brought it back inright.
Yep, left roofing and tried toget away and brought back in
(01:50):
Right, and and and and and and.
How much opportunity you saw inthe roofing business, even
though you went that route downthe finance route and things
like that.
I think that's a testament tothe business itself, right, like
there's a to the industryitself, that the, the amount of
opportunity, that the amount ofopportunity that's in this
business.
I wanted to just kind of startoff by talking about, you know,
(02:12):
some things.
We were chatting a little bitoff camera and you know there's
always this constant evolutionin business, right, and there's
things that you that you'realways working on long term and
then there's things that you'rekind of they're more new things
that you're working on.
How do you balance that?
(02:32):
Like, let's start talking aboutwhat are the long term, kind of
long term things that you'realways working on in your
roofing business?
Speaker 2 (02:43):
Well, I mean, it's quite challenging and it's kind
of a hard question to answer.
Long-term, I think you know ourgoal is continuous growth and
continuing to service ourclients to the best that we
possibly can, and that's alwaysa challenge in itself, right?
So that in itself is issomething that we're working
(03:07):
towards every day how to bettereach simple process.
Uh, from the simplest things,we try to avoid all the
redundancies and, uh, serviceour clients better and also
expand the business at the sametime and increase our revenue,
but do it, you know, effectivelyand efficiently.
So, um, you know, adding newdepartments is always, always a
(03:27):
slower process than anybodywould like.
So you have the roadmap, and wehave that roadmap as to what
departments we may be missing inour company.
But it's just a process to getthe right person to fill that
department.
But it's just a process to getthe right person to fill that
department.
You know the roles for thedepartment, the procedures for
(03:48):
the department.
All that kind of stuff takestime, takes work, and always
adding a new department to anybusiness is quite challenging in
itself.
So that's something that we'realways constantly working on
long-term is adding departments,and then, once you add those
departments, you also want tobuild that department out and
add team members to it.
(04:08):
So definitely a long-term thingthat we've always been working
on is, you know, recruitment andadding team members to our
business that are going to.
Speaker 1 (04:19):
Let's talk about how that's evolved over time, right?
So when you started off, whatwas the structure of the
departments of your company, andthen which ones have's evolved
over time, right?
So when you started off, what?
What was the structure of thedepartments of your company, and
then which ones have you addedover time?
Speaker 2 (04:31):
I mean I'd say maybe majority of them.
We've added more time.
Um, from the beginning, uh, sowhen I started we basically had
one person that was, uh, youknow, office manager, accounts
payable, accounts receivable,permitting, and I would say she
(04:51):
was more or less also theadministrative assistant in the
office answering phone calls, soon and so forth, also handling
payroll, doing HR.
So we were also a smallerbusiness and we had, you know,
less moving parts and lessrevenue as well.
We also had an officeadministrator and then we had
(05:16):
sales and I kind of started whenI started into the business.
I started in the newconstruction department doing
sales there and trying to growthat business and then trying to
grow the commercial side of thebusiness as well.
(05:38):
So eight years later more orless, we have a permitting
department that has two staffmembers that work there.
We have accounts receivable,accounts payable, bookkeeping,
we have secretary and then wehave our operations department
and sales.
So our sales departmentobviously deals with sales.
(06:03):
We have a new constructionestimator that just does plan
takeoffs on new construction.
Our operations departmentconsists of operations manager,
project administrator, whichkind of assists and facilitates
all of the ongoing projects andhelps keep the clients informed
of the process and handles anyupcoming deliveries, things of
(06:26):
that nature.
And then we also have the fieldside of the operations, which
is our crews.
And well, another one that wasadded was project managers,
which we never had.
Speaker 1 (06:36):
Nice.
How was that change to haveproject managers?
Was that a very positive changefor you?
Was it a struggle at any point?
Speaker 2 (06:46):
You know I wouldn't say a struggle, I'd say it
always has its challenges.
We had at one point, you know,we we got four or five project
managers at the beginning phaseof this and then we ended up
having none shortly after orsometime after, because we came
to the conclusion that weweren't hiring properly for the
(07:09):
role.
Uh, they weren't necessarilyproject managers and they were,
you know, the the, the job theywere supposed to overtake wasn't
really being overtaken.
It was still falling on thatsame person, um, to handle it,
which was either sales myself orthe operations department.
So we ended up kind ofrestructuring the roles and
(07:31):
objectives for the projectmanager and since we've done
that, obviously it's worked outgreat because it alleviates a
lot of the office staff and thesalesperson as well, because
usually that phone call wouldhave gone to the salesperson
prior to us having projectmanagers and you know it makes
their job more difficult to selland focus on new clients moving
(07:53):
forward.
Speaker 1 (07:54):
Yeah, definitely.
I love that story, and I don'tknow if you even realize it or
not, but what the story is to meit's because business is such a
constant iteration thatsometimes you do something and
it doesn't work out the way thatyou hoped, right, like, and so
you created this project managerrole, you hired for it, you
(08:16):
executed on it and then you wentoh man, oh no, maybe it's not
the right.
We didn't structure this right.
We didn't.
It's not the right.
Maybe it's not the right personfor the role, like, there's
always stuff that can happenalong the way, and I you know
when you were, when you, how didyou originally structure it?
(08:37):
And then, what were yourthoughts?
When you restructured the roleLike, what were some of the
things that you were like, man,we, we should have done it this
way, or that's what we did thesecond time around.
This is how we did it thesecond time around.
Speaker 2 (08:49):
Well, prior to bringing our project managers
originally, we remember we neverhad that role on our company,
so that would fall on you knowwhoever was offering um,
handling the operation side ofthe of the projects or usually
it was the salesperson, and youknow they would get a call, so
(09:10):
on and so forth.
Oh, another thing that we alsoadded to that side kind of that
goes hand in hand is runners.
So material deliveries.
That would also at one pointfall on the sales guys.
So we were running very thin.
It was very operational,successful, but I sat back and
(09:32):
took a bigger picture of it andsaid, okay, we want growth and
this is our long-term goal.
We can't achieve it bycontinuing the way that we're
right now.
So initially we kind ofconverted what would be a runner
to kind of a project managerrole, which was kind of where we
(09:55):
failed at originally and wealso didn't really define.
We didn't define the properprocedures and the obligations
for that department and what wasexpected of that department and
those individuals.
Another thing we failed at was,out of fear of losing a customer
(10:20):
, getting a bad reputation and,more than anything, losing money
, we would pick up a lot of theslack that was customer, gaining
a better reputation and, morethan anything, losing money.
We would pick up a lot of theslack that was left off by these
individuals at the beginningbecause they weren't project
managers per se, they weren'treally trained properly.
So to a certain extent it wasour fault internally for not
(10:43):
doing it properly as it shouldhave been done.
So that slack fell on us, whichwe would take over it or we
would micromanage to ensure thatnothing would go wrong.
So you know, it was kind of adisaster, to say the least, on
both sides and it caused a lotof frustration, obviously within
, because micromanaging and thenyou're taking power away from
(11:05):
somebody who you expect or youtold was supposed to be a
project manager on that project.
So it created a lot of conflictand it was.
It wasn't the proper structure,I don't believe, and things
weren't getting done as theyshould have been done without
the reinforcement from otherpeople that were doing other
departments, from other peoplethat were doing other
(11:25):
departments.
Speaker 1 (11:25):
So what was it that where you said, like, what was
the point in time or the thingthat happened when you were like
all right, this is it.
We have to like we've reachedthe end of the road here.
We have to find a new road togo down.
Speaker 2 (11:45):
I mean, I realized it pretty early on.
But, you know, another thingthat we obviously failed at is
that I understood the demandthat we had at the time and the
services that we needed toservice uh.
So you know, we kept them onboard just to, you know,
facilitate those things becausethey were doing a good job, you
(12:06):
know, to the capacity that theycould um like.
Again, I say it's a, it's afailure on our end, I believe,
um, but it's part of the processand you know, everybody learns
throughout these processes.
Uh, but I kind of realized thatearly on, when a lot of things
would fall on myself or otherpeople, uh to take it over,
because it just wasn't done,being properly done, done
(12:28):
properly, or uh, the sourcewasn't really reliable.
So, um, over time, it startedto uh fix itself in the sense of
, you know, uh parting ways.
Uh, either they would part wayswith the company because they
figured that it wasn't going aswell for them, or the way that
they realized, and or we partedways with them because we came
(12:51):
to the conclusion that it wasn'tthe right fit for a company.
And then, you know, we had a, alapse there where we had no
project managers.
We figured out a verysustainable way to operate by
using our operations department,kind of as a project manager
from the office, um, which wasgreat.
(13:12):
But uh, obviously we still needsomebody on the field.
So it took some time to to makethose hires and to find the
right people and then obviouslytrain them.
So it's a it's a slow processbecause you want to make sure
you dedicate time to eachindividual that you hire,
regardless if they come fromanother company.
We do things up verydifferently than everybody else,
so you want to make sure thatyou spend time with them, that
(13:32):
they know the information theyneed to know.
Everybody always comes um as anew candidate that used to work
for another company, that's beenX amount of years in the
industry and they knoweverything, and then you quickly
find out you know that's notnecessarily the case, but it's
not a bad thing either, right?
So what we do is obviously welike to be transparent and we
(13:54):
expect them to be transparentwith us as well and address
where the weaknesses are at andwhatever they're not familiar
with or trained on.
We try to train them on thosethings yeah, that it it's.
Speaker 1 (14:07):
What would you do different if you had to start
over in that, in that process?
Speaker 2 (14:15):
I mean, I'd probably do what we're doing now
currently, which is, you know,hire slowly, um and, and spend
time to train that personproperly, so that when you bring
the next person on, you know,hopefully that person that's
already trained can take overthat role.
Speaker 1 (14:31):
Yeah, I think that that's a big struggle that a lot
of us have as business ownersis we either create a role or
hire for a role but it's notfully fleshed out.
It's just that we need help,right, like you know, like we
need help, we're busy, we likelet's try to solve this problem
with a person, right, like,let's just put a person in that
(14:53):
role instead of really welldefining the role.
Defining the role well, youknow, having a thorough training
process that you're going tobring them through, you know,
taking time.
There's the old um, the a lotof great old hiring analogies
around that high, what's thehigher?
Slow fire, fast, right, allthat type of stuff.
(15:15):
And then but I think that's abig thing and maybe get your
thoughts on this of how, howthings have changed over the
years for you guys is thattraining of people?
You know, I think everyonestarts out with man.
We just need people, right?
Have you decided, no, we'regoing to make sure that we have
(15:37):
a, or we're going to try to.
I'm sure you don't have everyrole in your company.
It's hard to but like, no, inthese specific roles that we
know that we're going to behiring more often, do you?
Have you said, okay, we'regoing to have a 90 day formal
training process or a 60 dayformal training process or
anything like that, or have you,is it just a work in progress?
Okay, we can make this better.
(15:58):
Make that better.
The next person we hire will go.
It'll be better for them.
How have you guys done that?
Speaker 2 (16:03):
Yeah, it's just a work in progress.
I mean, we don't go into itthinking the next person you
know it's going to be where wework we don't go into using that
person as kind of a guidelinefor the next person.
But you know, we obviouslytrain the essentials.
I wouldn't necessarily say it's90 days, but through the whole
90 day period, more or less.
(16:24):
It is training for the mostpart, not, you know, direct, uh,
hands-on, full training, butthroughout the workday, uh,
there'd be a training involvedin there.
Um, so you know it's, it's justit's also hiring the right
people, especially in newdepartments that you're building
(16:45):
, hiring the person that's goingto help innovate that
department and be proactive inaddressing issues and helping
you find solutions to thoseissues.
It's frustrating when sometimesyou hire more people and you
come to the conclusion that allyou're doing is creating more
work for yourself.
You, sometimes you hire morepeople and you come to the
conclusion that all you're doingis creating more work for
(17:06):
yourself.
So that's, you know.
Another thing that we focus onis, you know, trying to create
the right, the right team andbring on the right individuals
on board to join our team.
That can effectively, you know,enhance things, change things
for the better in the companyand and realize where things are
maybe wrong or done wrong andfind a solution for those things
not things for the better inthe company.
And realize where things aremaybe wrong or done wrong and
(17:27):
find a solution for those things, not just the problems.
Speaker 1 (17:31):
That's a big thing.
As you grow and you have theability to hire great people,
you guys have what's a littlebit.
I would say.
You have a unique service mixand a little bit more unique
from a lot of the contractorsthat I speak to, in terms of so
you do new construction, you docommercial and you do
residential, and so I thinkhaving a lot of the contractors
(17:54):
I talk to are you know that wereresidential or were commercial,
you know, and then you havein-house crews and you do
subcontracting, also havesubcontract crews that you
subcontract with.
Let's talk through some of thisin a little bit.
I think one of the things thatI'm always curious about and
I've always heard as achallenging path is new
(18:17):
construction.
Do you guys, are you still veryactive in new construction?
Is that one of your kind ofmore active service offerings?
Speaker 2 (18:31):
I wouldn't necessarily say active, but you
know we so.
When it comes to newconstruction, when it comes to
the industry in general, it'sjust it's very hard to find a
good contractor, subcontractor,like a roofing contractor,
contractor specifically, more sofor general contractors.
And you know builders anddevelopers and people building
new construction projects, um,so, believe it or not, we've
(18:52):
kind of found our good nichethere and our place where you
know people are contractors, arewilling to pay a little bit
better just to make sure thatthose guys are going to show up
when they say they're going toshow up, otherwise it delays the
whole project.
Um, but, with that being said,we do have a very select few and
you know we work for newcontractors as well, but we're
(19:13):
kind of selective and we justdon't bid for everybody, because
that kind of world of newconstruction is a little bit
different.
Uh, you know you can findyourself just bidding projects,
just to bid projects, and neverget awarded anything and you,
just for the sake of thatcontract, you're using your
numbers to negotiate with otherguys, and you know.
(19:33):
And then there's the other sideof it where you know
contractors try lowering you tothe point where there's no
profit to be made on thatproject.
So we've found our select groupof contractors and we're
grateful for them becausethey're a big part of our
business and big part of oursuccess and you know, we
specifically typically only workwith them, we prioritize their
(19:57):
projects because, you know,majority of the time those
projects will be awarded to usbased on our performance in the
past and and the fact that weshow up at the end of the day,
you know, and we make thingsright.
Speaker 1 (20:09):
So, would you say, the key to success there is
finding builders and contractorsthat you can work with that
have the expectation of more ofa higher quality of work versus
just the lowest price.
Absolutely yes.
And then the magic question,zach, is how do you find those
(20:31):
guys?
How do you identify someone whois willing to?
Actually because that's alwaysthe struggle in new construction
right, it's like the race tothe bottom a lot of times, right
, like was it just going throughand bidding a lot of projects
and developing relationships,like what created this group of
(20:57):
contractors and builders thatyou work with?
How did you get to that clientbase?
Speaker 2 (21:08):
I'd say majority of it would be relationship-based
builds referrals from othercontractors that we've worked
with in the past long term, andwhen they get this referral
they're looking for somebodywho's going to be a team player
on their project, get whateverdone that needs to be done and
show up when they need to showup and get the job done properly
.
So majority of it is thatthere's still the case,
(21:32):
obviously, where to buildrelationships you still got to
give each other opportunities.
So we still bid out jobs fornew contractors from time to
time and there's been greatrelationships that have
flourished from a situation likethat where we never knew the
contractor.
We gave them one price and youknow, moving forward we start
(21:54):
bidding on other projects,getting awarded them and having
a great long-term relationshipwith that contractor.
But more so it's morerelationship-based.
Where you find those long termcontractor relationships.
It's not to say that they don'thappen the other way, but
usually it happens byrelationships and referrals.
Speaker 1 (22:16):
Yeah, when you're in the bidding process, how do you
differentiate your value to thatcontractor, Because you know
you don't want to.
I mean, the value isn't inhaving the lowest bid Right.
There's never a value there, sofrom a business perspective.
So is there a way that youfound, or or it's just you bid
(22:36):
these projects.
You start to kind of feel therelationship out, see what kind
of, what kind of you knowcontractors they're looking to
hire.
You know, how is that?
How does that fall into placefor you?
Speaker 2 (22:49):
I mean, we're very transparent.
We don't like to waste a lot oftime.
It's as simple as just.
You know, and nowadays it'ssuch a such a rare thing to find
.
You know, and nowadays it'ssuch a such a rare thing to find
, but it's as simple as pickingup the phone and calling them
and getting a feel for them andjust talking to them openly and
finding out.
You know, what are you guyslooking for?
What is the goal here?
Is there a budget?
Are you guys looking for thecheapest contractor or are you
(23:12):
guys looking for quality?
You know, do you care if theyhave insurance or not?
Is that part of the value thatyou're adding to what they have
to offer?
Those are just conversationsthat just need to be had.
I think it's a conversation thatsaves everybody a whole lot of
hardship and time.
You'd be surprised how manyanswers you get quickly to
(23:37):
identify if it's a good contractthat they're continuing their
relationship with or not.
Based on that one phone call,you could also just find out how
many other bids they're getting.
Sometimes they'll justvoluntarily tell you you know
they're getting 20, 30, you knowsomething outrageous even six,
seven bids.
It's like okay, well, you guysseem like you're.
You know, and I'll tell them.
You know, it seems like youguys are price driven.
(23:58):
Considering the fact that youhave seven bids, I mean, what is
that you're looking for?
Um, you know?
So it's just a conversation,you know?
And uh, sometimes it works outfor the better because they
could see that you know you'reno nonsense and that you know
you don't want to waste yourtime and mean business and you
want to get to the bottom of itand you want to perform and you
want to work and you want to getawarded the job.
(24:19):
I'm not just here to bid onyour job, I want to know how can
I get awarded the job.
So that's a big part of it, forsure.
Speaker 1 (24:27):
That's a big aha moment.
I love pick up the phone,because people don't pick up the
phone nowadays.
It's like the path of leastresistance.
Great, we'll just get our bidin Right Like, we'll just submit
this bid and hope for the best,and pick up that phone, have
(24:48):
those conversations, askquestions.
People will answer questions,they'll.
They'll tell you more than youthat, than you think that
they'll ever tell you right likeit's.
It's amazing how much they willtell you, um, yeah, because
they want their project doneright too.
Right Like they.
And of course, there are somethat are just price shopping and
they just want the lowest priceand they're very, but
understanding their budgets,understanding their timelines,
(25:11):
understanding what they'relooking for is an easy thing.
Now we have the in-house crewsand we subcontract on stuff.
You said that with yourin-house crews, you focus those
that team more on residentialand that on a lot of your
commercial projects you'll dosubcontracted crews.
What got you there?
(25:31):
What?
What determined?
Okay, our crews were.
We feel our crews are bettersuited for our residential work
than our commercial work, or oryou know what was the process
that got you to how youstructured how you're doing that
?
Speaker 2 (25:50):
It was just learning by experience, honestly, as we
grew.
Originally we never really hadthat kind of problem.
Everything was always in-house.
Because of the workload that wehad and the backlog we had, we
were able to manage and handleit with our in-house crews.
But as we continued, as thegrowth continued, we found
(26:12):
ourselves having a bigger issueand a bigger backlog issue when
it came to residential, when wegot our crews tied up and stuck
on you know, a huge commercialproject, uh, roof replacement,
you know, and then you goteverybody else calling saying,
hey, when's my roof gonna getstarted on the residential side,
when the residential side is alot, uh, it's a lot more volume,
(26:34):
um, part of the business, um,you know, guys tear off, yeah,
30 squares, 40 squares, um, ormore.
But you know, for the most partthey could get a quick
turnaround, at least get driedin within a couple days, not one
, two, three days, as commercialtakes much longer than that and
it's a bigger process, um.
(26:55):
So you know that that's wherewe found ourselves.
And then we gave it a shot, justto, you know, and we've done it
the other way around too.
So we ended up working out withgetting our commercial crews
subcontracted for the most partnot always per se we could still
we still do put our in-housecrews on commercial jobs, and
(27:15):
sometimes clients require that,which we also have the unique
ability to offer, um and provide.
But you know, when we figuredout that when you put the
subcontractors on those projects, they could provide a bigger
workforce, um, to get severalmore commercial jobs started at
one point, and then we couldfocus our in-house crews over
here on the residential side,we've done it.
(27:37):
What I was trying to explain isthat we've done it the other
way around too, where we've hadsuch a back, big backlog on
residential where we've stuck asubcontractor in there and it
was a disaster compared toputting a subcontractor on a
commercial job, um, and it'sjust, there's a lot of things
that that that you know, thatthat play a part in that.
Uh, you know the way they'redressed, uh, your housekeeping
(27:59):
manners.
Uh, you know the way they'redressed, uh, your housekeeping
manners, um, you know thecleaning up, protecting the
property, uh, understandingthose things.
And you know, our in-housecrews understand it because they
go through the process with usover time.
They've gone through theprocess with us and they usually
go back.
They're the ones that go backwhen the client is like hey, by
the way, you guys left the stainon my driveway or this or that,
(28:20):
and you know, they've beenthrough the process with us and
they understand those things.
The subcontractor, you know,unfortunately, they usually
don't go back and clean thosethings up and they usually don't
carry them um, so our guys,also uniformed, you know they
know where they need to park, uh, on the property, don't park on
the grass.
So it's, it's different and andit's unique, um, it just takes,
(28:43):
um, you know, takes buildingand experiences over time.
And I, I think we've found that, I mean not to say you don't
have the same thing on thecommercial side, but it's a
little bit different when you'redoing a, you know, uh, um, a
thousand square warehouse, youknow, and nobody even knows you
guys on the roof.
Speaker 1 (29:01):
That's right.
Yeah, there, there's just acouple extra trucks in the
parking lot, right, like it'snot.
You know, when you're atsomeone's house, it's it.
I could that that.
That to me, is a an aha momentis when, when people are at,
when you're at someone's house,it's much more.
There's a much more personalrelationship involved in that.
(29:22):
Um, if that's a good way to putit, like there's to that
customer experience has to bedifferent, and not that you
can't buy good subcontractedcrews that that will park where
you want them and do all that.
But it's, it's, it's uh, youknow, uh, you know, it's just,
that's how it's worked out foryou.
(29:44):
But a lot of this business, alot of roofing contractors, are
sales and marketing companiesthat sell roofing and everything
is subcontracted.
I feel there is a very largeadvantage to having in-house
crews people on your team W2, tobe able to go out and do repair
(30:06):
work on top of the replacementsand to have the flexibility
that you have.
If you need help on acommercial project, you can move
your crews over.
You have a lot more control inthe process.
But I think that a lot ofcontractors struggle or are
worried about hiring andtraining and managing crews.
(30:29):
What advice can you give themon building out in-house crews
for their roofing?
Speaker 2 (30:36):
company.
It's definitely challenging.
We've been very grateful andfortunate to have long-term,
(30:56):
long-lasting in-house crews andI'd like to say that to other
contractors.
That's a good benefit.
You treat the field workers,the field workers, good and you
understand their value, that youknow they're loyal guys and
they'll stick around and andthat helps your business
flourish and they're a big, hugepart of any business and
obviously continuous growth.
But growth, but they're they'refield supporting, they're the
(31:17):
ones getting these jobs actuallydone and they're the ones that
are going out there in the rainto put a tarp or to to do an
emergency prepare for a highvalue customer.
You know these kinds of things.
So it's it's difficult but it'snot impossible.
And you know, like anythingelse you'd have to do, you know
you have to work little bylittle and try it out.
(31:37):
And you know we still findourselves hiring new field
workers where they don'tnecessarily work out and they
end up costing the businessmoney due to, uh, improper
workmanships or improperinstalls.
Um, you know you have, once youstart getting field, uh, the
fleet vehicles as well.
That comes hand in hand withthe crews.
Now you, you know you'reincreasing your overhead with
(31:59):
commercial insurance policies.
Um, you got to make sure thatthat driver's driver's license
is valid.
You know that.
You know their records clean,because then you know that opens
the door for more liability forthe company and more losses.
So it's definitely challenging,but but I think it's something
that's that a lot of businessesin the roofing industry lack
(32:20):
today and it's definitely needed.
I think that's what kind ofstands out when it comes to your
service to your customers.
You're not able to service acustomer the same just having
subcontractors Almost impossible.
(32:40):
I was fortunate enough that whenI came to the business, for the
most part we already hadin-house crews.
We just expanded, developed.
You know we increased our fleet, added new fleet, got rid of
the old fleet.
You know GPS trackers isanother thing.
It was at a point where youknow you got to pick up the
phone and call seven differentpeople to find out where they're
at.
So you know now from a screen.
You know our operationsdepartment.
Anybody for the most part intheir company can see.
(33:02):
You know where these guys areat all times, if they're on
their way to the job, if theyleft the job, so on and so forth
.
You know so little things likethat.
Also with Field Cruise, addingsoftwares was also very
challenging for them to manageand to report back to the office
(33:23):
effectively and efficiently.
Company Cam Job Nimbus.
You know there's a lot ofdifferent softwares and the more
softwares you add, the morechallenging it is for your field
crews.
But it's something that needsto be trained and had and it
definitely is beneficial forin-house crew management, for
sure.
Speaker 1 (33:41):
Yeah, definitely, and that's that it's.
It's just the additionaltraining and management you have
to take that on.
But I mean to what?
Like it does seem invaluable tome.
To me it's, you know, like itjust seems like that's the way
to go, especially into thefuture where you know W-2 is a
(34:02):
big thing in the industry now,going from 1099 to W-2.
If you have subcontractors thatdon't work for anyone else
which happens in this industryat times, there's a, you know
they may not be subcontractorsto the IRS, just so you know.
Speaker 2 (34:20):
Yes, that's true.
I mean you, you hear storiesand you see the way that people
operate and it's it's prettybizarre, it complicates things
more than anything in my opinion, and it doesn't really show a a
determination to your owncompany and and the value that
that you know you hold yourselfup to and you hold your company
up to.
Yeah, I just I don't understandit.
I you know you hold yourself upto and you hold your company up
(34:41):
to.
Yeah, I just I don't understandit.
I you know we'd like to dothings the right way and I mean
we're here to you know, to growthe business, to create
employment for others and tomake money.
Speaker 1 (34:56):
Yeah, you have a.
You came from a financebackground, no-transcript in
(35:24):
running the roofing business.
Some of the things that youtook from your experience in the
finance industry I mean, forthe most part, everything.
Speaker 2 (35:35):
I mean finance is embedded into every kind of
business, regardless of whatindustry or sector you're in.
So having that foundation andhaving that vision and
understanding the importance offinance within a business was
very beneficial to our growth.
Um, I've, you know, looking atthe way other companies are run
(36:05):
and the way, uh, the industry iscurrently with other
contractors, you come to a senseto understand that you know a
lot of these guys are theroofing guys, right, so, and
usually that's how you end up inthe industry.
Otherwise, you know, no saneperson ends up here.
But you know the roofing guys.
(36:28):
I think there's a.
You notice that there's a bigloss in the financial aspect of
it and how to run a company.
Lean, how to run a companyeffectively and efficiently and
how to, more importantly, invest, reinvest in your business,
which I see not too much of umanymore.
Also, uh, and you know, notnecessarily invest in your
equipment, invest in your people, invest in softwares, invest in
your company as a whole.
(36:49):
Um, that's what's going to makeit very successful, but you
know it's it's a bigcontributing factor.
Knowing and understandingfinancials um, knowing and
understanding financials,knowing and understanding you
know job profit, looking at aP&L for a job, understanding you
know where your cost is going,how you could cut costs moving
(37:11):
forward and increase yourprofits.
You know there's money lost.
You got to understand wherethat money ended up going to
make sure you guys don't.
You know the company doesn'tmake the same mistakes moving
forward.
The financial side of it is abig, complex side of it and I
think it's one of the mostimportant sides to it Because
without that you know you reallycan't.
(37:32):
You could have the bestinstallers on the field, the
best everything, but if you knowif your financials aren't
properly aligned, then you havea bigger problem.
Speaker 1 (37:40):
If your financials aren't properly aligned, then
you have a bigger problem.
So for someone that doesn't man, that maybe never read a P&L or
a balance sheet or a cash flowstatement or anything like that,
what are some of the key thingsthat you would look at to
determine the health of abusiness?
Let's maybe on a P&L, right Onthe overall P&L of a roofing
(38:04):
company.
If you, if I gave you a P&Lfrom a roofing company, what
would be the first couple ofthings that you would just kind
of glance over to see what wasin line or not in line?
Speaker 2 (38:15):
Um, I mean, I, I I looked through the whole
financial, through the whole P&L.
It's hard, you know, to justlook at one thing and and not
the other.
So you got to kind of look atfor me at least, and well for
most but you got to look at theeverything.
So you got to look at the P&L.
You got to look at balancesheet, um, income statements, uh
(38:37):
, you have to look at it all asa whole, make sure those balance
out.
You know the income statement.
Your P&L for the most partshould match.
But I I want to look ateverything.
So I want to know, you know,what we're spending and you go,
just go down the P&L.
It's not very that complicated.
You know P&Ls, balance sheets,income statements, Um, those are
(39:00):
the basic fundamentals offinance and it's very, it's not
really that difficult tounderstand and interpret.
What's more difficult, I feel,for most people is how to
realize you know what couldbetter within that P&L.
So just going down andunderstanding you know what your
cost of goods sold is and thencontinuing down the list.
(39:21):
If you see a vehicle on thereunder your fleet that may have
costed you $30,000 in repairsthat year, it might be a good
idea to get rid of that vehicleand replace it with a new
vehicle that's going to cost youless to maintain it less
headaches on the road.
You know it's going to cost youless to maintain it less
(39:42):
headaches on the road.
You're spending the same thatyou're going to spend on it and,
um, you also get a tax crediton that because obviously you're
buying a fleet vehicle.
So these are just things thatyou have to look at and
understand, and if you're notlooking at it.
Anybody could think, okay, well,I've had this truck, you know,
you know, for five years, youknow, and or for 10 years, and
it's the best truck I have.
(40:03):
And yeah, of course I've, youknow, replaced the engine on it
twice.
But replacing an engine onlycosts a thousand, two thousand
dollars and but when you dothese costs and you add them up
over the 10 years, you couldhave had two brand new vehicles.
Your guys would be happier,you'd have less worries, less
headaches, liability, and you'repaying less taxes.
So it's a win-win, but you gotto just look at it and
(40:25):
understand it.
So that's really what I lookfor and what I look at in P&Ls
it's really just making surethat the cost is there, making
sure we're still beingprofitable.
You know the cost is there,making sure we're still being
profitable, seeing where we cancut costs, finding out why
expenses went up this yearversus last year.
(40:46):
Also, doing a comparable, a P&Lcomparable this year versus
last year and see where you'reat and see how lean the
company's running.
You know if you're making lessprofit this year but your
expenses are more.
You know you got to find outwhat's going on and you know
where is it happening, where isit occurring.
Um, it may be something that youcan't control and then you'd
(41:07):
have a better idea as to.
You know, now we got to look atincreasing our um, increasing
the price that we're selling theprojects at, because we're not
cutting it here.
Um, if something that it couldbe controlled, finding out where
that you know that cost isincreasing, and finding out what
you know, what could be cutthere and what could be
controlled within that cost.
(41:27):
So those are just a few thingsthat you know, I look at, and I
think that everybody should belooking at.
You know on how to run the jobsyou then you want to.
You know, go down to your tojob costing and look at each
individual job and see what wentwrong, where materials were
overordered, underordered.
What happened to the materialswhen they were overordered?
(41:50):
You know little.
Things like that make a bigdifference in the company's
financial health, for sure.
Speaker 1 (41:57):
In that job costing?
It's just something that cameto my mind.
If materials were under orderednow that runner has to go out,
pick up materials, drive it tothe job site, do things like
that, are you making sure thatthat time is added into that job
costing?
Speaker 2 (42:19):
How much detail are you making sure is in that job
costing?
No, I mean, I would love forthat to be the case, uh, and in
a perfect world it would be.
But yeah, it's.
You know there's a lot there's.
There's certain things infinance that you have to realize
that it just has to beallocated to kind of like an
overall operating expense forthe business, otherwise you're
going to drive yourself crazy,um, and drive your team crazy as
well.
It's something that's very hardto record, but so that would be
(42:43):
just kind of an overheadexpense, if you will, for that
specific job and the materialwould also be allocated based on
the software that we had.
If you're using QuickBooks, youknow you're making a purchase
order from inventory or from thesupplier and that's, you know,
getting recorded and hittingthat job account.
But yeah, the runner's time andthe runner's cost and fuel for
(43:10):
the vehicle and so on and soforth is not really being
specifically associated withthat project.
Speaker 1 (43:14):
Yeah, what are you looking for?
What is a healthy range to youin gross profit, net profit on a
job or just in general acrossthe whole company?
Speaker 2 (43:28):
It depends.
Residential and commercial aredifferent profit margins.
Commercial is a much higherprofit margin.
New construction is a littlebit lower than commercial roof
replacement, and thenresidential or profit margin is
is a little bit lower than youknow, commercial roof
replacement and then, likeresidential, our profit margin
is probably a little bit lower.
But you have higher volumethere, right?
So it's a better cash flowsector of the business where you
(43:51):
have that.
You know, for those that don'tunderstand financials, it's just
, you know, you have that kindof revolving door of clients
making payments to the company,creating that cash flow.
Commercial side.
It's a little bit less of cashflow wise, but the profit
margins are a little bit bigger.
So it's a little bit complex.
(44:13):
It takes understanding thatResidential, nothing less than
20% is where we aim.
Um, you know, even thoughthat's, uh, that may be a little
bit on the lower end, we alwaysaim higher than that, but the
threshold would be the minimumbottom baseline would be a 20%
and 20% would be a net.
(44:33):
So you're looking at a littlebit more than that.
When I say 20%, we'll run ournumbers hard and then, uh, we'll
do the profit margin based offnet, net, yeah, so so it's not
terrible.
Um, sometimes we got to compete, but we know where we need to
be.
On res, on commercial, um,you're, you're upwards 30, 34,
40, at times, net as well.
Speaker 1 (44:57):
Um, it's just because yeah, you have more, more
outlay, more for more time,right, usually you're it's kind
of you're there's some risk inthe the length of time that you
have your.
You know you have to pay yoursubs or your payroll and your
materials and you know you havethere's things that you have to
pay along the way.
I think that, and I feel likethat's a consideration that some
people don't make, in that,like that, yes, it may have this
(45:19):
, but you have it's like yourmoney's invested for a longer
period of time right, yeah,you're fine.
Speaker 2 (45:25):
In other words, you're basically financing it
for that zero interest.
Yeah.
So you definitely have toaccount for that.
You have to account for theexposure and the liability.
And then you know everythingelse the equipment.
There's usually more equipmentinvolved.
There's more logistics, there'smore managing involved.
There's everything's moreinvolved.
Speaker 1 (45:44):
You know insurance requirements, things of that
nature, so you got to associatethat to those projects.
What are some of the lessonsyou've learned about running
lean, like?
What are some of the some ofthe things that you've been able
to change along the through theyears?
Speaker 2 (46:02):
like to to help to run lean through the years to
help to run lean.
That's tough.
I got to think hard on that onebecause we're always I can't
really remember, and I'll thinkabout it a specific big item,
but for the most part it's justcontinuous budgeting and looking
(46:26):
at your books and looking whatdid we spend last year, what we
expected to spend this year,where can we cut on that?
Speaker 1 (46:32):
we don't necessarily see as a necessary expense, so
the constant eyes on it is whathelps you to do that.
It's not a specific thing likeoh, we cut this out of the
budget and that helped increaseprofitability.
It's just this.
It's the intent, intentionalitythat you have with your, with
(46:53):
your, with your finance on anongoing basis.
You're very you're keeping youreye on the ball the whole time
Correct.
Speaker 2 (47:00):
Correct A hundred percent.
And that goes with.
You know that goes witheverything because when you cut
costs here you could, you couldincrease costs over here, you
know.
So let's cut costs necessarilywhere we don't need it and put
it towards a new salary for anemployee, that where we could
add value to the business.
That goes from anything assimple as you know.
The office cleaning, is itnecessary?
(47:21):
You know, can we get somebodyelse to do the office cleaning?
Do we need it?
Equipment for the office paper,toilet paper, you know every
little thing kind of needs to betaken into account because you
add those things up and you knowobviously pennies add to
dollars.
So you know software iseverything.
(47:41):
Vehicle maintenance, vehiclecost is a big uh, because a lot
of money goes, goes there.
Uh, equipment costs, you knowif you're spending.
You know x amount here.
You know this year, if you knowyou're you increase on on nail
guns and equipment, you know 30,40 percent.
You know you got to figure outwhat's going on there.
Maybe you got to get adifferent mechanic for your
(48:03):
tools.
Maybe you know they're goingmissing somewhere somehow.
Maybe you got to track thembetter.
Something needs to be done.
So it's not necessarily cuttingcosts all the time, um, but you
know, identifying where the youknow issues may be occurring
related to cost, that could beaddressed.
Something similar to that,ladders, is another one.
(48:23):
You know, ladders are expensiveand they get lost way too
frequently and way too often.
Um, yeah, so, yeah, exactly so.
Learning how to track thosethings and and keep
accountability for them and keepothers accountable for them
obviously helped you save in thelong term you had mentioned
(48:43):
reinvestment and I think this isa big thing for people to think
about.
Speaker 1 (48:46):
I think a lot of people take money out of their
businesses too soon.
I think that they don't reallyproject what type of
reinvestment they'll need to getto their new goals.
I think there's a lot of timesthere's a gap there.
It's just like they just set anew goal and don't think about
(49:09):
what it's going to take to getthere from an investment.
You know, like there's aninvestment, there's an
investment in marketing, there'san investment in team, there's
an investment in equipment.
Like I think that a lot of it'snot focused on again and it's
probably just your focus on it.
But not focused on again andit's probably just your focus on
it.
But how can, how should someonethink about the reinvestment in
their business to continue togrow and build and become a more
(49:32):
stable and successful company?
Speaker 2 (49:36):
Um, I mean, you obviously have to identify a
roadmap for the business andunderstand that and uh, and put
into the fundamentals as to howthat's going to enhance the
business, because it's notnecessarily a case where, you
know, adding the vision oradding the apartment is not
really going to contribute tothe long-term success or growth
of that business.
(49:57):
Maybe not at that given time ormaybe not at all.
So just because you know and Iadvise a lot of people not to
look at other businesses and theway other businesses are
running things, because if youdo it your way and you do it
through trial and error, and youfigure out the right way and
the correct way and you do itthe financial way as well, that
a lot of people aren't doing itYou'll come to the realization
(50:17):
that you might be doing thingscompletely different but much
better than companies that havebeen around for much longer.
So just focus on yourself andreinvest in things that you need
that become issues or createmore expenses and increase costs
(50:39):
for you.
At the time, I gave the exampleof a fleet vehicle.
I think that's definitely agreat investment.
Um, you know, uh, ladders isanother one.
Uh, damaged ladders, get rid ofthem.
Buy new ladders because one ofyour guys falling on that ladder
is going to cost you a lot moremoney than a brand new ladder
(50:59):
is.
So you know realizing what yourexposures and liabilities are,
because that is, you know, a bigpart of it.
And again it goes to trial anderror.
You know when nobody everthinks of those things until you
get that guy that unfortunatelyfalls from the ladder and then
you you understand what a costis associated to that.
You know and you also want tomake sure that you give your
(51:23):
guys a safe working environment.
You know and you also want tomake sure that you give your
guys a safe working environment.
So those kinds of thingscontribute to the success of the
business and it's definitelyvery important to reinvest in
them.
Pay yourself a salary.
Focus on the business.
Your salary will increase overtime, don't you know?
(51:43):
Take the net profits as yoursalary but?
Speaker 1 (51:48):
but, zach, there's a nice, there's a nice boat, slip
down and down there, not too farfrom you.
You got to fill it withsomething.
You got to get that you got toget well, yeah, I mean there's
other things, that you spend themoney you could get a nice high
rise down there and brickle orsomething like you know.
Like thinking of Miami and theFlorida market.
(52:13):
The Florida market is, you know, is very challenging with all
the all of the insurance lawchanges, all of the lot, you
know, legislative changes thathave been happening through the
years.
How are you looking atnavigating all of the challenges
, not only from the Floridastate laws, but just the changes
(52:33):
and challenges facing theroofing industry?
How are you thinking about thatand what are you doing to make
sure that Z roofing andwaterproofing is around long
term?
Speaker 2 (52:46):
to make sure that Z roofing and waterproofing is
around long term.
Just adjusting, man, and youknow it obviously has to do with
you know it ties back intofinancials.
Certain laws don't haveanything to do with financials,
but we adjust to them and we dowhatever we need to do.
If it's anything to do withlegality, we have our legal team
that handles that and puts inwhatever we need to be.
If it's anything to do withlegality, we have um, we have
(53:06):
our legal um you know team thatthat handles that and puts in
whatever we need to be put intothe contract.
Um, staying on top of those,those new laws and those new
changes, so you could adjust intime and it's not late, too late
, um.
And then, uh, one of the thingsthat kind of continuously
changes in our market and justchanged again, is the building
(53:26):
code, the Florida building code,and it's just understanding and
adapting to that change andfinding out, okay, there's a new
building code change.
It requires different stringentmethods of installation, some
for the better, some for theworse.
But you got to see now what,what is approved, what can we
install and what is the costassociated to it, because you
(53:49):
know this is what we're what ourjob costing was running at over
here with this um, with thisroofing system.
Now, what is this going to costus?
And now you know there's seven,several different options
available, differentmanufacturers, different
products, different methods ofinstallation.
So we sat down and we kind ofran the numbers hard.
(54:09):
So you know what is this systemgoing to cost us compared to
this system, compared to thissystem, compared to this system,
compared to this system, andwhat are the requirements for
all of the installations.
So this system requires, youknow, three rows of nails and
cap, six inches on center.
This one requires two rows, 12inches on center.
So we do the math with the, youknow, and then this row might
(54:33):
cover 10 squares, this one mightcover two squares, right, so
it's all cost based and it'sjust running those numbers and
figuring out the hard numbersand coming down to the penny
with the system itself and where, where our target point is
going to be.
Where am I going to direct mysales guys?
How are they going to sell theproduct, what are we going to
pitch to clients and what numberis it going to be sold at?
Speaker 1 (54:56):
Yeah.
Speaker 2 (54:57):
So a lot of people, you know, with quick changes
like this in the market don'tadjust in time and they just
continue doing the same thingthey were doing Same price and
different system, differentprices, different product itself
.
So they might not necessarilybe making as much profit as they
think they're making andespecially if they're not
looking at their job costing,it's going to be too late for
(55:18):
them to figure that out,unfortunately.
Speaker 1 (55:21):
Don't make it too late for you Know your numbers.
It's the most important part ofbusiness.
Don't make it too late for you.
Focus on your know.
Your numbers is you know.
It's it's an the most importantpart of business.
Zach, I appreciate your timetoday, man.
This has been another episodeof the Roofing Success Podcast.
Thank you for tuning into theRoofing Success Podcast.
For more valuable content,visit roofingsuccesspodcastcom
(55:43):
While there, check out oursponsors for exclusive offers,
shop for merchandise and sign upfor our newsletter for industry
updates and tips.
Also join the Roofing SuccessFacebook group to connect with
other professionals and stayupdated on the latest trends.
If you enjoyed this episode,please subscribe, like, share
and leave a comment.
(56:03):
Your support helps us continueto bring you top industry
insights.
The website link is in thedescription.
Thanks for listening you.
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!