Becoming a successful contractor is a difficult endeavor
Whether you’re a roofer, plumber, or HVAC installer, the road to building and sustaining a profitable business is filled with numerous trials and tribulations.
In many cases, it can be 5-7 years before most contractors reach a point where their business is self-sustainable, and even then, they are still forced to deal with a litany of issues that could derail their business.
To better understand the path to success for a contractor, Roofing Insights CEO Dmitry Lipinskiy created a timeline that documents different benchmarks that contractors can expect to encounter.
Keep reading to learn more about the five stages of a contractor’s journey!
1. Honeymoon: 0-1 years
When you’re first starting out as a contractor, everything is fast and exciting, and it is easy to think that these feelings will last forever.
Additionally, it is common for many people to want to support new businesses, so you can expect that a lot of your friends and family will do what they can to help your business grow.
“Your first checks will be easy because your friends, relatives, and even your first customers are going to try to support you,”
says Lipinskiy, who owned Storm Group Roofing in the Twin Cities for the last seven years before selling his company in 2021.
“Your first year in business you are also going to get a lot of support that you don’t deserve,”
Lipinskiy then says, before adding a word of caution to new contractors.
“People cherish new businesses, and that contributes to this honeymoon feeling. But it’s not going to last long so be careful.”
2. Testing: 1-2 years
After your first year in business, things then become more complicated.
At this stage, contractors typically experience worker’s comp audits, potential fines from OSHA, an influx of customer complaints, and many times employees will quit working for you.
“The first year was easy but now in the second year you have those tests come in, and a lot of guys get stressed and frustrated. They can’t pass the test because everything is getting thrown at them,”
Yet, if contractors can handle the stresses that come after the honeymoon phase, they then will enter the most crucial stage of developing their business.
3. Growing pains: 2-5 years
Once contractors survive the major tests thrown at them, they then have to manage scaling their business and bringing on more employees to help manage the increased workload.
At this juncture, many contractors are learning how to better manage their money so that the business doesn’t implode.
Unfortunately, this is also where many contractors flame out.
Lipinskiy says in his experience, only 20% of contractors will make it to year three before failing and having to declare bankruptcy.
Among other things, contractors who are still operating at this stage also face a lot of misconceptions regarding their company.
“You have made it to the mid-level of contractors. Now homeowners are thinking that you are making money because you have been in business for a couple years. Your employees think that you have money. You probably will have some assets, trucks, and a nicer warehouse,”
Lipinskiy says, at the same time warning contractors not to overspend because then they risk falling behind on bills if an unexpected expense occurs.
In addition to the financial component of scaling and managing surprise bills, many contractors also find that their business requires a lot of their attention.
“Work-life balance does not exist,”
Lipinskiy says of the growing pains stage.
“You give it all to your business and you are not happy anymore.”
Contractors, take note: only 5% of you will make it past this stage.
4. Pilot: 5-7 years
At this point, it’s fair to wonder if owning a contracting business is even worth all the agony and stress.
Fortunately, if a contractor has made it this far in their journey, then things will get progressively easier because by this point contractors have usually hired a stellar management team and have the systems in place to ensure their business is self-sustainable.
“If you make it this far, it means you finally found good people on your executive team. You also have good managers. You have built your process and your business runs itself without you being involved,”
“You no longer have to work in the business. You work on the business.”
Contractors at this level usually are less involved in the day-to-day operations of their business and only intervene if there is a major issue that needs to be addressed.
This gives them time to focus on other ventures.
For example, once Storm Group Roofing became self-sustainable, Lipinskiy then transitioned into working on Roofing Insights, a media company that now boasts over 41,000 subscribers on YouTube.
If a contractor has made it this far, they have done a great job, and it is why they will soon become a leader in their community.
Keep reading to learn about the benefits that come with being a leader in the contracting world!
5. Leader: 7-10 years
While contractors who have been in business this long could ride the wave of their business and potentially retire early, many who have made it this far have a desire to accomplish more in their respective careers.
This may include teaching or getting involved in public speaking.
For Lipinskiy, he decided to give back to the roofing community by starting the Roofing Business School, a platform that is designed to help roofing contractors of all sizes continue to improve their businesses.
He also founded the Roofing Process Conference, an annual event that brings contractors from all across North America together to learn from industry experts and network with brands that can bring value to their businesses.
And in 2021, the Roofing Process Conference is giving successful contractors the opportunity to give back by allowing them to speak at the conference.
If you’re a contractor who would like to share your story and help others, apply today by sending your title, topic, presentation, and examples of past keynotes to: firstname.lastname@example.org
In September, Lipinskiy and his team will choose their selections and an announcement will be made.
Thank you for reading this article and don’t forget to subscribe to Roofing Insights on all of their social media platforms so you never miss any of their upcoming content!