# That's the problem with this whole industry! ( a conversation by text)



## J F (Dec 3, 2005)

Grumpy said:


> Roofing is a trade where you literally start on the bottom (cleaning garbage) then literally climb the ladder up, but then climb the ladder back down. The way I look at it, *the real money is to be made in the office*.












This is true even for the 1-man operation.


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## Stephen H (Feb 18, 2011)

Grumpy said:


> Roofing is a trade where you literally start on the bottom (cleaning garbage) then literally climb the ladder up, but then climb the ladder back down. The way I look at it, the real money is to be made in the office. I know of commercial roofing sales reps who earn more than most residential roofing business owners. You need not necessarily be an owner but there is less earning potential in the roofing trade up on the roof. $40 an hour is the max you could ever expect to earn as a foreman working for a company with a generous employer. Unless you go union, but look at most of the union guys sitting home with even less employment than the residential guys. And even there you have a limit on what you can earn.
> 
> 
> I'll tell you right now, where I am from, I would consider $50k a year minimum wage not median pay. A 2.5 bedroom house will cost you no less than $200k, in a working class neighborhood. Gonna be hard to pay a mortgage on $50k a yar, unless it's a 50 year mortgage... and then let's face it you're just renting from a bank.



yes grumpy- but that's where YOU are-and chicago is probably a pretty high cost area- but HERE you can get a perfectly presentable 3 bedroom one bath cape in a working class,safe neighborhood for HALF that-and rarely drive more than 10-15 minutes to work--------and what's wrong with a working class neighborhood- that's what roofers ARE!-working class
here a young couple watching their expenses- both earning $30,000- could own their own home and put their kids in private schools and live in a safe neighborhood--- not saying it would be easy- but when was earning a living EVER easy ?


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## bender_dundat (Feb 20, 2011)

Great, another "lowballer" thread.

I suspect there was a lot more lowballing going on 10 years ago than people remember. It's just there was a lot more work available 10 years ago so it was easier to stick to your price and move on when the low baller won.

Consider the market transition from 10 years ago. I'll bet at least 50% of the roofs going on 10 years ago were new construction. That market is essentially ZERO now. I'll bet insurance jobs other than major catastrophe and big hail storms was next to nothing 10 years ago. Now that may be 50% of the residential replacement industry. So do the math. Assuming these numbers are anywhere close to being true, the cash bid residential roofing market is approximately 1/2 what it was 10 years ago. With the poor economy and people having less disposable income, likely less than that. At the same time, you have all those roofers who were doing new construction fighting for that smaller piece of the pie. You got all the new entries, such as my company and many others, who have entered the market. Very simply the most fundamental of economic principles. Supply Up ---> Demand Way Down ---> Prices Way Down

The fact remains however that people who are excellent in what they do, particularly those with well developed positive reputations, can still demand a premium price. Perhaps not as premium as they could 10 years ago, but they still can make a good living. Considering the economy, the massive amount of people unemployed or underemployed, that is something to be very happy about I think.

What is baffling and frustrating is to hear this story where a guy bid 30% less on a job. Even the least amount of salesmanship should allow the guy to have sold that job at $7500 to $7900. He left 15% to 20% profit on the table if not more.

BamBam and several others make valid points about not thinking ahead, charging enough so one can sustain their business over the long haul. The problem is simple though I think. The same mentality you have that makes you convinced you deserve to get paid a fair price if not a premium (which you are able to consistently do) cannot comprehend the mentality of simply surviving day to day hoping things will turn out okay. That survivor doesn't have a clue and cannot comprehend the concept of developing a great reputation by doing the highest quality work no more than BamBam can comprehend cutting corners and surviving one paycheck to the next. It's as difficult a US citizen understanding a Terrorist Muslim walking into a crowded restaurant and blowing themselves up so they can go to Allah with 50 virgins waiting on them.


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## katoman (Apr 26, 2009)

While I may not be in roofing, the same rules apply. Here's the reality.

Let's say I pay a man 25/hr. (which is the "going rate" in my neck of the woods) multiply that by 1.4 to cover burden. Now we have 35/hr.

Add let's say 30% P&O. That brings it to $45.50/hr to the HO. I can barely get that. People freak out at that price.

Now, I have a good friend who is a union carpenter. His rate included benefit package is $47.00/hr. Add in the burden and P&O and it is $85.50/hr.

There is ABSOLUTELY no way to sell this in the residential market.

I wish I could, but it is not going to happen.

So, the union guy is making a good wage as he should, but the non-union guy is not. Just the way it is, and I can't change what people will pay for work.


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## Grumpy (Oct 8, 2003)

katoman said:


> While I may not be in roofing, the same rules apply. Here's the reality.
> 
> Let's say I pay a man 25/hr. (which is the "going rate" in my neck of the woods) multiply that by 1.4 to cover burden. Now we have 35/hr.
> 
> ...


That's the point, because too many people are too stupid and should not be running a business. 


And i disagree that there is NO way, just try it and see. Even if you were to charge $35 an hour for your service people will freak out. it's a reflex of the buyer seller dance. Buyers are trained to have sticker shock, be it real or fake in an effort to get a lower price.


You CAN get what you need to do the work and if you are not please please please close your business and go work for someone else. You are only hurting yourself and hurting your industry.


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## Grumpy (Oct 8, 2003)

Alot of "I can't" attitudes in this thread.

I have trained my kids that "I can't" is a bad word. You can do anything if you practice try and persevere. 

SO why "can't" you charge more? Are you properly advertising to the RIGHT target market? Are you meeting your customers? Are you explaining the value your company offers? Are you explaining to the customer their benefit to paying a little more upfront? Do youhave THE MOST professional proposal of anyone in your trade in your area? Are you neat, clean, and organized? Do you show the customers pictures of the work you are doing? Are you explaining to the customers the varying quality of material and the reason why you have chosen to partner with xyz manufacturing company? Are you in general doing the same thing as everyone else or making an effort to stand out amongst the crowd? 


Recently I have been talking to sewer companies because I have a sewer back up issue. I have taken this opportunity to not only find the right sewer company to fix my problem, but to learn what to do from the salesmen and learn what not to do from the average joe contractor. I have seen prices from $10-$3k. The $3k guy looked like he just climbed out of a sewer. I didn't even want to let him in my house, and to be honest he didn't even come into my house and look at anything. If he could give me a price just by looking at the outside of my house, why didn't he just do it over the phone and save his gas? His truck was leaking and stunk bad like burning antifreeze. I bet he is wondering why he can't charge more, why his customers aren't willing to pay more. The company charging $10k, I see their signs all over town. I see their trucks all over town. *They are obviously able to get what they are asking.* 

The point of this thread is perfectly evident in the paragraph above. Why isn't the guy charging $3k, who in my opinion is GIVING AWAY his expertise, charging $9kfor the job? Maybe he doesn't need to charge $9k, but certainly that's not a reason to do it at cost! He is his own worst enemy thinking he can't get more because of all the other companies he was 33% the average price. *He can't charge more because he has trained himself into thinking he can't charge more.* This is a cycle that no doubt perpetuates its self. He will be able to charge more only once he convinces himself that he can charge more.

Stop thinking you can't charge more, because unless you are the highest guy in your trade in your area, guess what, there ARE guys already charging more and getting it. *You CAN charge more. *

Stop making excuses. "I can't do that in my area." "I can't charge more because the customers won't pay more." "Grumpy your area is different than my area." Well you are right, if a house in your area costs $60k for a 3 bedroom you don't need to pay that worker $40 an hour. You're right. And you are right if your workers comp isn't 42% you probably don't need to mark up 69% to cover burdens... *but then you are getting lost in the details of this thread and not wraping your mind around the overall theme. *

If you are not making enough to cover ends meat, what ever the defniintion of ends meat means to you, without working 80 hour weeks, you are probably not charging enough. If you are complaining because all you can find to work for what you are willing to pay using the excuse that t's the going rate, and all you are getting is illegals and criminals applying for the job... well you are probably not charging enough. If you have to cheat your taxes and cheat your insurance so that you can offer a low price to make a sale you are definetly too cheap and should either close your business or go take a sales training course and learn how to charge more.



You know what, you are right.. You CAN'T Charge more, IF you THINK you can't... but if you *think you can*, you probably can. It's like Thomas the choo choo train... I think I can, I think I can. God I can't beelive I am making toddler analogies to grown adults. it's pretty obvious I have two young kids.


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