Do roofing contractors make good money?
After 41 years of advising contractors and several roofers, I believe I can talk to an authority about the profitability of roofers. In fact, more than a third of the roofers we have reserved make a profit of over 500,000 per year. By the way, when they started with us, many of these contractors had a turnover of less than 500,000 and a profit of 50,000. They are all local family businesses that we have worked with consistently and that have helped develop long-term business goals.
I can’t speak for commercial purposes, but with residential roofs, you should be able to earn an average gross profit of 30 to 35% (profit defined as the difference between the total amount of the job minus labor and materials) fairly easily. A well-managed company that has adequate quality control and cost control should pay 35 to 40%. A top company should generate a gross profit of 40 to 45%. There are a few that actually do it a bit better.
When the general contractor (GC) wants the roof on a structure, the pressure is on to do so as it is part of the critical path. Worker compensation insurance is the most important type of coverage that a roofer should have. Roofers fail for a variety of reasons. The most common reason is that they don’t understand their numbers and don’t keep track of their spending. Closing down contractors and contractors who respond quickly to calls will come out ahead in any situation.