Many of the same challenges that marked 2022 remain concerns as roofing and exteriors companies—labor, supply chain and inflation, not to mention a potential economic slowdown. But industry leaders say a new crop of challenges are coming this year that might take companies by surprise if they don’t take proper steps.
Here’s a look at five ways industry leaders say contractors should change their business practices in 2023 along with the specific strategies needed to do so:
1. Strengthen systems and processes
Work has slowed a bit from the breakneck pace of the past several years, so now is a great time to complete an audit of systems and processes to ensure they’re up to the demands of yourbcustomers and workers.
For Josh Steinberger, president of NextGen Restoration, that means looking at what’s working and finding ways to make it work even better. “It is easier to chop down a tree with a freshly sharpened ax than it is with a dull, blurry edged one,” said Steinberger, whose firm was named one of ConstructioNext’s Roofing & Exteriors Power Players.
Steinberger said he’s “laser focused on what we want,” and he’s going into the marketplace to search for third-party solutions. “Then, as other companies contract in this uncertain economy, we will be full speed ahead.”
Systems and processes also are the focus at Rackley Roofing, another 2022 Roofing & Exteriors Power Player.
“Our company works off of EOS (entrepreneurial operating system), so we focused (in) 2022 on documenting all of our core processes,” said Michelle Boykin, Rackley’s chief operating officer. “We will spend 2023 ensuring we are following and updating those processes as needed so we are working efficiently and effectively.”
2. Focus on collections
With an economic slowdown contracting the market and backlogs shrinking, there’s been an uptick in lien claims resulting from customers not paying for their jobs, according to Trent Cotney, partner and construction team leader of Adams and Reese LLP, who tracks those stats. “That is the canary in the coal mine,” he said.
As such, Cotney said it’s wise to shore up the collections process—and even devote sales staff to ensuring that customers are paying promptly. For example, companies can use the same customer-relationship-management-generated drip campaigns to coax payments as they do to generate business.
Along with using CRMs to communicate with customers about payments, Cotney said companies should use those systems to track what type of communication works best.
“You can use sales communications for collections,” he said. “Develop a standard operating procedure that uses different forms of communication, such as email drip campaigns. Just do whatever you can to get those dollars in the door.”
3. Invest in staff while creatively finding new workers
The labor crunch remains a key concern in the new year, and savvy firms are hitting it from both sides.
“Shortage in labor is still a struggle, and we are investing heavily in crew development to maintain our business in a healthy path moving forward,” said Tupac de la Cruz, operations manager for Roofing Solutions, a 2022 Roofing & Exteriors Power Player. “For 2023, we are investing in talent and workforce development. That is our No. 1 focus.”
De la Cruz said his company will be holding leadership training for foremen and up. For general crew development, there will be hands-on, manufacturers's and safety training.
On the other side of the labor crunch coin, Rackley Roofing is taking a new tack in recruiting workers.
“With what feels like a shortage of workers in Tennessee (and the country), we have decided to hire a full-time recruiter to ensure we always have a bench of people to hire,” Boykin said. “This will allow us to continue to hire toward our core values without having to feel the ‘panic’ of hiring anyone who walks in the door.”
4. Diversify your portfolio of work
With twin economic concerns about inflation and a slowdown, now is the time for roofing and exteriors firms to take a hard look at the services they offer and make sure that there’s enough variety to withstand the headwinds.
A sure bet is branching into maintenance and service or expanding that aspect of the business, Cotney said. “Two guys in a truck will make you more money than a 10-person crew sometimes,” he said.
At the same time, service and repair will remain in demand. “It’s high-margin work that will always exist regardless of a downturn,” Cotney said.
5. Vet potential customers
As the economy cools, it’s imperative that construction companies take steps to protect themselves from the fallout. That means making sure customers cwill pay when the job is done.
Cotney said too many firms are only focused on sales without doing basic background research on who they’re selling to. “It’s the customers you don’t take that make you successful,” he said.
As a basic precaution, he suggested checking property and county records to determine whether homeowners have any liens against their homes or if they’ve been sued. He added it’s easy to do such research.
“You can learn anything and everything about anyone now. All you have to do is a Google search,” he said. “Fact is, there are certain types of customers that are higher risk than others. So, understand your risk on the front end, and don’t be hoodwinked by salespeople who are just focused on getting business in the door.”
Along with proper vetting, Cotney recommended that companies require a deposit from customers before starting work. “If they’re not willing to pay a deposit, what makes you think they’ll pay when you’re done?” he asked.