Building your future

Careful planning can help you satisfy your financial and retirement needs

Every day, another report proves retirement and savings accounts are not priorities for many people. In fact, roofing contractors often are unaware of the missing elements—discipline, sacrifice, consistent planning—in their retirement and savings programs because they think the future sales of their businesses will be enough to satisfy their retirement needs. But planning for the future involves much more than most people realize. Following are some tips to consider when selecting a retirement plan, particularly if you have a small or new roofing company.

Using skills

Currently, roofing contractors typically fall into two categories: those who come from family-owned businesses and those who work their way up through the ranks to start their own businesses. Family-owned businesses usually are larger with $10 million or more in annual sales and 100 or more employees. They also are more sophisticated in their approach to financial management and retirement planning for their companies. Some of this may be because younger family members who have been raised in the roofing business often have more formal education and contribute their knowledge to the family enterprise. Equipped with business or law degrees, these family members recognize the need to develop a business plan that addresses organizational structure, marketing, financing, historical analysis and financial projections.

On the other hand, smaller firms (those with annual sales of less than $10 million and 10 to 20 employees) appear to most need financial counseling and business-management skills. Because most roofing workers acquire their skills informally by working for more experienced roofing contractors, it can take several years before roofing workers reach the point of starting their own businesses. With the bulk of energy and time initially spent learning the trade, a new business owner's focus immediately must shift to obtaining work to pay crew members and support a family. This time period is the low entry point for money; with virtually no support from banks, many roofing contractors are forced to draw on home equity loans or use credit cards to buy supplies and equipment. But business-management skills usually are acquired by trial and error; the rule becomes "learn from mistakes, and try not to make them again."

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