Roofing Business Model Storm Chasing vs Residential Retail

Let’s first look at how storm chasing companies operate.

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1. War Room Mentality

Companies who believe in war room-type climates typically are more interested in sales than building a customer base. Think Leonardo DiCaprio’s character in Wolf of Wall Street. In that movie, DiCaprio’s character tries to sell as many stocks as he can. This is exactly how contractors who are more into storm chasing generate business, by trying to secure as many contracts as possible. This model has the potential to yield higher gains because you’re generally on the road more.

2. Independent Reps

If you have a storm chasing-type of company, you’ll likely hire independent reps to find leads. For example: Denver just got a huge snowstorm, so you then hire reps in that city to find customers and you bring your team out to do the job. This method is good if you’re willing to travel and perhaps pay a little extra to the independent reps in different cities.

3. Minimum Investment

Another positive to storm chasing outfits is they don’t need to invest much money into advertising. A simple company logo splashed onto your truck and a few professional folders will be sufficient.

4. Tenuous Work Climate

Most work done by storm chasers happens in seasonal fashion, meaning they only visit parts of the country at certain times of the year. For example: a storm chaser wouldn’t come to Minnesota in the winter because no roofing work will be done at that time of year, so they’ll likely head south, to a state like Florida. As a result, income can be inconsistent.

5. Always On-Call

Say a big storm just touched down in Dallas and houses were affected. A good storm chaser will then head to Dallas to find work. Seems like a good mode of business, right? Yes, but what if you have a family in Minnesota? They might not want you to jet off somewhere new. Storm chasing all depends on the life you want to live.

Now let’s take a peek at the ways residential retail companies conduct operations.

1. Managers Meeting

Instead of having a war room, residential companies typically have weekly meetings where they assess everything from income to the broken coffee machine. It’s a more family-friendly environment where consistency is the goal among owner and staff members. In this setting, employees are usually designated and assigned certain tasks.

2. Employees

Instead of hiring independent reps or subcontractors, residential businesses usually have a staff of people who handle different aspects of the business. Most residential companies have their own sales teams and better understand the overall objective of the company.

3. 5% Minimum Investment

Residential businesses funnel revenue back into the company’s advertising, which is typically about 5% of the income. This allows them to continue branding, where instead of trying to make a splash in the market, they opt for consistent and continued growth, the focus more on solidifying a reputation within their community.

4. Market Never Stops

As a residential company, you’re always inundated with phone calls from subs or prospective clients because of your status in the area. The downside to being residential comes when business is slow. Unlike a storm chaser, you’re unable to pick up and leave to go find work. This means the focus is on consistency at the craft, finding an equilibrium that allows the company to slowly build. Dmitry recommends striving for three years of steady growth (around 20-30% a year) before forecasting your company’s projected revenue.

5. Localized Customer Base

Similar to #4 above, the goal is to become respected in the community and building a brand people know and can rely upon. Dmitry encourages companies adopting this methodology to strive for consistency. For example: if you run your business in this manner, you should focus on making $250,000 consistently each year, as opposed to trying to max out and make $800,000 in one calendar year.

There is no right or wrong way to run your business. It simply depends on the lifestyle you want to live.

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