Top 7 Numbers Roofing Business Owners Have to Know
Attend our online Roofing business school or class near you:
Numbers to track:
1. Closing rate
What percentage of sales are you closing on? 20%? 30%? 40%? You have to know this answer, and how much you’re spending on each appointment.
2. Customer acquisition cost
Similar to #1 above, how much are you spending to land a new customer? To determine this, you have to divide your marketing costs by the number of jobs you do per year (i.e. $100,000 annual marketing budget divided by 100 jobs per year equals a closing rate of 50%). $100,000 budget divided by 100 jobs = 1,000. Now 1,000 divided by your 50% closing rate = $2,000. That’s your cost of acquisition! Run your own numbers through this cycle and determine if the result is healthy for your business.
3. Your average job
Dmitry refers to this as the “average ticket,” or how much a typical job will cost. You need to know this number as it relates to your cost per acquisition so you can plug it into many different metrics. This number is crucial to know for if you ever want to sell your business. Investors NEED to know this number, and you do too!
4. Profit margin
Gross and profit. There is a marked difference between the two. Your gross should be between 30-50% of a job, and then your net can be determined once you calculate your overhead. This leads to point #5.
This is anything that costs your business money, like your phone bill, salaried employees, gas for your truck, etc. Spread these expenses out over every job so you can determine your net gains.
6. Breaking point
How much money do you have to make each month to break even? This is important to know because not every month will be profitable. If you can determine your breaking point, then you can also determine how much money you need to make each fiscal year.
7. Marketing budget
You have to put money into marketing, or else your business will eventually fall behind or crumble. Pick a number that is good for your budget. Dmitry recommends 5% of gross sales be funneled back into the marketing budget.
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