Helping a Roofing Company Scale from $1.8M to $70M

0:00Unternehmer/Gast My name is Tyler. I sell roofs to residential homeowners or commercial building owners. Um, we're about 10 months old, did 1.8 million in revenue this year. Uh, yeah, somewhat. A lot of the guys like I've been in the industry for a while, so I had a lot of return customers. Did about 1.1 from return. And then my four sales guys brought the rest of the business. Um, short-term goal would be 8 million. Greater than and then long-term would be around 70 and exit.

0:26>> Uh-huh. >> Um, the problem is we don't know what model to choose or how to do it. So like was it franchising? >> Yeah. Are you going to go all insurance and storm chase or are you going to do private [snorts] like cash pay like new >> We haven't done any storm chasing. >> So it's all new roofs. And repair? >> Uh, so it's so it's the market that we live in is is we get storms every year. So um, yeah. >> But it's insurance. >> 95% is insurance. >> Okay, it's insurance. Got it. Okay.

0:51Alex >> Yeah, so what I guess my question is like how would you scale or what model would you choose and then how would you go about building that? >> Well, you already have 95% insurance. So I would probably keep doing that. >> Mhm. >> So what stops you from doing that? >> Well, we're going to stay with insurance. Well, insurance is changing a little bit. Deductibles are growing up. Homeowners don't want to get their roofs done as often. But would you scale to multiple locations like different cities or would you do like a franchise model?

1:17Alex >> Mhm. Do you feel like you've nailed the model? >> No. >> I would So right now what I what I wouldn't want to do is try and make a decision with incomplete information when it when it when it could be knowable. And so I think once you nail the model, then the path will become really clear. And so if you nail the model and then the returns on capital are really like interesting and you can be more patient than owning them all privately becomes more interesting. If it costs a ton of capital to open up um and let's say it requires a lot of like oversight, then sometimes a franchise model can be good. But fundamentally I I of see franchises as like being impatient.

1:58Just being honest. Uh because like all of basically it's the most expensive form of capital. Is you say, "Hey, uh we're going to partner and you're going to take you're going to put all the money in and I'm only I'm going to become a you know, maybe you get a 8% of top line, so maybe figuratively it's like 25% partner or 30% partner of the location, which is okay. I'm not like nothing wrong with that, but I have seen such a graveyard of you know, 20 location franchises that make no money.

2:25And the amount of work that it takes to maintain 20 is about the same amount of work as it takes to maintain 20 where you own them all. It just happens faster. But you make way less money. >> Yeah. >> So, I am I have a habit of flipping franchises back into let's own them all. Like the teeth whitening chain that we bought. Uh when we bought it we had 14 uh corporate stores. We had 18 open franchises. And so then over the last 12 months we bought out all 18 franchises and so now we own all 32, but then like all of the administrative headache is just basically disappeared cuz we just run them the way we want to run them and we make more money.

2:59Alex >> Got you. >> But yeah, I think you need to nail it and then the scaling of path will become clearer. Damn. I know it's not the the sexiest answer, but that's probably the truth. >> If you're a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out on the thank you page you can book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.