From Roofing to Home Improvement Having earned a reputation as a quality roofer in the local township, Ferguson had a choice to make: To expand his business, he could either reach out to neighborhoods throughout the Tampa Bay and St. Petersburg areas seeking residential re-roofing jobs or he could expand the menu of products and services his company offered and build on the reputation he’d developed within the community.
Each choice had its challenges. Going for more roofing jobs would mean running trucks an hour’s distance or more from the company’s offices and warehouse. It would also mean forfeiting the word-of-mouth advantage that Gold Seal Roofing enjoyed locally, and thereby having to spend a lot more on marketing to attract the interest of customers who wouldn’t know Gold Seal from Gold Medal Flour. (Referral/repeat leads generate 80% of Gold Seal’s business, and marketing costs currently run at 2%.) Turning his operation from a roofing company into a home improvement company would mean finding new products and retraining installers and salespeople.
Still, in 2000, Ferguson got a general contractors license, added “& Construction” to the company name, and began to go after new business. Gold Seal started offering room additions; vinyl siding; replacement windows; interior and exterior painting; soffit, fascia, and gutter repairs; and hurricane shutters. Two years ago, the company took on a line of sunrooms.
“In Florida, sunrooms are bigger than vinyl siding,” general manager Nick Nicholson says. “Everybody here wants a sunroom or a screened room. It’s a huge market” — one that he and Ferguson felt the company couldn’t afford to ignore.
To prompt business, Gold Seal installed a sunroom on the back of its offices and hired a full-time sunroom rep with considerable experience. But the company had difficulty getting its sunroom jobs installed.
“The marketing and sales are the easy parts,” Nicholson says. “The installing is the hard part.” To distinguish its product, the company began including a special roof on its sunrooms — one that would avoid the leaks that bedevil sunroom owners.
Attention to Detail Today 58% of Gold Seal Roofing & Construction’s sales are in residential roofing, with the rest divided among its other products. Roofing remains “the cash cow that drives the business,” according to Ferguson (Gold Seal does, on average, 15 to 20 re-roofs per week). Competition among roofing companies in the Tampa Bay area is fierce, with lots of truck-and-ladder operators, as well as established companies, using subcontractors that employ day laborers.
“We try to outsell them on quality,” Nicholson says, “and the fact that we’ve been here, and we’re going to be here, if and when your roof gets a leak.”
But that doesn’t mean customers will accept any price, or that price is not a consideration. To the contrary. “When you run your business 100% client, you have to look in every little nook and cranny for ways to reduce costs,” Nicholson says. For instance, several years ago, Gold Seal began drug testing new hires, partly to attract a higher-quality workforce but also to enable the company to save 5% on workers’ comp costs.
At least as big an opportunity for savings lies in managing the expenses associated with a job.
“Most of it is job costing and job control,” Nicholson says. The company — with more than 60 employees — has a full-time person in charge of inventory who closely watches what goes in and out, trying to strike a balance between having too much product versus running a few squares short.
“That’s where you keep your waste down,” he says. “We have a guy who signs stuff out, and we watch the dump truck. If you order a bit extra from the shop so you don’t have to come back, we want that returned to the shop.” There are incentives for crews that return excess shingles and other materials.
