The roofing industry is slowing down, but not every contractor is feeling the impact equally. While some roofing companies are struggling to keep their crews busy, others are maintaining steady revenue and finding opportunities to grow.
So what’s the difference?
In this episode of the Roofing Success Podcast, Jim Ahlin explains why some roofing companies are experiencing major revenue declines and shares five practical ways to protect your business when the market gets tough.
After interviewing more than 300 roofing business owners, Jim has noticed a common pattern. The companies that struggle most often have weaknesses in their business model that become impossible to ignore when demand slows down.
Why Are Roofing Companies Struggling?
According to industry data Jim shares, asphalt shingle shipments declined approximately 10% in 2025, while storm-related insurance claims dropped nearly 20%.
But if the overall market is down 10%, why are some roofing companies losing 50% or more of their revenue?
Jim identifies four common problems:
- Storm dependence: Relying too heavily on insurance restoration work.
- Financing limitations: Losing customers because they can’t qualify for available financing.
- Excessive debt: Carrying loan payments that only make sense during record-breaking years.
- High overhead: Maintaining staffing and expenses built around peak demand.
These challenges often overlap, making a slowdown even harder to manage.
The good news is that roofing contractors can take steps to address these weaknesses before they become serious financial problems.
1. Build a Business That Doesn’t Depend on Storms
Storm restoration can be profitable, but it shouldn’t be your only source of revenue.
Jim encourages roofing contractors to build consistent retail demand through homeowner education, online reviews, referrals, and marketing that reaches customers before severe weather occurs.
For storm-focused companies, he suggests working toward a 50% retail revenue mix as an initial goal. That transition takes time, but it creates a more predictable business.
The key is to track retail and insurance revenue separately so you can measure your progress.
2. Protect Your Best Employees
When revenue drops, many roofing owners immediately start thinking about cutting payroll. But making rushed staffing decisions can cost the business its strongest employees.
Jim recommends evaluating team members based on two things: how well they demonstrate your core values and how effectively they perform their jobs.
Your best employees should know they’re valued and understand their role in the company’s future.
It’s also important to address performance problems early and cross-train employees so critical responsibilities don’t depend on one person.
A downturn is challenging enough without losing the people who help your company succeed.
3. Improve Your Sales and Financing Processes
When roofing leads slow down, every opportunity matters more.
That means your team needs consistent processes for answering calls, booking appointments, presenting estimates, and following up with homeowners.
Financing is another area where contractors lose unnecessary sales.
Jim recommends working with multiple lenders instead of relying on one financing program. Different options can help homeowners with varying credit profiles qualify for affordable payments.
He also suggests discussing financing at the beginning of the sales appointment rather than waiting until the homeowner reacts to the total price.
For customers who aren’t ready for a full replacement, consider offering repairs, phased projects, or different pricing options.
And don’t forget collections. Invoice promptly, follow up on outstanding payments, and keep supplier accounts current.
4. Know Your Numbers Before Problems Get Worse
Many roofing owners don’t realize how serious a slowdown has become until their bank balance starts shrinking.
By then, the warning signs may have been there for months.
Jim recommends reviewing a weekly scorecard that includes:
- Leads by source
- Appointment booking rate
- Sales closing rate
- Average job value
- Production backlog
- Cash on hand
- Financing approval rate
These numbers help contractors recognize problems early and make adjustments before revenue declines become financial emergencies.
Jim also suggests establishing clear warning signs, such as leads dropping 20% for four consecutive weeks, so your leadership team knows when to take action.
5. Protect Your Profit and Cash Flow
Revenue alone doesn’t determine whether a roofing company is financially healthy.
Jim emphasizes understanding your margins, controlling debt, and maintaining enough cash to survive slower periods.
One common mistake is confusing markup with margin. A 40% markup on a roofing project produces approximately a 28.6% gross margin, not 40%.
Contractors should also know their break-even revenue and maintain cash reserves covering at least three to six months of fixed overhead.
Before taking on additional debt, consider whether the payments would still be manageable during a difficult year.
The goal is to build a company that can remain profitable without relying on record-breaking sales every season.
How to Put These Five Moves Into Action
Jim recommends evaluating your roofing business across seven areas: leadership, people, customers and vendors, balance sheet, revenue, expenses, and technology.
Have your leadership team assess each area independently, compare the results, and identify the three biggest weaknesses.
Then assign one person to each priority and review progress weekly.
Trying to fix everything at once rarely works. Focusing on a few meaningful improvements gives your company a better chance of making lasting changes.
Build a Roofing Company That Can Handle Any Market
Roofing contractors can’t control the weather, interest rates, or changes in homeowner demand. But they can control how their businesses prepare for those challenges.
The companies that survive difficult markets aren’t necessarily the biggest. They’re the ones with strong teams, reliable processes, diversified revenue, and a clear understanding of their finances.
As Jim puts it, “It’s not the market, it’s the model.”
And the sooner you strengthen that model, the better prepared your roofing company will be for whatever comes next.
