How Profitable is a Roofing Contractor in 2023?

The roofing contractor market in the U.S., with a revenue of $56.2 billion in 2023 and an expected increase to $57.6 billion by 2028, offers a substantial opportunity for entrepreneurs. This article explores the roofing contractor business, focusing on its profitability, revenue potential, and the costs involved in running such a business.

We’ll delve into the financial aspects of the industry: What is the average revenue for a roofing contractor? How does this translate into daily jobs and annual income?

Additionally, we’ll discuss the startup costs for a roofing business. From equipment and marketing to licensing and vehicles, we’ll provide a detailed breakdown of the initial investment needed.

Finally, we’ll analyze the operating profit margin of a roofing business and the recurring costs involved in maintaining the business. Let’s dive in!

Roofing contractor market overview

As per IBIS, the roofing contractor market in the U.S. represented revenue of $56.2 billion in 2023 and is expected to grow to $57.6 billion by 2028.

Asphalt roofing represents the largest share ($18.5 billion), followed by single-ply roofing ($15.7 billion), sheet metal roofing ($12.9 billion), and other roofing services ($9 billion). Yet, with over 79,000 roofing contractors across the country, the competition is also fierce.

How much revenue does a roofing contractor make?

Using the same source earlier, it’s safe to assume that the average turnover for a roofing contractor is around $710,000. Indeed, the U.S. roofing contractor industry is worth $56.2 billion, and there are about 79,000 roofing contractors across the U.S.

Now, using data from more than 180 franchised roofing businesses, a roofing contractor earns $1,362,000 in gross revenue per year on average. This number is the average gross revenue per contractor from 180 businesses of the largest 4 roofing business franchises in the U.S.

With an average cost per job of $9,200. that’s a total of 148 jobs per year. Assuming 250 working days per year, that’s on average one job every 1-2 days.

Yet, not all roofing contractors have the same yearly revenue. Logically, some will earn more than others because of many factors like project scale, efficient management, local reputation, pricing strategies, team expertise, and adaptability to market trends.

How much does it cost to start a roofing business?

On average, it costs between $153,000 to $314,000 to open your own roofing business.

This includes various costs such as rent, utility, and leasehold improvements, along with licenses, professional fees, subscriptions, insurance, training, marketing, signage, tools and inventory, equipment, software, working capital for the first few months, etc.

• Rent, utility, and leasehold improvements (2%): Budget for rent, utility, and leasehold improvement to secure a stable physical space for the roofing business.
• Licenses, permits, professional fees, subscriptions, and insurance (9%): This cost covers the essential legal and operational requirements.
• Training expenses (3%): This emphasizes investment in skill development for the roofing personnel.
• Marketing (20%): This facilitates effective promotion and outreach in the competitive industry.
• Vehicles (7%): This ensures the roofing business has reliable transportation to efficiently service clients and meet on-site demands.
• Signage, other tools, and opening inventory (5%): This equips the team with signage for visibility to potential clients and essential tools and inventory for efficient operations.
• Furniture, fixtures, and equipment (23%): This ensures a well-equipped and functional workspace for roofing activities.
• Computer and software (5%): This addresses technological needs for efficient business and office management.
• Working capital (25%): This provides a financial cushion to manage day-to-day expenses like payroll, materials and supplies, repairs, etc., for the first 3-6 months of the business operations.

How profitable is a roofing business?

A roofing contractor has a ~15% operating profit margin (EBITDA margin) after operating costs (cost of services, office expenses, etc.) have been incurred.

Indeed, there are various recurring costs involved in running a roofing business. The major expenses include the cost of services, followed by other operating expenses:

• Cost of services (50-55% of revenue): This cost encompasses direct labor for roofing personnel, materials such as shingles and roofing supplies, equipment usage, etc., that contributed to delivering the roofing services to clients.
• Other operating costs (30-35% of revenue): This involves expenditures outside direct service, mostly on administrative expenses like office rent, utilities, office supplies, insurance, marketing expenses, etc.

Profit and loss	Amount (US$)	% revenue
Gross Revenue	$1,362,000	100%
Cost of services	$(735,480)	54%
Gross Profit	$626,520	46%
Other operating expenses	$(408,600)	30%
EBITDA	$217,920	16%