Beyond profit and loss

By Emma Peterson. 

Learn how to build a stronger financial foundation that will lead to long-term success.  

Managing a roofing business is hard work. Not only do you need to be an expert roofing contractor, but you also need to be a business professional. Balancing these two is a challenge that Owens Corning aims to help their contractors overcome. They have partnered with PHG, a strategic advisory firm that specializes in family and founder-owned businesses, to give Owens Corning Contractor Network members discounted access to financial assessments and reviews. To learn more about how these services can help contractors, Megan Ellsworth sat down Jon Gardner from Owens Corning and PHG’s Adam Gottlieb and Logan Marita for a Read Listen Watch® (RLW) webinar. 

Jon opened the conversation by sharing common issues he has seen contractors face when it comes to financial management. He explained, “Over 70% of the contractors don't receive monthly financials and over 50% of contractors can't accurately tell which jobs are profitable and which are losing money. Further, nearly 60% of contractors admit they make big business decisions on gut feel rather than financial reports.”  

This is not to say that contractors aren’t aware of financials, but they often don’t go deeper than cash-based accounting. Logan explained, “Simply put, cash-based accounting is when cash changes hands. So, say you sell a good or service and are paid cash for that at some later date. Then you also have a material cost to account for. This is also known as profit and loss. What people don’t often get to is accrual-based accounting. This is when those numbers are brought together and you can see that true monthly profitability of a business.”  

The monthly profitability is key for long-term success. As Adam puts it, “If you are managing a business by looking at their bank... you are not being proactive, you’re being reactive and can’t grow properly. The biggest takeaway we’ve had in our work is that being proactive leads to long-term success.” At the end of the day, it’s important for contractors to understand their financials not only to have more knowledge about their business, but also for growth opportunities. 

So, what can contractors do to understand their finances beyond simply profit and loss? Logan shared some ideas, “To manage the finances of your business correctly, you want to have a goal that's in multiple parts. So you’d have an annual goal that's broken down monthly, and then you get monthly results, and you kind of have this feedback loop where you're getting results, measuring against your goal, making changes in the business and tweaking as you go so you can get that growth and success you are hoping for.”  

Check out the full episode or Watch the recording to learn more about managing the financial side of owning a roofing business.