18 Year Old Colordo Roofing and Solar Company

The earnings for 2023 were 254K from 647K in revenues.  That is a 39% profit margin which is unheard of in the construction/service industry.  They do both residential and commercial roofing including the removal and re-installation of solar on roofs needing to be replaced and about 40% of their work is general construction projects.

In 2024, the company had 406K in earnings from 993K in revenues.  The drop in both revenues and earnings from 2023 to 2024 was for two reasons:  He spent 4 months out of the country last summer.  The 2nd reason is that the company has gotten 5 jobs over the last 5 years from a large client.  He never knows when the work will come but they have a long-term project and other property that should result in a lot more work.  The point is that this company had a larger project in 2023 from them than in 2024.  He asked the representative that he works with if he sold the company if they would still consider using his company in the future and the representative was ok with the sale if the new owner would still be using the same subs.  

The owner helps with sales, but he has a salesperson who finds and manages most of the work.  The salesperson has been there for over 2 years and earns a commission based on a percentage of the profits on all jobs that he sells and also manages.  This is important because the owner of most businesses this size are responsible for 100% of sales.  The salesman has been told that the company is to be sold and has indicated that he would like to work for the new owner just as he has worked for the current owner.  Most of their work is in West Metro Denver but this varies each year which is easy to adjust to when you have a choice of “crews” to do the work. 

The Sales Price is 660K which includes the company’s equipment that is estimated to be worth 50K.  This is made up of a dump trailer worth 10K, a 2nd trailer worth 5K, a coatings sprayer worth 6K, 2013 Chevy Silverado with a toolbox, and misc small tools and equipment.  He will keep cash and accounts receivables and a Caterpillar 303 excavator that he bought for a write off but is used at his property for various things including to clear snow from his driveway in the winter.  He will also pay off all debts including the accounts payables at or before the closing.  If I average the 406K earnings in 2023 and the 254K from 2024, it averages 330K which makes the 660K sales price only 2 times that number.  If he had sold at this time last year, 2 times multiple would have made this company worth 812K.  Keep in mind that he has not been very interested in roofing for a couple of years because of his increasing travels.      

This company is well established with a great reputation and an A+ BBB rating(Boulder based BBB) and 4.8 out of 5 rating with 27 reviews with Angie’s List which still shows up on Google if you Google them even though he stopped paying for referrals from Angie’s list several years ago.  

Growth Opportunities:  This business should be easy to expand with their reputation, accessible labor, and excellent website. This creates a solid base for future sales.  The new owner just needs to add SEO, ask for reviews from happy customers by creating an email template with a link to easily add a link to leave a review, turn back on Angie’s List referrals, add social media marketing, by spending more time than the current owner does on finding new customers, and by hiring 1 or more salespeople.  Plus, Colorado is growing, and Colorado roofs are replaced more often than any other states because of freezing and thawing, strong winds, high altitude sun damage, and hail storms.  Hailstorms are unpredictable but history shows Colorado gets several every year and big ones every 3-5 years.  Large hailstorms can bring in big revenues quickly and keep them busy for over 7 months.  The company has a strong relationship with a big Insurance company and the new owner can develop relationships with more insurance companies.

The owner states that company has relationships with enough independent “crews” to be able to handle a lot more work.  They use 8 different independent contractors that specialize in specific areas.  He uses several residential roofing crews, several commercial roofing crews, several construction crews, and crews that specialize in solar and other areas.  It took him years to find quality crews with the experience to let him focus on other things.  He is confident that the new owner can use all the same crews who he will introduce and transition the relationships after the closing. 

The company is partially seasonal which means that they are busier in the summer when most roofs are replaced.  This is very appealing to a lot of business owners because they want to take their vacations during the winter and want to be able to have the ability to enjoy skiing, etc.  The company works year-round and always has work in progress.  There will be jobs waiting for the new owner at the closing.     

Location:  The owner works out of his house.  The independent contractors bring their own equipment, vehicles, tools, and carry their own insurance.  There is no need for a traditional location.  He does store a couple of trailers and some tools and equipment on his property that may require the new owner to rent some storage space.   The storage space or small location should be in West Metro Denver possibly near Golden which is roughly the center of where most of their work is.

 Since 2006 they have completed hundreds of new roofs and have never had one complaint they didn’t take care of right away.  They are A+ rated with the Boulder BBB with no complaints and have a perfect track record. They also have a stellar worker’s safety history without one claim.  The seller will agree to full Reps and Warranties to a solid legal and business standing. This is an LLC and will be an asset sale.

No construction experience is necessary but there are two licenses that the new owner will want to get eventually.  He will let the new owner use his licenses in the meantime as long as he has no liability which can be taken care of with an inexpensive insurance policy.  He will train you and help you get your licenses which are a Roofing Contractor’s license which takes about 2 years and a General Contractors license.