Novice buying Commercial Roofing Co, help with Due Diligence

Hi All,
I’m a 30 year veteran of the IT Consulting business and am closing up my IT Consulting business (want to stop being on the road all the time) and have found a Commercial Roofing business for sale that has I think is a good opportunity to transition into a new business.

This business has a Manager that already handles sales/bidding/vendors/etc. However, the owner currently is also involved in that as well.

My question’s are:

  1. How difficult and how long would it take to become suffiicent to operate a Commercial roofing business, being that I’m a novice to this industry. I have experience negotiating contracts for IT Consultants but not in this arena.

  2. Who/what would you folks suggest to in the form of resources (either consultant or other) to help me in the Due Diligence phase of buying this company. I expect I might need someone very familiar with this industry.

Thx,
Bob

This is actually a much more complicated industry, specifically the commercial side of the industry then most realize.

I truly believe that to be successful as a commercial contractor you need to have a solid fundamental understanding of how to install a commercial roof- I’d spend a few years installing, estimating, servicing, and selling before I’d jump into managing or running the company.

Check out the National Roofing Contractors Association’s “Future Executives Institute” (NRCA-FEI) as a resource.

@TJ_McKenzie totally agree.

I worked at a 70 plus year old roofing company for many years before starting my own thing. (Repairs and shingles )
Mind you I was in residential but I can tell you that the commercial division was tight. Meaning from the estimating to installing everything was dependent on everyone knowing their role and performing well.
It’s all about the margins and the job running.
Going from IT to roofing is a big leap.
Not undoable just that you may have a steep curve.
If I were offered that same deal today I would not consider it without bringing on board my best most experienced buds.
(That’s just me)

I agree with the two previous posts. Per your self description, you have no technical expertise in this business. Let me ask you this. If there was a roofer with 30 years of experience in that discipline, do you think they would be qualified to purchase an IT Firm that mostly did larger Commercial Jobs? Were this residential, I’d say you might have a reasonable chance of succeeding. I’d say your chances in starting out with this deal on the commercial side are much greater to fail than they are to succeed.

Assuming you may plunge ahead, what exactly is it your purchasing? Seems to me there are several reasons to purchase a business. Assets (equipment, buildings/property, etc.), industry branding/reputation, intellectual property or an existing customer base that represents a solid repeat business. I suspect there are plenty of opportunities to purchase equipment and property to get in this business, so that doesn’t seem to be the justification. Unless this company has contracts with large Regional or National Companies (such as WalMarts, Restaurant Chains, etc.), the existing Customer base is most likely a big anchor (due to the ongoing potential for warranty concerns) versus be an asset. Intellectual property would likely be the couple of people that do the estimating. What guarantees do you have they would stay around and work at the same motivational level? Unless this company is known in your area of service as THE go to company, what is that buying you?

If you were in the business for 30 years, you’re no spring chicken. You sold your business, you apparently have some money you want to invest and something to do for a few more years. It would seem to make more sense to put that money into an area you already have some expertise in. Learning a new business from scratch, especially when you’re paying the bill and it is on the commercial side, could be a very expensive learning experience.