High-Margin Roofing Contractor, Central Missouri

$1.5M

Revenue

$916K

SDE

3.3x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a roofing contractor based in Hartsburg, Missouri, just outside Columbia in Boone County. It offers a full slate of roofing services: new installs, repairs, and full replacements across what the seller describes as a diverse customer base. The headline number is the margin. On $1.54M of revenue, the business throws off $916K in cash flow, which is roughly a 60% owner-earnings margin. That is extraordinary for a roofing shop and is the single most important number to interrogate in this deal.

The operation is lean to the point of being almost implausible: two full-time employees and a $550 per month facility. That structure implies heavy reliance on subcontracted crews and a very hands-on owner who is likely selling, estimating, and running the jobs personally. Roofing is a demand-durable, insurance-and-weather-driven trade where storm events and aging housing stock keep replacement volume steady regardless of the broader economy, which is why the underlying service holds up in a downturn.

At $3M asking against $916K cash flow, the multiple is 3.27x, which is not cheap for a two-person contractor with concentration risk around the owner. The upside case is real if the earnings are clean and transferable: geographic expansion around Columbia and Central Missouri, a real marketing function, and adjacent exterior services (gutters, siding) are the obvious levers. The whole deal hinges on whether that 60% margin survives the owner's departure.

Why we like it

The earnings margin is the story here: $916K of cash flow on $1.54M of revenue is a roughly 60% owner-earnings margin, which is exceptional for a roofing contractor where 20-35% is more typical. If verified and transferable, that margin gives a buyer enormous room to reinvest in marketing and crews while still clearing strong returns.
Roofing is genuinely demand-durable. Roofs fail, storms hit, and insurance claims fund replacements regardless of the economic cycle, so this is a service homeowners cannot defer indefinitely. That recession resistance protects the downside on the earnings base in a way discretionary home improvement does not.
The cost structure is remarkably lean, with only two full-time employees and a $550 per month facility. That implies a subcontractor-driven model with minimal fixed overhead, which is exactly why the margins are so high and why a buyer is not inheriting a heavy payroll or lease burden.
The seller is retiring and offering support and training, which creates a clean, motivated exit and a window to capture the relationship and estimating knowledge. A retiring owner is more likely to negotiate on terms and stay engaged through a handover than an opportunistic flipper.

How to improve it

Build a real lead-generation engine in the first 90 days. With only $1.5M in revenue in a market anchored by Columbia and Central Missouri, a modest spend on Google LSA, storm-chasing campaigns, and canvassing after weather events could lift volume materially given the existing margin structure.
Systematize and document the estimating and sales process the owner runs personally. The entire margin advantage likely lives in the owner's head, so codify pricing, supplier relationships, and quoting workflows into a repeatable playbook that survives the transition.
Recruit and develop a dedicated sales estimator to replace the owner's rainmaking role. With two employees, the owner is almost certainly the primary producer, and hiring a commissioned estimator early de-risks the single biggest transfer problem in this deal.
Add adjacent exterior services such as gutters, siding, and skylights. These bolt onto existing roofing jobs, raise average ticket size, and use the same crews and customer relationships without meaningfully expanding overhead.
Formalize the insurance claim workflow to capture more storm-damage replacements. Roofers who partner tightly with adjusters and handle the claims paperwork win more full-replacement jobs at higher margins, and a dedicated claims process compounds volume.
Expand geographically into neighboring counties around Boone County. The current footprint appears tight, and a second service territory could nearly double addressable demand while leveraging the same back office and subcontractor network.

Diligence notes

Stress-test the 60% cash-flow margin above everything else. Pull three years of tax returns and bank statements, and reconcile whether the $916K figure is genuine owner earnings or heavily add-back adjusted. A margin this high for a two-person roofer is either a real edge or a red flag, and you must know which before offering.
Understand exactly how work gets done with only two employees. Confirm the subcontractor arrangements, whether crews are stable and available, and how labor cost flows through the P&L, because if the owner personally performs the estimating and project management, the earnings may not transfer at the stated level.
Quantify owner dependence and customer concentration. Identify how much revenue traces to the owner's personal relationships and referral sources, and whether any single builder, property manager, or insurance channel drives an outsized share of jobs that could walk after closing.
Verify licensing, insurance, warranty exposure, and workmanship liability. Roofing carries meaningful callback and warranty risk, so review outstanding warranty obligations, any pending disputes, and whether the contractor licensing transfers cleanly to a new owner in Missouri.
Assess revenue seasonality and weather dependence. Central Missouri roofing volume can swing with storm activity, so review monthly revenue to understand how much of the earnings is recurring baseline demand versus lumpy storm-driven spikes that may not repeat.

Source

Originally listed on BizBuySell. View original listing →