Roofing & Exterior Services Company, Missouri Contractor

$3.4M

Revenue

$582K

SDE

5.6x

Multiple

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Full Editorial Writeup

This is an established Missouri roofing and exterior services contractor offering roofing, siding, gutters, and related home improvement work. The company has built a recognized local brand backed by strong customer reviews and a healthy flow of referral business, which together have driven consistent revenue growth and above-average margins. At $3.38M in revenue and $581,601 in cash flow, it runs a roughly 17 percent owner-earnings margin, which is solid for a residential exterior contractor and suggests disciplined pricing and job costing.

The operation is built on experienced staff, established supplier relationships, and documented operational systems, meaning the business is not purely a one-person shop dependent on the owner swinging a hammer. Roofing and exterior repair sit squarely in the essential-repair category: hail, wind, age, and insurance claims create demand that does not fully evaporate in a downturn, which supports the listing's claim of operating in a resilient industry.

The caveat is that project revenue is transactional. Each roof is a one-time sale, so growth depends on maintaining lead flow, brand recognition, and referral momentum rather than a contracted book. At a 5.59x cash flow multiple, a buyer is paying up for the brand and profitability, so the diligence question is how durable that lead engine is without the current owner.

Why we like it

Earnings quality is strong for the category, with $581,601 of cash flow on $3.38M revenue for a roughly 17 percent margin. That kind of profitability in residential exteriors typically signals disciplined job costing, real pricing power from the brand, and efficient crew utilization rather than chasing every low-margin job.
The moat here is brand and reputation. Strong reviews, referral flow, and recognized local branding are the exact assets that lower customer acquisition cost in home services, and they compound over time as more completed jobs feed more word-of-mouth in a defined geography.
Roofing and exterior work is genuinely recession-resistant. A leaking or storm-damaged roof gets fixed regardless of the economy, and insurance-driven claims plus non-discretionary repair demand provide a demand floor that discretionary home projects lack.
The business is not a solo owner-operator dependent on the seller physically working. Experienced staff, established supplier relationships, and proven operational systems mean an acquirer inherits an actual operating platform, which materially lowers execution risk during transition.

How to improve it

Stand up a formal insurance-claims workflow if one does not already exist. Storm and hail damage claims are the highest-margin, highest-volume lane in roofing, and a dedicated claims specialist plus adjuster relationships can meaningfully lift both ticket size and close rate within the first quarter.
Layer in a maintenance and inspection membership to convert one-time roof buyers into recurring revenue. Annual roof inspections, gutter cleaning, and minor repair plans create a returning revenue base that both smooths seasonality and raises enterprise value at exit.
Systematize lead generation beyond referrals. Referrals are great but finite, so add paid search, Google Local Services ads, and a review-generation engine to reduce dependence on organic word-of-mouth and make the pipeline more predictable and scalable.
Push commercial and multi-family exterior work alongside residential. Commercial re-roofs and property-manager relationships offer larger tickets and repeat volume, diversifying away from single-home transactions and smoothing the lumpiness of residential demand.
Tighten crew productivity and gross margin tracking by job type. Instrument each job for labor hours, material waste, and warranty callbacks so you can shed low-margin work, and consider expanding higher-margin siding and gutter attach rates on existing roofing jobs.
Build out a financing option at point of sale. Offering consumer financing on full roof replacements increases close rates and average job value, capturing customers who would otherwise defer, and is a fast lever an operator can add in weeks.

Diligence notes

Verify the reason for sale and the seller's actual role in the business. The listing is silent on why the owner is selling and how much revenue depends on the owner's personal selling, estimating, or relationships, which is the single biggest risk in a referral-driven contractor.
Scrutinize revenue concentration and storm dependency. Roofing revenue can spike in hail years and crater in calm ones, so pull three to five years of financials and separate baseline demand from weather-driven catastrophe surges to normalize the $3.38M top line.
Confirm licensing, workers' comp, and warranty liabilities. Check the contractor's license status, insurance history, open workmanship warranty obligations, and any pending litigation or callback exposure, since exterior work carries real long-tail warranty risk.
Validate the crew and subcontractor structure. Determine whether crews are W-2 employees or subs, whether key foremen will stay post-close, and how labor is sourced, because a roofing business is only as durable as its ability to field competent crews.
Reconcile the cash flow figure to tax returns and add-backs. A 5.59x multiple leaves little room for surprises, so verify the $581,601 with bank statements and returns, and scrutinize add-backs for owner labor that a new operator would have to replace with hired management.

Source

Originally listed on BusinessBroker.net. View original listing →