Part of our 2009 Market Leaders coverage.
In a recession, homeowners tend to migrate toward less expensive options when it comes time to remodel or repair their homes. That's especially bad news for a company that delivers high-end materials in the specialty exterior market.
"Everyone that's ever put on a roof before, when they're out of work they get themselves a pick-up truck and call themselves a roofer," says Lance Smith, president of State Roofing.
Over the last 40 years, the company has built itself into one of the largest roofing companies in the country by focusing on high-end materials such as metal and rubber roofs that appealed to clients for their longevity and quality. Now, price is driving many buying decisions as homeowners opt for the cheapest option — even if that option is a remodeler that isn't licensed, insured or bonded.
State Roofing's siding and decking business are down more than 75 percent this year and the roofing business is down about 40 percent. Despite those declines, the company has been able to survive while many of its big competitors haven't.
Smith credits that to his cautious approach to business built over the 30 years since he and his brother bought the company from their uncle.
For example, the company buys all of its trucks instead of leasing them like many of his competitors. At the same time, State Roofing keeps those trucks for as long as possible instead of buying or leasing new ones every few years. State Roofing also owns its own property instead of renting.
Perhaps most importantly, State Roofing never jumped into the new construction market, even when it was booming in the Seattle area. More than one of his former competitors has disappeared because of an over reliance on home builders, Smith says.
|No. 1 in Seattle|
|President: Lance Smith|
|Specialty: Exterior remodeler|
|2008 projects: 1,306|
|2008 volume: $19.1 million|
|Projected 2009 volume: $13 million|
|Years in business: 40|