Business Management, Estimating and Contract Law
Business Management
Licensing
Michigan licenses residential builders and residential maintenance and alteration contractors through LARA. Roofing on residential structures falls under the maintenance and alteration license. Working without the required license exposes you to penalties, and an unlicensed contractor generally cannot enforce a residential contract in court - a strong reason to keep the license current and carry proof.
Insurance and workforce
Carry general liability insurance and, where you have employees, workers' compensation. Michigan requires workers' compensation coverage for construction employers with one or more employees, a lower threshold than in most industries. Collect certificates of insurance from subcontractors, and treat them as independent businesses only if they genuinely operate that way.
Contracts and records
Every job needs a written contract: scope, materials, color, start and completion dates, price and payment schedule, change-order procedure, warranty and lien notice. Keep job files, receipts, signed change orders and photos for the period your contracts and the statutes require.
Customer protection
Door-to-door sales are regulated. Michigan's Home Solicitation Sales Act generally gives the buyer three business days to cancel certain sales, and post-storm roofing solicitations are a frequent complaint category. Be truthful about insurance claims and never offer to pay a deductible.
Lien rights
Contractors have lien rights under the Michigan Construction Lien Act, but the rights are deadline-driven: notices and recordings must be timely or the right is lost. Track first-furnishing and last-furnishing dates in every file.
Rule of thumb
Price to cover overhead and profit, not just materials and labor. A contractor who bills cost plus a small markup typically loses money on callbacks and warranty work.
Estimating and Contract Law
Measuring
Roofs are measured in squares of 100 square feet of finished surface. Measure plan dimensions, then apply the pitch multiplier - about 1.06 at 3:12, 1.12 at 6:12, 1.25 at 9:12 and 1.30 at 12:12. Add for hips, valleys, dormers and overhangs, and add waste: about 10 percent for a simple gable and 15 percent or more for a cut-up roof.
Line items
A defensible estimate separates tear-off and disposal, decking, underlayment, ice-dam membrane, flashing, shingles, ridge and ventilation, labor, permits, overhead and profit. Lump-sum bids hide risk but make change orders harder to justify.
Markup versus margin
Cost plus markup is not margin. To earn a 30 percent gross margin on 10,000 dollars of cost, divide by 0.70: price = 10,000 / 0.70 = 14,286 dollars. Pricing at 13,000 dollars yields about a 23 percent margin, not 30. This distinction is a favorite exam item.
Contract essentials
Offer, acceptance, consideration and lawful purpose, plus identifiable parties, scope, price and signatures. Write change orders before performing extra work. Michigan's Home Solicitation Sales Act gives a three-business-day cancellation right for many door-to-door sales, so the required notice belongs in the contract.
Liens and payment
Michigan's Construction Lien Act is deadline-driven. Subcontractors and suppliers generally must serve a Notice of Furnishing on the owner or designee within 20 days after first furnishing labor or material, and a claim of lien must generally be recorded within 90 days after last furnishing. Confirm the residential-specific rules before relying on a lien.
Worked example continued
A 1,200 sq ft footprint at 6:12 gives 1,344 sq ft, or 13.4 squares; with 15 percent waste for a cut-up roof, order about 15.5 squares.
Rule of thumb
Never start work without a signed contract and a deposit schedule that keeps the job cash-positive.