Business, Financial Management, and Project Administration
Business, Financial Management, and Project Administration
This domain tests the paperwork and money skills a roofer needs: a contract that survives a dispute, a budget that shows real profit, and documentation that supports both.
- A residential roofing contract should be written and identify the property, scope, materials, color, manufacturer, underlayment, flashing, number of layers to be removed, price, payment schedule, and change-order procedure. Mississippi's home-repair fraud statute punishes deceptive repair practices, so the written description must match the work actually performed.
- Change orders: written, signed, and priced before the work proceeds. Oral changes are how "extras" turn into unpaid losses.
- Job costing: separate labor, material, dumpster, permits, equipment, and subcontractors. Compare committed cost to budget weekly; roofing margins disappear in tear-off labor and disposal.
- Markup versus margin: price = cost divided by (1 minus target margin), or cost times a markup factor. These are not the same number.
- Cash flow: collections lag payroll and material draws; retainage on commercial work and supplier deposits both tie up cash. Hold a working-capital reserve.
- Lien and notice deadlines: Mississippi construction lien law sets strict notice and filing windows; late paper means an unsecured debt. Verify subcontractor certificates of insurance before they reach the roof.
- Closeout: submittals, manufacturer warranties, permit inspections, final photos, and a written punch list protect the retainage.
Worked example. Crew, materials, and disposal total $48,000. You want a 20% gross margin. Adding 20% to cost gives $57,600, which is only a 16.7% margin. Divide instead: $48,000 / 0.80 = $60,000. Margin is $12,000, exactly 20% of price.
Traps. Adding markup and calling it margin; billing ahead of work performed; no signed change orders; forgetting retainage when pricing commercial work; and treating a supplier's verbal quote as a locked price.