Roofing Success

When Regulators Go Rogue: The War on Roofing Contractors with Garen Armstrong

• Jim Ahlin • Episode 247

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Roofing contractors, this is a battle you need to see! In this episode, Garen Armstrong of Shamrock Roofing reveals how regulators in Iowa are targeting contractors with sting operations and cease-and-desist orders—putting family-owned businesses at risk. But Garen isn’t backing down. He’s taking the fight to federal court and leading the charge to protect contractors and homeowners alike. 

Discover:
- The shocking sting operations designed to trap roofing contractors.
- How Garen’s federal lawsuit could set a new precedent for the industry.
- What YOU can do to navigate these challenges and protect your business.

Garen’s story is more than an inspiring fight; it’s a roadmap for growth, leadership, and resilience. Whether you’re battling regulatory overreach or looking to scale your company, this episode is packed with actionable insights from a true trailblazer.

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Speaker 1:

Imagine everything you've worked for being wiped out overnight. Garen Armstrong is facing down regulators trying to inhibit roofing contractors from doing business, and he's here to show you how to fight back and win. In this episode, garen shares his bold fight for contractor rights, how he's scaling Shamrock Roofing with precision and the lessons he's learned from navigating one of the toughest markets in the country. Garen Armstrong is a fearless leader behind Shamrock Roofing, a multi-million dollar roofing company built on grit, growth and standing up for what's right. Garen's story is a rallying cry for contractors everywhere. From battling unfair policies in Iowa to leading a team that's reshaping the roofing landscape, garen's mission is clear Protect contractors, support communities and never back down from a challenge. This episode is more than just a business story. It's a movement. Whether you're looking to grow your business, fight for your rights or learn from a true trailblazer, garen's insights are unmissable. Let's get started.

Speaker 1:

Welcome to the Roofing Success Podcast. I'm Jim Alleyne and I'm here to bring you insights from top leaders in the roofing industry to help you grow and scale your roofing business. Shamrock Roofing is in the house. Garen Armstrong, how are you, brother? Hey, I'm great. It's good to be here. How are you doing?

Speaker 1:

It is man, it's been a couple of years since we chatted, I think you, I love your story. I love your story of overcoming adversity, the health issues you had, how your team stepped up. We talked about that on the last podcast years ago and wanted to have you back because, man, you just have continued to grow and expand and it's been amazing to watch and I think it's a lot of fun, man. Another thing you're getting into it with with with with government officials. Now you're, you're, you're getting in the ring with with with in the courts. I'd love to talk to you a little bit about that. Let's start with that. Man, from all the things you've told me, iowa has been kind of getting to be a very treacherous place for contractors in terms of OOPA laws. Talk about that a little bit.

Speaker 2:

Yeah, so the IID, the Iowa Insurance Department, has been sending out cease and desist orders to multiple contractors, just putting family-owned and operated businesses out of work, and hired a police officer cop to set up snitch lines and set up a trap house to call contractors and have them come out to the house. They had a little hurricane microburst up there that came that, and so they had a house over by there and they'd call people out and if they brought up the process, they said, hey, you know, you don't need to file a claim, your roof is good. You know, boom, they send them a cease and assist. You know, if a contractor heard about another contractor, they would call on another contractor. And you know, this roof is brutal, right, you got, you got contractors. It's very cutthroat, and so you know if their, if their intention was to help the homeowner, they wouldn't be going at and gutting the contractors and putting them out of business. And so they sent me a warning letter and I said my attorney sent them back and asked them what are we doing? What are you wrong? They go, they list two pages, a list of this very vague stuff, of some of these things that aren't even laws, they're not even on the books, right, and so one of them was someone gave us a five-star review on Google and it said Caden did a great job, he held me throughout the process, so they used the word process in there, and so it was just a long laundry list of things and I said you know, we can't even talk, we can't even breathe, can't even mark it, and so it's like a, so immediately I just sued them in federal court. It's like a, so immediately I just sued them in federal court.

Speaker 2:

I said let's, let's, let's, let's, let's, let the federal judge, judges say what it is we can and can't say versus the Iowa insurance department, because they, they, they're, they're, there's ways to do this right. Like I'm in 16 markets and nine States, and this is the only state that's this egregious on how we work right, and so I'm happy and I've got state representatives in Iowa that agree with me. This is way heavy handed. It's very wrong because of the amount of business that all these roofers provide. I mean, we're buying shingles, we're buying marketing, we're hiring subcontractors, we're doing all the things right, and so it's a very unfriendly business situation. And in addition to that, where's the consumer protection advocacy at right? Because if they're under the attorney general, then then then there's the insurance department. They're just lapdogs for the insurance agencies that are lobbying them to not pay the claims out, because the consumer protection agency should be protecting them.

Speaker 2:

And the reason I did this is really it's about the passion that I have for, time and time again, the elderly, the elderly 80-year-old. They pay their claims year after year and they're getting denied. They're on a fixed income and you see their eyes start welling up and then the roof is completely wrecked. And yet I'm the first line of defense. They don't even know what a public adjuster is. They don't know who's a public adjuster, they don't know how to. Who's a public adjuster, first and foremost? So they call a roofer and then we come out there and start to explain it. But if you start to explain it, then boom, they put you out of business. Well, you know so. And on top of that, a public adjuster will only take the claim if it's $50,000 or more, and the average claim is we do is $17,000. And so it's been I think to your point.

Speaker 1:

There is people don't call public adjusters to like that's not their first call. Really, their first call is to a contractor or to their insurance agent, right Like that's who they're calling first. And if you're calling your insurance agent, you know that route, right Like there's you know and then you know. So having that, having you know different eyes on it, here's what's crazy to me, because it like it's like a sting operation is what you're talking about, and this is where it's really concerning, because you know it's. They're setting up houses inviting contractors to come in and inspect a roof and then hitting them with the cease and desist because of anything that they've said at the like it's, it's, it's. That's crazy, man, like I mean the, the phone line and things like that is crazy too.

Speaker 2:

But to actually set up like a sting operation to see if someone's talking about an insurance policy, to see if a contractor is talking about an insurance policy, yeah, wow, like that, that's amazing, like that's crazy, it's very egregious and that's kind of when you know you have, you have to stand up, you know, and and and that's why I said you know, okay, this is, I'm not going to file this in in in in Iowa state so it can sit there and spin around in circles, because I'm friendly with the state, I'm friendly with the. I mean, I do business, you know, I hire people from iowa. I'm there, I'm not like wanting to go out of the state, but the federal officials like. So who's overseeing the, the, the, the head of the insurance department of labor there, insurance department, sorry. So like, because, like it's the same, it's attorney general and the attorney general is overseeing the consumer protection agency. So yeah, but I guess nobody's lobbying the insurance or the consumer protection agency.

Speaker 1:

No one's lobbying on that side. Yeah, no one's lobbying from the consumer side. Yeah, and, man, it would be interesting to know how this came to be right, Like I would like you know. Maybe you'll get to kind of find some of that out as you go through your case. But you know, how did? How did they? How did they say, man, we need to crack down on this. This is a problem big enough where we're going to hire, you know, a head of this department. We're going to go and do these sting operations and set up like it's.

Speaker 2:

So I wonder where that came from. So I'll tell you. I'll tell you. So the reinsurance market has gone up. So insurance companies have reinsurance, right, and reinsurance premiums have gone up nationwide from the storms everywhere, right, yeah, and, and so they're. Everyone's premiums have gone up significantly, right, and they're, and you know, and they call, they have these cat storms, catastrophe storms, and then they call these little hail storms, you know, they call kitty cat storms, right, and so they're saying this all these kitty cat storms are are adding up right, and, and so they think that you know we're responsible for the storms that are happening, when the only thing we're responsible for is answering a phone call or, you know, going out there to go help a homeowner with the roof. That's again, our average ticket item is $16,000 to $17,000. So, at which, you know, the public adjusters don't even come down and grab because it's not there, and I think only 5% or less than 5% of people even know what a public adjuster is or even how to get one If they would accept that case in the first place, accept that case in the first place.

Speaker 2:

And so there's this whole market of the 85% of people or more that need help and, um, you know that's the solution is. The solution is want they need past testing for a lot for to be a general contractor or get a roofing license there. They need to have more insurance. They need to raise the bar for people to be able to get in in the roof in Iowa. There's a whole lot of things that can do different and I'm happy, you know that's why I got the state representatives talk to him about it, because I wasn't going to go talk to Doug Oman about it. Who's the guy who was appointed by the? You know he's about to retire. Like, just go ahead and retire early, because I know this case is going to take some time. I'm not letting off. So, and the copy hired, I got their names too.

Speaker 1:

But yeah, man, that's it, that's. That's such a tough one. Is they looked at language, not only on your website about your company and what you guys do, but looking at those Google reviews, this is something that you know like. It's a homeowner, it's a customer, someone you know writing this. It's not you guys writing it. It's a customer, or someone you know writing this. It's not you guys writing it. It's not even that's. That is another egregious thing to write like how, how, how far reaching and how much are they like the type of digging that they're actually doing into, into this?

Speaker 2:

Like right, it's, it's, it's, it's over the top and and and it's not only violating my freedom of speech, but, I have you know, it's violating other people's freedom of speech about me. So now somebody can't say that I've done a good job, you know. So it's like when's that going to stop? Like, you know, how do we change it? And so you know, that's why the federal court is the proper venue and jurisdiction for this.

Speaker 1:

Well, you know, keep the industry updated on how things are going. Man, that's a, you know, get. There's a lot of people I know a lot of good roofers in Iowa that I could connect you with too and make sure you guys are, all you know, kind of aligned and moving in the right direction. And having the having a cohesive voice Cause it, man, that this type of stuff is crazy. I know, I know, I know Roland Brown had to deal with this down in Texas. You know and, and, and, and and had a had a struggle. It didn't end as in in the way that that that it that it probably should have for roofing contractors, right that's right.

Speaker 2:

You know he filed it in state court and Supreme Court. You know that's where we went straight to the federal court. And also, you know there's a lot of good roofing contractors in Iowa and there's a lot of good public adjusters, right. But when NAPIA National Association of Public Adjusters are consistently praising the IID for their work, and then TAPIA and NAPIA wrote an amicus brief to the state regarding against Stonewater, that's when you know I'll use public adjusters who aren't associated with napia or tapia. I mean, they poisoned the well they really did. You know they want to live off the backs. They want to market to public contractors like me, because, again, nobody knows what a public adjuster is, and yet then they want to stab us in the back at the same time. Yeah it's.

Speaker 1:

It's crazy, man. There's a self-interest, is a, is a is a strange thing, right, and it comes from all facets. It's the self-interest of the public adjusters, but the the self-interest of government agencies, right, adjusters, but the self-interest of government agencies, right, they feel like they always have to do more and always have to. You know, hopefully we get some changes in that here in the next few years. Yes, looking forward to that. Yeah, hopefully, man it's, you know, because it could get crazy, or it already is crazy, it already is crazy.

Speaker 2:

And even if this case, you know, puts them back on their heels and say, hey, hey, we're forcing this way too hard, we need to step back in our lane, we need to readjust how we're talking. You know going after people, or, you know, get their alignments in place, I'd be happy to say, hey, dude, this, what works up in my other eight States that I'm in, you know you're licensing your insurance, or this, you're this, you're this, you know to to weed out a lot of the bad contractors, right, yeah, that's, that's what you, that's all they have to do, and it's a revenue source, because then they're paying to be a part of it. They're paying. You know all these things, things so it even helps the state.

Speaker 2:

But, um, now that I got their attention then I'll be happy to sit down with them and and go over how we can help, uh, fix the situation. I mean, if they weren't setting up, you know, sting operations and stuff, then then maybe I would have been gone about a little different, but they did, yeah, it was a very like that.

Speaker 1:

That, like you said, that's a very egregious thing, man. Like Like that's really crossing some lines there. You know, like it's a it's like what are you like? It's like they do that to liquor stores and you know like they send underage people into liquor stores. They do like that's the type of stuff, like that's. It seems like it's for it's much more for outside of of of what we do on a regular basis right, this is this yeah, this, this is crazy man, right like so, so.

Speaker 2:

So it's like a felony, it's not. You know it's a fine, but they're putting people's livelihood out of business completely, and the subcontractors and there's a whole, and and the manufacturers who's buying from them. The whole impact that they're doing to hurt the ecosystem and the economy there in Iowa.

Speaker 1:

Let's talk about it a little bit on a broader scale, because you do operate in eight states, right? How do you navigate the kind of the differences in regulation from all of the jurisdictions that you work in?

Speaker 2:

So a lot of attorneys, national attorneys, so that's one thing. But you know, obviously we have a large back office and you know we study the states, what they are, the municipal, the codes in each state. You know what the licenses look like and the municipalities and then, um, you know, adhere to those. So you know.

Speaker 2:

For you know, I just got back from Colorado, had to take the Pikes Peak Class A General Contractors Exam. I've already had a Class A General Contractors exam for eight years, but they wanted their very own. So you know I had to go out there to do that. And of course, you know the insurance requirements and things like that, which it's just something that separates the wheat from the shaft, right, and so I'm happy to do it. That's what Shamrock represents, you know, and we over-insure our you know so that and our quality of work. So, but when we're dealing with, you know, it's nine states and 16 locations we definitely have a great back office looking at, you know, pulling the permits, working on everything and working on that. So it's not an easy feat.

Speaker 1:

You know how have you structured that? You know, do you have? How have you structured it from operationally? You know, do you have a central location for a lot of things? And then you know you have your local stuff. How, how would? I think it's interesting to people who are looking to grow right like you know, man, we could, you know we could, we could go and set up a shop there and they could be completely independent and and run everything there. What maybe some of you know what? How have you structured it and what efficiencies have you found in in the way that you've structured it?

Speaker 2:

So we structured it with the hub and smoke model to where we have HQ in Kansas city, and then all of our branches are, you know, they started out going, you know, three hours away, you know. So we went up North, you know, omaha Lincoln, des Moines, and then started going, you know, and then the seasonality of roofing started to hurt us really bad in the wintertime. And so then then we started going down to the Southern markets um to keep the to, to level out the seasonality uh, still a real thing, but um, so then that's what we did, and then what we, we, we stayed there for quite some time while we figured it out, and the way we did that was having the, the um, the headquarters there, pulling permits, you know. So we have everybody together in, you know, in an office, two offices actually 27,000 square feet, but uh, that are working together, that's able to leverage other people's knowledge in the office, so that in a branch we have an office manager, a branch manager in, basically, field trainers that are, that are out with the guys, you know, as well as quality control, and then so that's how we set up each market and then, once we got that figured out, from the three-hour radius of the Shamrock Nation. Then we were able to start, you know, daaining locations further um, and you know that's been our, our, so, so we're down all the way down in in houston now, we're all the way over into into colorado springs, denver now, and up to, uh, south dakota. So, but you know, and the goal is to move up to the quad cities in Iowa, cause I really, really love the people in Iowa.

Speaker 2:

What I love working in the heartland is, you know, a handshake still means something, and that's, you know. I like to say that I'm brilliant and I planned this. I'm just born and raised from here, you know, and so we've been. I've always had storms grew up in it and um and so, so anyway, so that's why I, you know, I wrote the people of Iowa. I mean, that's what I really like working there. And then so, when they did that, I'm like, look man, this is not right. And so that's also what led into that.

Speaker 1:

But yeah, yeah for sure. Now, as you're growing from market to market, let's talk about what you're thinking about, like and and you know what you're thinking about now not one of not some of those first ones, right like, because I'm sure some of the first ones was like oh, it's a three-hour drive, there's a storm there. Let's go right like that's, that's how, and maybe that's not how it happened, but that's how it usually happens, right like. Yeah, um it from a strategic aspect now, because now it sounds like, I mean, now, at the size you guys are at, there's some strategy, right? So?

Speaker 1:

when you're looking at your expansion. You know, talk me through what you know, your kind of what you're thinking, how you're looking at the market, the team, what you're going to need in terms of you know, from a team side of things, from a logistical side of things, what are you, what do you? Walk me through that.

Speaker 2:

So I'm looking at the market demographics of where I'm going to go first. So if I'm, because I've gone to I've opened up, all of my offices are brick and mortar, so I've opened up brick and mortar in some locations that are smaller and the way I market we have a 600-time chance of winning the market, gaining the market share, and so there's some smaller, sub-secondary markets that we can just go through so quick and I've got to dial back my marketing smaller, you know, sub-secondary markets so we can just go through so quick, right, and I gotta dial back my marketing. So I'm looking for bigger markets, older homes or bigger markets that are that are growing, expanding, and then then I'm going in there. You know, obviously in my area where I live, you know, throughout the midwest, it's natural storms every year. So it's storms are seasonal in nature, reoccurring in nature. So I'm looking for, you know, the population of the demographics to go in there on and and to be able to support the markets.

Speaker 2:

And then immediately I'm, I'm, I'm buying a location that has a utility, a flex space that I'm able to put, you know, shingles, my material, put my trailers, my trucks, you know, and immediately I'm moving in with five to 10 trucks. I'm opening it up, I'm recruiting. I've already I've been doing internet marketing at that point, that location, three months prior. You know so I'm already marinating the market. They know I'm coming, they see it. You know, most of the time we have leads coming in there, you know. So the recruiting knows we're coming there and so, um, that's how we we move. So, like, if my competitors start seeing recruiting ads, start seeing a marketing, you know they. You know they can start to. You're coming, gary's coming, they can start to. You know.

Speaker 1:

You're coming, gary's coming, he's going to be here soon.

Speaker 2:

Yes, yes.

Speaker 1:

I love that and this is, you know, it's the struggles early on and it's the benefits of size is that you can allocate resources in that direction without needing the return on investment to be so instantaneous, right. And so when you're smaller and you don't have huge budgets and you don't have the opportunity to do this, hey, all right, for three months we're going to go, like, if you're going into a market, let's just you know, in a range of that first three months from a recruiting marketing for recruiting and marketing that you're going to, that you're entering the market, what kind of range of a budget would you put on that three month period? Month period for someone who's starting up? Or for me, for you like to go in and and and like, because I like to see people, I want people to understand the, the, the differences, right, like that, that you know because it, when you actually understand marketing, as as the way that you guys do, you know you understand what it takes and sometimes it takes a lot right.

Speaker 2:

Yeah, so just on marketing, not for recruiting, just for marketing. I'm spending $20,000 a month in Denver right now and that's just. You know all things. That's OTT, that's internet, that's you know everything. But I'm going there and you know, plus recruiting budgets, plus you're buying your trucks, plus the insurance in Colorado is a lot more expensive.

Speaker 1:

So there's a big initial investment right when you're going there. But, you know, I one of my the way I like to put it, garen is if you have faith in the outcome, you'll execute. Right. So, like you guys have have created faith in the outcome through the actions that you've done through the years. So you know, man, we're going to do this and we know the outcome that we're going to get to. Now that outcome may vary, right, you've been to markets where the outcome is varied, and you know. But and I don't know if you've ever had a market that you're like, yeah, that didn't work out for us and you pulled back out of yes, I have DFW.

Speaker 2:

We went in from Tulsa down into Plano. We marketed hard, we got a lot of leads. You got to be ready. It's so big, it's so expanding, but they get so many storms that they'll wait two years or three to replace their roof. They won't go right away and and and on top of that it's you know they, those suppliers they'll sell a billion dollars a year in material and that market is so saturated. That is a broken market.

Speaker 2:

I mean, if you want to be in DFW, go retail, a hundred percent retail, and you gotta, you gotta separate yourself from the rest because there's no licenses. Anybody can be a roofer. And so, first thing, I'm a part of RCAD. I'd love to change the legislation in Texas to where you have to be licensed. You have to because there's so much. I mean, that's another state that I would like to help you know in as well like, instead of, you know, going out using these upa laws to get rid of contractors, just raise the bar for contractors, have them be licensed, have them have insurance, have them have these things, and that's going to weed out so many people, and then you'll get more quality of work, because there's so much shoddy work down there. It's just bad, but anyway, it's just with all the other markets that I'm in.

Speaker 2:

It wasn't worth the worth worth it. I mean, I'm still there, right, like we still have a presence there. We still roof there. You call them, we'll go to retail work. It's all retail, um, but it's it's, you know it's. It's a cheaper, everything's. You know you're not getting paid as much for your roof. It takes longer. They, the homeowners, have been conditioned over the years.

Speaker 1:

You mean?

Speaker 2:

so if I go with you for your roof, I don't get in this drawing for the shotgun and this trip and you're like shotgun, who's offering a shotgun and a trip? If I go for you, right, like they have stacks of flyers, you know when you go through the neighborhoods so and they've been told you know so many different things. I mean they see you coming up the driveway. They're like ha ha, we got one that's right.

Speaker 1:

Yeah, how, uh, so? So we're okay. Let's go back a little bit. We're going in, going into a market. You're going to have a budget, so you know, $60,000 for marketing for the first three months. You've got another recruiting budget, five trucks, You're renting a flex space. One of the things that I want to go into a little bit with you how much material. I think we talked about this last time on the podcast too that you buy and manage your own inventory for material right.

Speaker 2:

Yes, so we have our own warehouse and our own supply company which we buy. You know, 30 trucks at a time delivered. You know we're the second largest IKO purchaser in the country, so you know we buy them in bulk. You know IKO and CertainTeed is what we go with, and you know just, certainteed has a nice luxury line and IKO has. You know, shingles have really been been impressive and and the and their reps, the national, the reps, have been great to work with as well, because even though each market we're in, it's still a personal business. You know, and even from from the top line of dealing with. You know SRS, beacon, abc. You know, while I'm great friends with the national account sales people it's the branch down in northwest Arkansas Well, they may not be up to snuff with what so-and-so is telling them to do and how to treat. You know shamrock and that type of thing. It's kind of a good old boy network still, you know. So, which is fine, you know. But then we go in there. You know we shake their hand. Hey, this is what we do, this is how we do it, this is what to expect. But to get back to your point, yeah, we so here. You know we buy in bulk. You know, cause, it's no secret, every quarter there's a 15% raise in shingle prices. So we buy in bulk and and, and then we're able to then and we've got our own conveyor trucks or own, you know everything. So we're, you know, throughout. You know, throughout the greater metropolitan area. You know we're delivering all of our own.

Speaker 2:

And you know what happened. You know, I learned this in 2020, when shingles you couldn't get shingles and as a roofer, if you can't get shingles, you're out of business and so we just started buying them. Buying, you know, slowly, it was just a little bit, so that we'd had some if it ever got to that bad again. You know, I mean, and still, right now, everyone's on allocation. We just have orders in, so when the, the plant has them, we are already set to get so many trucks from that, because, I mean, we're still in allocation from all the storms down in, in, you know, florida, north carolina, um, and all that, so um, and then the hurricane barrel that hit houston. So there's just a lot of you know there's a lot of material going out.

Speaker 2:

I know there's a lot of of thoughts like, oh no, people are storing shingles and they're raising the prices on purpose. And I'm like, are you not like looking at what's going on in the storms? You know people are going through them like I don't, there's no plan. That's like storing shingles. If there is, then I, I, you know, surprised me, they shocked me. But yeah, um, you know it's really a supply and demand situation and, uh, that's what we're dealing with. So that's why I buy them and stock up with them.

Speaker 2:

And then you go, as as when you're in nine States and you're at 16 markets, you, you, you can't. I mean I, I, you'll be friends with all of them ABC, beacon, srs, like you know, a lot of people were like I'm not ever using ABC again because X, y, z, I'm not ever using Beacon again because of you know ABC. So, and I'm like no, you, you, you, you know, you got to play nice with all of them and and you can't be in love with just one manufacturer. And you know, and same with our Northern markets. I mean, we use them a lot of malarkey too up North.

Speaker 1:

But so, yeah, so it started as man, let's get, let's have things in stock so we can continue to work. That was the original. If I'm hearing you right, that was the original intention for buying materials in bulk, mainly shingles and things like that right? But how has that changed? Because I know a lot of contractors now that are very strategically buying their materials Maybe it's not shingles, maybe they're buying all their underlayment or their pipe boots it doesn't have to just be shingles but they're buying materials in bulk and doing inventory management more on a basis of of it's for additional profitability, right, like they're taking on. You know how has that impacted your profitability in? You know you know it started off with hey, we need to be able to work. You know how have you been able to, you know, improve or or how has it impacted your profitability now over the last few years that you've been doing it?

Speaker 2:

So it has impacted the profitability. But remember, I mean, each trailer is a quarter million dollars. You know a conveyor is a quarter million dollars. You know, and if you're buying, you know underlayment and you're felt and you know you're saving some money, that's great. But then you know you've got to make sure you got you're out there on that job and you're felt and you know you're saving some money, that's great. But then you know you've got to make sure you got you're out there on that job and you got to make sure that it's not short and you got to make sure that it's, it's there. So you, you, you, you really need to be careful about that, you know. And so, um, we there was a lot of of of learn business, learning lessons, that I that I'll call them that I that I've paid for, uh, to get here, um, and there's been some months that have not been profitable, um, from that you know. And so when you're paying for a lot of of of equipment, um, but I think you know, as people are buying underlayment, you know that's great, you know they can get their own marketing, their own, you know, personalized. You know underlayment, you know that's that's, that's great.

Speaker 2:

But you know there's, there's. There's more to it than that. You know, when I'm looking at it I'm like you know what about a box of nails? Can I, how much can I? Can I get some? You know, nails to what's? You know, if I'm getting something, I want to of it. So, and I'm putting a order together for a home. I've got it all together, you know, ready, ready to go, yeah, and so now you know we get pallets ready for each you know house that we're going out for, and then it's wrapped up and it's ready to go, shrink, wrapped and ready for for there. Ready for come, pick it up.

Speaker 1:

Right, come in, pick it up like load the trailer and you know you guys are on your way and so that's a whole nother. It's almost like you have to. It's a whole nother. Business within your business, right? Like there's a team that needs to be put in place, especially if you're doing it at scale. What were some of the key lessons you learned from that aspect?

Speaker 2:

Yeah. So starting out, I mean you're stepping over dollars to pick up pennies. Starting out, you're doing that Like, yes, you're saving some money on underlayment, yes, you're saving some money on this. But then you realize your time and that you're spending to get all the material together, to get it out. There is opportunity cost from you going out there and taking care of another homeowner, and so that was the first lesson I learned, but it was out of necessity. It was in 2020, when everything was on allocation, and it did hurt the profitability from the operational cost. Well, yet you were able to make some bump in your margin from material. You're losing out on volume.

Speaker 1:

Yep, it's a balance right, like there's always a. Everyone wants easy buttons, right, and that's what I'm trying to point out is there's not an easy button to this. But, you know, like, if you do it effectively, if you can manage your, manage inventory and your materials effectively, there's a lot of benefits to it, but you have to do it effectively. It's not just, hey, we just, you know, we a you know, we just ordered this and we're going to write the check and everything's going to be great, like, right, right.

Speaker 2:

Like, look, I just say $5,000. Well, yeah, you're going to be spending your time on that and you could have been sold two more roofs, that's right.

Speaker 1:

That's right, exactly.

Speaker 2:

All right, I'm going to talk go into?

Speaker 1:

yeah, go for it.

Speaker 2:

Oh, I was saying about the easy button. You know, that was kind of brought us up to uh, what we was talking about earlier. You know, when there's so much information out there and people want to pick your brain or have a lunch or or versus kind of digging into what's this, your 251st podcast? You know? Yeah, there's so much knowledge that you put out there already, you know, and others, that's that's free for people to listen and learn from, but they watch and listen yeah, for people listening, we're chatting offline a little bit about you know.

Speaker 1:

People will approach garen a lot about you know and have a lot of questions about you know, helping, and he's always really open to share. But it gets to a point where it's like, man, we, you know, everyone out there there is like you got to execute Right, like the way that I put it, garen, let me get your thoughts on this. Like for me, I think people spend too much time on process in the beginning. Yes, and I think that they spend too much time on process and not selling, and if you're not selling anything, you don't know how to. You won't know how to to, to, to improve your processes because there's nothing coming through Right.

Speaker 2:

I think you hit the nail on the head because every single time I hear this process, process eos, process eos I'm like. You know how many times my processes have changed as we've expanded and changed over the years, dealing with the seasonalities and the storms and the different situations that come up from life and the business changing. I mean, I'm constantly in never-ending learning processes myself.

Speaker 1:

Constant, and that's the thing what I love about EOS is it creates an environment for solving those problems on a weekly, quarterly and annual basis, right. But what it does not market itself as is the solution to your problems going away. It's just a framework to make sure you're solving your problems in a specific way, right, Like identify, discuss and solve and let's move on because there will always be another problem. And then, like you're dealing with now, you're moving to a new location, new state, new jurisdictions, new culture. You know there's, there's different cultures. Houston is a much different place culturally than Des Moines, right?

Speaker 1:

Like there's, it's a you know the Midwest, the West, going out to Denver and in different places. You know that there's always a problem to solve and you have to fall in love with solving problems because there will always be problems. So go out and create problems for yourself. That's right. How?

Speaker 2:

about that, Like how about?

Speaker 1:

that's the first thing we do in business. Is we go out and create some problems for ourselves, right?

Speaker 2:

And those problems should be.

Speaker 1:

The problem should be I've sold a job. How can I now? How can I build this job? That's the first problem, right? But the first problem is how do I sell a job? Then it's how do I build a job? Then it's how do I build a job? Then it's how do I get efficient at building a job? Then it's how do I get? You know, how do I get efficient at selling jobs? How do I get and?

Speaker 2:

it's just, it's non-stop. Yeah, it's bad things happen when you stop selling. That's bottom line. You got to keep selling and that's it because I mean it's challenging the efficiencies will come.

Speaker 2:

The efficiencies will come over time. You know, yeah, but you, you got to be selling the job. Profitable jobs like I. You know there's a lot of jobs. I say it's not a shamrock client, you know I'm not. I'm not racing to the bottom for a client. You know if someone else has a job and it's less than you know percent you know 40 profit margin have it go. Let someone else. You know percent you know 40% profit margin have it go. Let someone else. You know I'm not. You know I don't want to arm wrestle for each client Cause there's a client down the street that has, you know, two kids in soccer.

Speaker 2:

They don't. They want, they want to be dealt with. They don't want to worry about saving, you know, whatever percent of money they can just have. They know that Shamrock's there. We've been around close to 50 years. They're going to take care of it from A to Z. They can go on and live their lives. If there's a problem with the warranteeering, they can call us. We'll be out there to fix it. And so you know the race to the bottom is a loser's game.

Speaker 2:

And my advice to everyone starting up.

Speaker 1:

don't get into it Definitely. How do you like? How do you price jobs to?

Speaker 2:

maintain profitability. So you know, basically, you know there's where's my book at. I have a little book here. Steve Patrick talks about it quite a bit, but you know 40%. You know it's Markup and Overhead. I think it's called Markup and Profit, but it's 40% and so and it's, you know, I think the guy who wrote it might be 90 years old, but it rings true today. So you know, I wish I had it's. It rings true today. So, um, um, and I wish I had it, I'd pull it out real quick and show you, but it's, I think it's.

Speaker 1:

Let's mark up where I think people get, get a little off right, like, is there, like, well, why do you need 40? I, I think some people do this. They they're like man, that's kind of, maybe that's ripping a homeowner off or maybe that, like, a lot of people feel that way, I, I don't like, but what I, what are the unexpected expenses that you, that, that that you're building into that right, like this is where I think, like, like there's a lot of things that there's blind spots that people see in those margins when they're talking about you know, you're talking about your gross profit margins. People have blinders to, you know, to what goes into that right.

Speaker 2:

Well, I mean your liability if you're putting a warranty on that roof, if you're carrying that liability, for you know the craftsmanship liability, your general liability that you're paying for everything. You're paying to stay in business. That's why the average roofing contractor is out of business. In what three years? They're not out in three years, they're out, and you know, before 10. So, because they don't make it, because they don't build enough profitability in their jobs and they even talk about it in the book, really encourage it. Um, maybe we'll put it up afterwards. But, um, people think, well, I'll make it up on the next job, I'll make it up on the next job. You can't. And it's a downward spiral and then you're climbing, trying to climb out of a hole, and so you, you got to have a profitability on there, otherwise you're, you're going backwards and what's the point of all of the risks that you're taking as an entrepreneur? I mean, it's already the seventh most dangerous profession that we're in number one. No, you know so.

Speaker 1:

So get paid yeah, and and and I think there's other things. That's why you know you talk and I know you guys. You know because you're able to go into a market and market so heavy and go after hiring and you're able to make that investment in the next market or in the markets that you're in, because you have that right, because you have room for it. There's room for that, there's room for good people, there's room for paying for good people, right, like?

Speaker 2:

you gotta have.

Speaker 1:

All of that is like, is stuff that we don't look at in those margins and um, so you have your liability. You have good people, you have good marketing. You have like you. You have, then, created an environment where you can go and buy product in bulk. You've created an environment like but none of this comes from shortchanging yourself right, you're always how'd you put it?

Speaker 2:

Clean uniforms, clean job sites, clean trailers, clean, you know, equipment. Everyone's looking good, feeling good, you know, and performing good, and quality people are more expensive than non-quality people, and while I view myself as a great leader, I might not be the best manager, you know. So I have great managers that I hire and they are great at managing people. I'm good at kicking open markets, so, and great managers aren't cheap, that's right.

Speaker 1:

They're not. Let's talk about your management structure and your expansion through through. You know, as you've grown into these other states, you know you. You told me that you guys really recruit from within. You build leaders and you move to other markets with those leaders. Talk through that a little bit.

Speaker 2:

Yeah, so, you know, as we grow, we hire from within. Culture is so important. It's the glue that holds everything together and Shamrock Nation, and so we have the branch manager and training that we have that we're constantly training leaders. So we're touching on leadership skills, constantly training them so that when an opportunity arises you know, because they've been with us long enough, they know our culture, they know we're going to open a new market and so they're able to. You know, hey, hey, you know, put me in coach, I want to go open up this new market. That's, you know, two hours away. Great, you're up, boom, let's go.

Speaker 2:

And so they're able to go then be a branch manager and then start, man, you know, overseeing their crew. We start recruiting for them. They're getting, they're getting paid more. They're a manager now, which comes with a lot of responsibility, because I have a lot of liability, and so the responsibility, in the word alone, is the ability to respond. Know it's, you know they haven't earned their dues yet. They how do I know? This guy Especially retreads in the roofing business, right?

Speaker 1:

Yeah, it's it, that's a, that's a big thing. So your culture is kind of filtering people. They're like, well, we got it, you got it. And so to put someone in a manager position and have people read like that's a, that's a tough one. What makes, what makes a great branch manager for you guys? What are some of the traits? What are the outcomes that they're producing? What makes a great branch manager? What?

Speaker 2:

are their personality.

Speaker 1:

What's their personality Like? What is what do you? How do you know, man, this person's going to be it right.

Speaker 2:

It's consistency, it's loyalty, it's not prima donna, it's giving a servant leader mindset. It's somebody who puts others above themselves to see them rise. And so when they're staying late, to help a new guy learn, to make the process, to put his orders in right so that he can make a good commission and he can really get into this job. Because you know, once people become a roofer, they're roofers for life. I mean, they love it and they stay in it. But if they don't get in it and they don't start making their commissions and they're not getting paid, then it's not for them. And so a servant leader's heart that's going to be helping others grow. That's what I look for, and consistency, yeah.

Speaker 1:

So that's the. You're looking for leadership, not management in a way. Right, like I think that I mean they manage people, but they have a that you guys have had in in in many markets, because it's not the person that's going there has that man. They, they're, it's intentional, it sounds like they're really there and they have a, that servant leadership mindset to really grow. Um, as you know, as as you're, as you're not every market in your area. You know cause you said what'd you call it? The? The sham shamrock nation, right?

Speaker 1:

You're very heavy heavy in in more like, like the Midwest and things like that. Not every market has the same activity every year. How are you? You know, are you able to, to take some of the team from Omaha and and shoot them over to? You know they cruise over to Des Moines or what. You know what's the? You know how does the, the, how does the ecosystem work from a, from a, from a macro level to assist in? You know, when there is the, the, when bigger opportunities arise in the markets that you're in, yeah, great question.

Speaker 2:

So you know, throughout the heartland and South Central where we're at. I mean there's storms seasonally but if, say, a storm hits northwest Arkansas, we're able to swarm it from. You know, bringing the St Louis guys, some Kansas City guys shifting Tulsa over, bringing Little Rock up and hitting it hard, and so that's how we're able to do that. That's one way. The other way is we've implemented, we have a repair program and the roof rejuvenations so that we're consistently selling repairs. I mean, we're brick and mortar in each place, so we're not really storm chase, we're not. We're not storm chasers if we, we are just located in storm alley.

Speaker 2:

So we are the largest storm catchers met in the nation, that's for sure. So shamrock nation is the largest storm catchers met in the nation, that's for sure. So Shamrock Nation is the largest stormcatcher's mitt in the nation. But we're brick and mortar and we're there to do repairs and roof rejuvenations and as well. So but with that opportunity, from having so many locations, you know we have a lot of young bucks that are willing to like hey, you know, put me in, coach, let's go down, I'm ready to go down to OKC, all right, well, let's go. And so you know we will, we'll put them up and, and then they're there for for until they're ready to go back.

Speaker 1:

Do you do that Like it's like, do you just kind of put the word out to other branches? Hey, that you know big, you know we got a big opportunity down in this market right now. Is anyone interested in going? Is that just as simple as that?

Speaker 2:

Yeah, it's as simple as that and they make a work trip out of it. Usually we get an Airbnb and a couple of them and the guys are on their way down, or gals. We have a lot of gals that are doing really, really great in the industry Um, I love it, and um, and, and they're, they're on their way down and they're, they're, they're, they're, they're there for, for work and um, but uh, then they go back.

Speaker 1:

The uh, one of the things that I hear from you from a marketing perspective. You guys do a lot of marketing, how you know. I feel like, especially in storm markets, a lot of times sales reps get attached to the next door and they just focus on the next door. But when that phone call comes in and sometimes it's across town, right, and that rep doesn't like leaving that little honey hole that they're in knocking doors to get across town you know how do you balance that and how do you not create? I guess another side of it is how do you not create lead babies out of you know, because of the marketing push that you're doing, that they're still, that your reps are still like in it and active and you know, going after business.

Speaker 2:

Yeah, that's a that's a million dollar question right there, and one that I've had to balance out, because we do. We have the lead babies that that are, that are great at leads, and then you have the guys that they'll like turn me off leads I don't even want leads and they want to be out there and and that's okay. But I, even with that said, I don't take lead babies, unless and if they are, then they're just a W2 employee and and. But what I would do is I reward the people who are out there in the field hustling with the leads. So if they hit a dry spot, you know you knock so much doors, right, so you're going to hit the subdivision, you hit the cul-de-sac, you got the six-pack. But then you know then they're like, okay, here's another lead. They find another area Because they were working it so hard, here's another lead. So we do play favorites.

Speaker 1:

If you're hustling, we're going to reward you with positive behavior. I love that because I think that there shouldn't be equality in lead distribution. Right, yeah, like, why would you give, especially when you're spending marketing dollars? Right, when you're investing a lot of money in marketing and you're giving it to your worst closer man, like you're, what are you doing there? Right, like, you know, like you gotta be, you know, the people that are executing on a high level should have priority in some of these things.

Speaker 2:

Man, I'm with you there, cause yeah, we're results driven organization that want to take care of our homeowners at the best possible way. So we continue to keep our ratings um and our service of what we do. And you know, I, I, I subscribe to a Jack Welch uh philosophy. Like I'll cut the 20% right out the gate, like look, if you're not keeping up with the top, you're gone, you're off the team. I don't want you dragging my top people down, and they will. They'll drag you down, but the guys because the guys will try to lift them up, keep lifting them up, but just leverage in natural will pull them down. So if they're not out there, they're just on the team to be part of, just to be a shamrock, or to come hang out to get the free pizza, to get the free breakfast we have at Saturday sales meetings and all that jazz. Like I'm not having it. Like go find someplace else. Yeah, I'll refer you to the roofer down the street.

Speaker 1:

So it sounds like standards are the answer. Standards right Like standards sounds like an answer to me to. To kind of summarize what you said there, like having standards and holding people to them is a great way. I want to kind of finalize this out with with the. You know you've been in the business for a long time, you've seen a lot of things, you've had your own struggles and and know your peaks and valleys and things like that. What changes do you see coming in the industry and how are you adapting to those changes?

Speaker 2:

So you know, traditionally being in the Hale-Swath area, I'm seeing a big insurance shift. So we're doing a lot more retail, definitely presenting financing options right out the gate, and that's one thing. And I'm also seeing a lot of of a lot of older roofing, older roofers, older getting out of the business, um, and a lot of you know these, these new startups, young bucks, getting in kind of rebel, without a clues type. You know they, they, they, they. It's gold rush. You know the roofer rush, you know that that. That, see it, they want to get in.

Speaker 2:

They don't really know what they're doing, they're fast talkers and uh, so I'm, so I'm seeing that shift. You've got this dichotomy of the older, quality, slow-talking roofers that will just get to you if we get to you We'll see how the day goes versus these guys that are spinning around in circles and will not get there. So I'm seeing that in the business landscape and then in the insurance landscape, um, and then the insurance landscape, I see it turning more retail and financing, uh, leading, leading the way there how are you guys?

Speaker 1:

how, what's your? What's your thoughts on adapting to all of the changes that are happening?

Speaker 2:

you know, um, we're just, we're just, we're just doing Shamrock nation way. It's blue, blue ocean strategy, is, is, is my philosophy and we're going to continue to grow as we grow. We're going to train as we train. You know, I used to say, if it's raining, we're training. Now, we train every day. Um, we're constantly training and we're constantly recruiting and we're bringing in quality guys. I'm bringing a lot of these. You know we talked about the gold rush guys that want to get in and start their own business. They realize that they can make more money being a project manager for a good company. So we're seeing that a lot coming on. Just, they can make more money running jobs. So that's how Shamrock is doing it, running jobs. So that's how Shamrock is doing it. We're just being the stable, sure-footed, tried and true, you know, player in the game and just stable, just steady as it goes. That's how we're handling it.

Speaker 1:

That's awesome, man Garen. It's been a pleasure. This has been another episode of the Roofing Success Podcast. Thank you for tuning into the Roofing Success Podcast. For more valuable content, visit roofingsuccesspodcastcom While there, check out our sponsors for exclusive offers, shop for merchandise and sign up for our newsletter for industry updates and tips. Also join the Roofing Success Facebook group to connect with other professionals and stay updated on the latest trends. If you enjoyed this episode, please subscribe, like, share and leave a comment. Your support helps us continue to bring you top industry insights. The website link is in the description. Thanks for listening.

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