Key Considerations to Make When Investing in Sheet Metal Shops or Portable Roll Formers

MCS Influencer Randy Chaffee says contractors looking to expand their business should consider starting a sheet metal shop or investing in portable roll formers.

Editor's note: The following is a transcript of an interview between our COO, Karen Edwards, and Owner of Source One Marketing, Randy Chaffee.  You can listen to the interview or read the transcript below.

Karen Edwards: Hello everyone, this is Karen Edwards with MetalCoffeeShop and I am here today with Randy Chaffee. Welcome, Randy.

Randy Chaffee: Hey Karen, how are you?

Karen Edwards: Good. Hey, we're here to talk about our June, our influencer topic for MetalCoffeeShop. And the question this month, is when should contractors consider starting a sheet metal shop or investing in portable roll formers?

Randy Chaffee: Isn't that a great question? And I'm sure that's one, Karen, that any contractor out there, at some point in their life are going to, if they haven't already, that's going to sit there one day at the coffee table and going to go, "Should I do this or not?" And I've found that in my opinion as to answer your question about when they should, there's two avenues. There's the shop itself.

Are they going to make the relatively large investment in buildings, roll forming equipment, vendors, inventory, all the ancillary products? That's a pretty hefty go-to. Or are they going to do typically the standing steam portable units to take out to the job sites, which is an investment, but certainly nowhere on the level of opening up a full shop. I think both of them are separate, but the same, as far as how much business are you really doing today?

Are you fully in metal, and is that your only go-to and is it all either a standing seam or a fastened through system? And it's not metal shingles, it's not any of the other products that are bought out. If you're buying a product that you could truly manufacture and you're 100% in, I think that makes it less of a no-brainer, than if you are playing, use the term I guess in the metal world. It's just one of many things.

I'll sell metal. I'll sell standing seam if they want it. I'll sell some fastened too, or a stone coated or a painted shingle. But I also do shingles and I do all these other roofs, and it's just a part of what I do. If it's a part of what you do, my opinion would be, you really need to stay with the guys that are doing it right, and buy them from the folks that have the inventory, they have the coil, they have all the ancillary products, the fasteners, the closers, the vent material, because that's a huge investment for part timing it, if that makes sense.

Now, if you're really in the business and you want to be in the business, I think especially in the standing seam world, those machines out there, the equipment out there is reasonably priced in today's economy. It's not crazy numbers to get started. And you can control your own destiny. You can control your own timeframe, probably some additional profits to be made. The question you have to ask yourself still, even with that is, "Am I doing enough?" And this is going to be math. You're going to sit down and do some basic math.

Am I doing enough business to pay off this machine and whatever timeframe I feel like I want to pay it off in? And you also have to consider all the coil costs. You've got to buy coil. Do you have a good place to buy coil? Do you have to buy inventory and stock it, or do you have a source which you can get it on of a job to job basis?

What about all the ancillary products? Fasteners, cocks, butyl tapes, closure material, vent material? Is that make sense to bring all that in in quantities, not knowing exactly what colors they're going to sell, all those things. And then you have to manage all that dollars, all that inventory, or is it still better to just go ahead and buy those jobs from a shop that's already in existence?

So I think it really comes down to if you're really in the business, Karen, and you want to be in the business long term, I think there's some great opportunities out there for you to not expand your marketplace if you can go job to job and roll the material on the job site. I think that's something that can be a nice business for somebody that's serious. And I think that's my keyword is, please don't invest in that unless you're serious, just because I got a job or two. And I think that'll be fun to do.

There's a lot more involved in is what we just talked about with the inventory. And if something goes awry, that coil is now yours to deal with, with the coil company. That's not just go back to your roll form and say, "Hey, I don't know. I got some bad panel. You need to replace it." So those are all things that just come into play. Certainly they should do if you check off all the items on your list.

Karen Edwards: Wow, lots to think about.

Randy Chaffee: It is. I know.

Karen Edwards: I will say that from time to time we get used roll formers. They show up on our classified ad on MetalCoffeeShop. So that might be a consideration too.

Randy Chaffee: I think that's a great way to go. Because why not if you're starting out. Why not start with some of that good used equipment? Because many times it doesn't mean it's bad equipment. It's just that guys are starting out at a, what's called an entry level equipment to get their feet wet, to get started, is what they can handle at the time, and then they've outgrown it, or they have some needs for some maybe higher end equipment.

So it doesn't mean that it's bad equipment, it's just maybe wore out as use for that particular contractor. And that's a great way to go Karen and I know on your site there's equipment available all the time.

So I think it's a great route to go. Just think about it and think about the alternatives or the ancillary things that come into play before you just make the leap is all.

Karen Edwards: Good advice. Good information. And as always, thank you for sharing your wisdom with those folks who are coming to our site to learn more about metal and get information. And we'll be here again next month. I don't know what the topic is off the top of my head, but it's going to be about metal.

Randy Chaffee: Whatever it is, we'll talk about it.

Karen Edwards: All right. Thank you, Randy.

Randy Chaffee: Thank you Karen.

Karen Edwards: It was great to see you.

Randy Chaffee: Always. Good.

Karen Edwards: Bye-bye.

Randy Chaffee: Cheers.

Karen Edwards: Bye.