Big Business - Tight Returnssmart_display

This roofing company is listed at $5.5M, generating about $1.31M in cash flow on roughly $11M in revenue.

At first glance, that looks like a massive, high-performing business.

But once you run the numbers, the story changes.

Deal Snapshot

Let’s run it through a standard SBA-style scenario.

Financing Overview

After debt, you’re left with about $500K per year.

That sounds like a lot — until you realize you paid $5.5M to get it.

Where It Breaks

This deal has two major problems.

• Low margin: 11.9% vs ~22.8% industry average.
• Overpriced: 4.2x vs ~2.2x typical multiple.

You’re paying a premium… for below-average performance.

The Scale Trap

This is where buyers get fooled.

They see $1.3M in cash flow and assume it’s a great deal.

But scale doesn’t equal efficiency.

• More revenue doesn’t mean better margins.
• Bigger teams increase complexity.
• Higher overhead eats into profits.
• Thin margins amplify risk at scale.

This business is big — but not efficient.

What You're Really Buying

A large operation with tight economics.

• 22 employees
• Complex operations
• Thin margin buffer
• High execution risk

At this size, small issues become big problems fast.

Industry Reality

Roofing isn’t a low-risk space either.

• Default rate: ~4.8% vs ~3.6% average.
• Project variability: Jobs fluctuate.
• Cost pressure: Labor and materials shift quickly.

Thin margins make all of that worse.

What This Really Is

This is a big business priced like a top-tier operator… without top-tier performance.

• Strong revenue
• Weak efficiency
• High valuation

That combination rarely works out well for buyers.

BizHub Verdict

This deal scores a 4.9 / 10.

Not because roofing is bad — but because you’re paying top dollar for below-average economics.

Big numbers… small margin for error.

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