Roofing Subcontractor Model: $10M With Few Employees
- Runs $10M lean: Chris Kane's 303 Roofer does just over $10 million a year with crews, sales reps and project managers all on 1099 contracts.
- The tradeoff is valuation: A subcontractor model lowers the sale price but cuts the owner's stress and daily involvement.
- Scale by adding subs: With fulfillment subcontracted, you can sell more without a crew bottleneck, up to the point the model starts to break.
Most roofing owners scale by adding payroll. Chris Kane went the other way. On the Roofing CEO Podcast, the owner of 303 Roofer in Denver explained how he built a roofing subcontractor model that runs just over $10 million a year with almost no employees. He is a single-member LLC, and his project managers, salespeople and crews are all on 1099 contracts.
The structure keeps him light when work slows and lets him add crews fast when storms hit. It also costs him something real on the day he decides to sell. Here is how the model works, what it gives him, and the number where he says he will have to rethink it.
What Is the Roofing Subcontractor Model?
The roofing subcontractor model keeps the owner's core team small and pushes fulfillment to crews on 1099 contracts instead of W-2 payroll. Chris Kane runs 303 Roofer this way end to end.
He keeps about six subcontractors who each run multiple crews, with another six to ten crews he can call on when the work shows up. When there is no work, he is not paying anyone. When the jobs come in, he has the capacity to take them. That single choice, where the labor sits, shapes everything else about how the company runs.
Why Chris Kane Went Back to Subcontractors After COVID
He did not start with this model on purpose. He landed back on it after the company had already tried the opposite.
The early years and the move to employees
When 303 Roofer first started, Kane subcontracted everything, which is how a lot of owners test whether the business even works before they take on fixed cost. As the company grew, he added employees, trucks and office space, and ran it that way for years.
The COVID shutdown that reset the structure
Then 2020 hit, and he braced for the end.
He brought everything in-house and waited. Instead of collapsing, the business took off, and it has climbed every year since. Because the team had already adjusted to working from home, and because customers never came to the office or the showroom anyway, he never rebuilt the old overhead. He kept the lean version. The office was gone, the fixed payroll was gone, and the subcontractor network carried the work.
How a Lean Model Lets You Scale Roofing Sales Without a Bottleneck
Because the crews are subcontracted, sales volume is not capped by how many roofers are on staff. If demand rises, Kane adds subs rather than hiring, so the fulfillment side flexes with the work.
He is honest that it can cost more per job than running your own crews. The payoff is that he never carries idle labor. When he had employees, keeping everyone busy was a constant worry, and paying people who had no jobs to run was on him, not them. The subcontractor setup removes that pressure. He also points out this is not all-or-nothing: most owners he has talked to who do run employees still lean on subs, usually landing somewhere around 40 to 60 percent employees with the rest subcontracted.
The math on volume is simple once fulfillment is elastic. An average residential roof runs 15 to 20 thousand dollars, while a commercial job runs one to 2.5 million. One apartment-complex re-roof last year came in at two million and took 45 days. So a million dollars in a month can mean roughly 50 residential roofs or a single commercial project, and the subcontractor bench can absorb either without Kane hiring a soul.
What the Subcontractor Model Costs You in Company Valuation
The clear cost is the exit number. A company that leans on 1099 crews instead of employees is worth less to a buyer than the same revenue built on a payroll and systems a new owner can step into.
Kane brought in a consultant last year to look at exactly this: how the company was structured, what it was worth, and whether it was positioned to sell. The conclusion was that he is better off running it the way it is than rebuilding around employees to dress it up for a sale.
Why the tradeoff works for him
The reason the math lands differently for him is that selling is not the plan.
He is thinking on a 20-year horizon. He takes a lot out of the business now, and he would rather keep that cash flow and his time than chase a higher multiple he has no intention of collecting. For an owner who does plan to sell, the calculus flips, and the valuation hit becomes the reason to build with employees instead.
When to Reevaluate the Model: Bending vs Breaking
Kane does not pick a revenue target so much as watch for strain. His test is whether the company is still bending or getting close to breaking.
At just over 10 million, he figures he is about halfway to the point where the structure needs a real rethink. Past 20 million, from owners he has talked to in other industries, the business needs far more structure than a lean 1099 setup provides. So the plan is to run as-is to roughly 15 million, then decide whether to bring in people who know how to operate at the next level.
Two things could push him there faster. One is door-to-door: 303 Roofer just started knocking for the first time in its history, and he has been told it can grow the company fast. The other is his close rate.
A big part of that comes from a cash-price approach. More homeowners now want a price without routing everything through an insurance claim, so Kane quotes the job directly, prices under what insurance would pay, and lets the customer decide whether to involve their carrier. And because Colorado hail is unpredictable, with big storms in 2017, a long dry stretch through 2022, and little in 2025, he treats storm work as gravy rather than the thing the company depends on.
How to Run a Lean Roofing Company on Subcontractors
Use Kane's model as a template:
- Start subcontracted to test the business. Before you take on trucks, payroll and office space, prove the work is there with crews on 1099 contracts.
- Build a deep sub bench. Keep a core of subcontractors who each run multiple crews, plus more you can call on, so capacity flexes with demand.
- Keep overhead off your books. Cut fixed cost you do not need, from office space to idle staff, so a slow month does not bleed you.
- Decide your exit first. If you plan to sell, build with employees for valuation. If you plan to hold, a lean model protects cash flow and your time.
- Watch for bending vs breaking. Track the revenue point where the structure starts to strain, and bring in operators before it snaps, not after.
Frequently Asked Questions
What is the roofing subcontractor model?
It is a structure where the roofing owner keeps a small core team and uses crews on 1099 contracts instead of W-2 employees for fulfillment. Chris Kane runs 303 Roofer as a single-member LLC with project managers, salespeople and crews all on 1099. The owner stays light on fixed cost and scales capacity by adding subs rather than hiring.
Does subcontracting lower a roofing company's valuation?
Yes. Kane is direct that the model lowers what the business sells for, because a buyer pays more for revenue built on employees and systems they can step into than for a network of 1099 crews. He accepts the lower multiple because his plan is to hold the company, not sell it, so he keeps the cash flow and the lower stress instead.
How many subcontractors do you need to run a $10M roofing company?
Kane runs just over $10 million with about six subcontractors who each manage multiple crews, plus another six to ten crews he can pull in when work spikes. The point is not a fixed headcount but a deep enough bench that fulfillment can flex up fast without carrying idle labor during slow stretches.
Can you scale roofing sales without hiring your own crews?
Yes, and that is the main advantage of the model. Because fulfillment is subcontracted, sales volume is not capped by staff roofers. Kane can sell more and add subs to cover it, so the bottleneck most owners hit at the crew level largely disappears. The limit becomes management capacity, not labor.
When should a roofing owner switch from subcontractors to employees?
Watch for strain rather than a fixed number. Kane plans to run lean to about $15 million, then reassess, and expects a business past $20 million to need far more structure. If your exit plan is to sell, build with employees sooner, since the valuation gap is the clearest cost of staying lean.
Conclusion
Chris Kane built a roofing company that clears $10 million a year without the payroll, trucks and office most owners assume they need. The subcontractor model costs him on the day he would sell, but he is not selling, so what he gets instead is cash flow, flexibility and a lot less stress.
The real lesson is not that every owner should copy his structure. It is that he decided what he wanted from the business first, then built the model to match, and he knows the exact signs that will tell him when it is time to change.
