How to Survive When Half the Industry Fails
- Half the industry at risk: J.D. De La Rosa expects another 50% of the industry to go under when the current rush of accounts runs out.
- Top heavy sinks companies: Warehouses, payroll, trucks and insurance only make sense at peak volume, and cash flow cannot carry them through a dip.
- Prepare years ahead: Roofio began preparing for the solar shift four or five years before it arrived, and added roofing because customers kept asking.
Knowing how to survive when half the industry fails has become a basic requirement for anyone running a door to door or home services business. J.D. De La Rosa has been in the space since 2005, starting with First Line Security, later running his own alarm company, and founding Roofio in 2017. He has watched full cycles turn, and he expects another round of fallout once the current rush of accounts dries up.
On the D2D Podcast with Sam Taggart, he explained what separates the companies that fold from the ones still trading. It comes down to how much fixed cost they carry, how early they start preparing, how willing they are to change what they sell, and who they know when things get difficult.
Why Half the Industry Fails When the Market Shifts
Companies fail in a shift because they build for the conditions in front of them and have nothing ready for the conditions that follow. De La Rosa expects that pattern to repeat as the current rush of accounts comes to an end.
His point is not that the selling is wrong. Taking in as many accounts as possible before a deadline is rational. The problem is that a deadline is a finish line, and plenty of owners have no plan for the morning after it.
Revenue earned on urgency looks identical on a bank statement to revenue earned from a durable model, right up until it stops. He has seen the same sequence before, when money was cheap and solar was easy to finance.
With interest rates at 0%, he says, it was like selling candy to a baby, and a correction was always going to come. When rates went up and the solar deals became harder to pencil, that correction arrived. The companies that collapsed first were not the small ones.
What "Too Top Heavy" Means for a Home Services Business
Top heavy means carrying fixed assets and fixed payroll that only make sense at peak sales volume. De La Rosa applies the term to the companies that grew their overheads daily while the market was generous.
He was consulting with some of those businesses at the time, and he told them plainly what was coming. When sales dipped, he warned, they would be upside down. They would fall over. They were too top heavy to end up anywhere else.
Some listened and some did not. When interest rates moved, the heaviest books went over first. As he describes it, there was not enough cash flow at that point to support all the assets those companies had been growing into, and the lending had changed from what it had been.
The lesson for an owner is narrow and usable. Before you take on a warehouse, a truck fleet or another salaried layer, work out how far sales would have to fall before that cost becomes a threat. If that dip looks like a normal year, the cost is too heavy.
How to Prepare for a Market Shift Before It Hits
Preparation starts years before the shift, not on the day it lands. De La Rosa says Roofio began preparing about four or five years ago, working from the plain assumption that no market rises forever. He knew a shift in solar was coming, because like Bitcoin it was never going to go up all the time. It had to correct itself.
That assumption carries most of the weight. It does not ask you to predict a date. It only asks you to accept that current conditions are temporary, then build accordingly: lighter cost, more than one way to earn, and a process strong enough that other people want to send you their work.
Roofio runs as an EPC. It takes the front end sale, usually working with dealers, then processes the account through to install completion, PTO and customer service. People often assume it is a software company. It is not. The reason partners bring their accounts to Roofio, De La Rosa says, is simply that the company is so good at the process of the account and takes care of their customers.
It is the kind of preparation a market shift cannot take away from you.
Should You Add a Second Service Line to Your Business?
Add a second line when your existing customers keep asking for it. Roofio did not touch roofing for the first two or three years, despite having it in the name. De La Rosa tells it as a back and forth: customers kept asking whether the company did roofs, the company kept insisting that they did roofs, and eventually it gave in and started doing roofs.
The name came from roof plus IO, the power symbol, giving roof power. De La Rosa believes solar and roofing will eventually marry each other and consolidate into a single product, so that a new roof simply arrives with solar in it.
No such product exists yet at a price a homeowner would accept, and it might take a year, five years or ten. In the meantime he is watching creative financing come to the table, along with battery products, and further out he expects peer to peer energy sharing settled through blockchain smart contracts, which he puts roughly five to ten years away.
A changed product means a changed sale, and he is relaxed about that part of it. Sales, he says, is a transfer of emotion. If a rep is happy and confident about the product, the customer will buy it no matter what.
How Relationships Build a Business That Lasts
Relationships are the part of a business that no policy change or interest rate can price out. De La Rosa is a founding partner of Services Summit, an event in Austin on November 4th and 5th that brings home services companies together, with all net proceeds going to the American Children's Cancer Organization, a nonprofit that has been running for 50 years.
What surprised him after the first event was what happened in the gaps between sessions. Ben Ward, one of the executive founders of Services Summit and a protege of Brian Tracy, met Joe at last year's summit, and both ended up speaking at the event. A conversation in the conference lobby about whether Brian Tracy could come out to Solar Con ended with Brian Tracy at Solar Con, collecting an award for his expertise in the sales industry.
De La Rosa's advice on how to make that happen for yourself is specific, and it is not about collecting contacts. Showing up is only half of it. The other half is asking what you can do for the other person, and how you can serve them today. That, he says, is where the connections are really made.
Most people turn up asking to be given something, he notes, but the ones who show up and ask how they can help are the ones who see value returned to them tenfold.
For an owner trying to last through a bad cycle, that network is practical infrastructure. It is where the next partner, the next product and the next route around a roadblock tend to come from.
What 20 Years in Door to Door Teaches You About Staying Power
Staying power comes from treating every phase as a stage rather than a destination. De La Rosa started knocking doors in 2005 in Long Island, New York, then ran the number one office during First Line's campus recruiting project, which ran like a reality TV show and filled offices within days.
First Line later fell upside down. He moved to Pinnacle, then started Vault Security out of DFW and ran it for four or five years. After that he spent a year learning the operational side of solar with a partner that did not work out the way he had been told it would. Roofio followed in 2017.
Several of those endings were outside his control. What carried across was the willingness to start the next thing with better information than he had the last time.
The purpose behind the work became clear later. His daughter was diagnosed at two years old with a cancerous brain tumour. Surgeons removed 98% of it, chemotherapy ran for about two years, and she beat it. Four years of scans since have shown no growth in the small amount left. Going through it, he resolved that he would get through this and then do what he could to help and give back.
Asked what he would tell the first year version of himself, his answer was not tactical.
How to Build a Door to Door Business That Survives the Next Shift
Work through these in order, and revisit them each time the market gives you an easy year:
- Price your overheads against a downturn. Before adding a warehouse, vehicles or salaried staff, work out the sales drop that makes each one unaffordable. If that drop looks ordinary, do not take the cost on.
- Assume the current conditions end. You do not need to forecast the date. Build on the basis that nothing goes up all the time and the market has to correct itself.
- Start preparing four or five years out. Roofio began preparing for the solar shift long before the policy changes arrived, which is why the changes were an adjustment rather than an emergency.
- Add the service your customers keep asking for. Let demand pick your second line for you, as roofing picked itself for Roofio.
- Be excellent at the process, not just the sale. Partners bring accounts to the company that looks after their customers through to completion and beyond.
- Show up and ask how you can serve. Go to the events, then lead with what you can do for the other person rather than what you need from them.
Frequently Asked Questions
Why do so many solar and roofing companies fail after a boom?
Because they build for boom conditions and have nothing ready for what comes next. De La Rosa expects another 50% of the industry to go under as companies take in as many accounts as possible ahead of a deadline, then find themselves unprepared when that deadline passes and the easy volume disappears.
What does it mean for a company to be too top heavy?
Top heavy describes a business carrying assets and payroll that only work at peak sales. De La Rosa points to warehouses, W2 employees with hundreds of thousands on payroll, trucks and truck insurance. When sales dip, cash flow cannot support those assets and the company falls over, which is exactly what he warned consulting clients about.
How early should an owner prepare for a market shift?
Roofio started preparing about four or five years before the solar shift arrived. The trigger was not a forecast but an assumption: like Bitcoin, the market was never going to go up all the time, so a correction had to come. That assumption is available to any owner at any point in a cycle.
Is it worth adding roofing to a solar company?
Roofio did not offer roofing for its first two or three years, and only added it because customers kept asking. De La Rosa expects solar and roofing to consolidate into a single product eventually, where a new roof comes with solar built in, though he notes no cost effective version exists for homeowners yet.
How do business owners get real value out of industry events?
By serving before asking. De La Rosa says showing up is only half of it, and that the connections get made when you ask how you can help the other person. He points to a lobby conversation at Services Summit that ended with Brian Tracy speaking at Solar Con as proof of what a handshake can turn into.
What advice would J.D. De La Rosa give a first year rep?
That it is all going to be okay. He would tell his younger self to look past the immediate need to make money and treat the work as a way of bettering himself, learning, and trusting that there is a next level coming. Twenty years on, he is still in the industry.
Conclusion
An industry where roughly half the companies can disappear in a cycle rewards a specific kind of owner. Not the fastest grower, but the one who keeps costs light enough to survive a bad quarter, assumes the good conditions are temporary, lets customer demand guide the next service line, and builds a network that opens doors when the market closes them.
De La Rosa has done this across security, solar and roofing since 2005, through buyouts that did not happen and partnerships that did not work. The through line is simple: prepare early, serve first, and keep going.
