# What do you think about sign allowances?



## Veronica

Here in Texas sign allowances are against the law. Is that true elsewhere? In Texas many companies still do it as most home owners don't know this. The issue is it puts those companies who don't do it at a disadvantage. What do you think about them. Are they are a good thing? Do you offer them? Do they work?


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## tinner666

Just a dumb roofer here. What are you talking about? The size of the sign on the trucks?


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## Roofmaster417

Veronica said:


> Here in Texas sign allowances are against the law. Is that true elsewhere? In Texas many companies still do it as most home owners don't know this. The issue is it puts those companies who don't do it at a disadvantage. What do you think about them. Are they are a good thing? Do you offer them? Do they work?


Are you talking about taking $250-$500 or more from the deductible and playing it off as sign placement in the yard with the companies company sign?


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## Grumpy

I will place my sign on their lawn the day they sign the contract and I will do it for free and if they complain I will NOT give them a penny, I will simply remove my sign. 

I think sotrm chasers in general should DIAF and take their sign allowances with them.


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## Veronica

Yes I'm talking about the money from the deductible for having your sign in the yard. It's insurance fraud.


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## Grumpy

Veronica said:


> Yes I'm talking about the money from the deductible for having your sign in the yard. It's insurance fraud.


Yes it is, although no it's actually a sneaky loop hole. I know Ed posted something that it's not allowed in some areas.


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## dougger222

I hear of stormers doing it all the time here in MN. I don't have any signs anymore so don't offer that program...


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## Roofmaster417

Thats funny Dougger,,,I have had ALL my signs stolen by other roofing companies.


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## Grumpy

The only signs I steal are the ones that say "free roof" and only if they are palced somewhere on public property, obvious sign spam. I have never taken a sign from someones lawn.


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## Grumpy

I get mine cheap from CertainTeed and I kind of expect them to be stolen so I don't mind. If the sign lasts 2-3 jobs I got my money's worth.


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## larryb

dougger222 said:


> I hear of stormers doing it all the time here in MN. I don't have any signs anymore so don't offer that program...


MN recently passed a law that prohibits "sign discounts" and variations. This includes the slippery practice of having the HO sign a separate "advertising" contract that says the contractor will "pay" the HO a certain fee (close or matching deductible) for sign placement. 

So, HO does so anyway in order to get deductible paid and eventually receives the following letter...

"Dear Mr. and Mrs. HO, We understand that you recently received a "betterment" in the amount of $xxxx.xx but we have not received a MISC 1099 copy from your contractor or you. Please provide MISC 1099 along with your tax payment on that income by...

Sincerely,

Internal Revenue Service"

Compete on quality of service, not how much are you willing to give up in profit by paying their deductibles. Doesn't matter if other contractors do it. Never had to buy down a deductible and never will - don't have to.

The money one invests in learning how to get the jobs (many) without paying HO deductibles is miniscule when compared to the additional profits one will earn from getting the jobs at top dollar based on experience, quality of service, salesmanship, etc.

If an HO demands I pay their deductible if I want to get the job, I remind them that having their contractor pay deductible is a betterment to them (income) and they need to be aware of potential consequences. They may not be concerned with their ins co finding out but guaranteed they don't want a letter from the IRS. That usually gets them past the deductible issue.


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## Acubis

*A way around it*

If your customer wants a sign allowance or you feel like you need to give one there is a legal way to do it.

You have to write a separate contract to lease advertising space in their yard for a predetermined amount of time.

www.researchroofing.com


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## DFWRoofing

What is most important in determining if a sign allowance is legitimate is "what is the fair market value" of the the sign allowance.

How much are other businesses and trades offering to put a yard sign in your lawn? The reality is few trades or legitimate companies are offering real dollars for a no strings attached sign rental. The real value of a sign allowance can not be one that is contingent on you buying a roof. 

If a small bill board leases for $1,000.00 what is the value of a yard sign that will reach less than 1% of the same people? 

While there is nothing wrong with a sign allowance, there is a lot wrong with the made up numbers given to the transaction. 

A separate contract with very specific terms is meaningless if those terms do not reflect a fair market value that is completely independent of a roof purchase.


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## JWRoofing

People who are trying to skirt their insurance deductible are just like those who want jobs done without pulling permits. They can find another roofer as far as I am concerned. Unethical customers will become problem customers. I figure if they are willing to scam their insurance company to save a few hundred dollars for their roof then they are just as likely to scam you.

JW Roofing
______________
Miami Lakes Roofing
Bal Harbour Roofing
Miami Ozone Treatment


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## tbookman

*Sign allowances/advertising discounts!?*


I previously owned my own business in a non-construction industry. When the economy put my business in the tank, the VP of a local roofing contractor asked me to consider joining their team as a project manager. I knew this man from a BNI group and trusted him. 

So, please bear in mind that I became a project manager only last May and did so with no background in the roofing industry.

When I had my roof replaced 3 years ago, the roofer just came out and told me he would pay my deductible of $1000. I never asked for it, and they never asked about putting a sign in my yard. I had never had a roof replaced before so didn't know if that was right/wrong; standard operating procedure or not.

When I started working for the company I am with now, they told me that they offer $500 advertising discounts for a sign in the yard. Many clients ask me for this, and many who have a $1000 deductible want me to absorb the whole cost. 

Honestly, reading this post is the first I've heard that there could be anything illegal or unethical about doing this. I always assumed that it is the business owner's prerogative on whether or not to cut his profit by $500 or $1000. I never knew that this potentially could be counted as income by the IRS.

Is that really true?

Lesson learned - I should have had my eyes wide open when I went into this. :blink:

But, now I've sold almost 30 roofing projects...

What can I do moving forward? How do I compete in a very tough market? What should I do? 

Thanks for any help!


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## kblh1964

*Sign Allowances*

Missouri just passed a bill that states a contractor cannot offer a homeowner a discount or coupon towards a customers deductible .
Also a exterior contractor cannot represent or negotiate with a insurance company on behalf of the homeowner .
Which means all suppiments need approval before work is ever started.

As for me I do not give discounts for sign allowances or get asked .
I do ask to put a sign there to get rid of the door knockers.
If a homeowner cannot pay their deductible then I expect referrals.
Starting Aug 28 th we will hold true to the new law and tell the Homowner
that it is their signed obligation to the insurance company to pay it.
I hope that the insurance company allows us to be like the bodyshops and when you have a wreck you only pay your deductible ,we work the rest with the insurance company .
Just saying.


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## MJW

larryb is right, but it was the law last year already. It is just changed to include siding and to give the DLI more enforcement.

http://www.dli.mn.gov/ccld/PDF/review19Summer11.pdf

We cannot get a single insurance job lately with EVERYONE covering deductibles.


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## Grumpy

Sign allowances are just one more way for MORONS who don't understand the first thing about business to screw themselves and screw their colleagues.


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## skipper1946

Surely every homeowner can read, right? On every insurance estimate there is a strong notice about FRAUD. Fraud is not eating your homeowner's deductible, it is requesting the hold back from the insurance company with a fraudulent invoice (billing for the entire RCV) on the project! I could never consider myself a salesman if I gave away a deductible. 

I don't give sign allowances. Your customer is getting a $15K roof for $500 or a $1,000 deductible. Surely they should have some skin (your yard sign) in the game.

I do, however, offer a $100 referral fee for any referral they send that morphs into a completed and paid for project. The sign in their yard qualifies them to participate in the referral spif.


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## TFaulkner

So sign allowances are a fancy way to pay the homeowner's deductible so they'll go with that company?

Never heard of that up here in Idaho. We don't get the crazy stormchasers though.


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## Grumpy

TFaulkner said:


> So sign allowances are a fancy way to pay the homeowner's deductible so they'll go with that company?
> 
> Never heard of that up here in Idaho. We don't get the crazy stormchasers though.


 Are you hiring?! LOL, storm chasers have killed my love for this industry. 


I called some sewer guys to my house for some back up issues. One of the salesmen offered me a $50 rebate to leave my yard sign in the yard for 2 months. It's a rebate, I have to call him after 60 days to collect my check. I have offered that to a few customers now when they ask for a lower price. I put my yard sign up no matter what. As of curently the yard sign stays there until they throw it away


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## TFaulkner

Hah...I'll be hiring soon! Come on up! 

Are any of you guys in with some insurance agents that refer you a lot of work? 

Or is it mostly just people who see your ads call you when they need some insurance work done?


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## skipper1946

*Insurance Agents.*

I have some agents that refer me. I have not really cultivated it with the roofing business. However in the past when I had a full line restoration business, I had a strong following. That was 8 years ago. You can buy glass jars, put your logo and simple contact info on the outside (buy transparent labels and print with a laser printer) and place them with secretaries of agents you decide you want to build a relationship with. 

These secretaries are the gatekeepers. Put high quality candy in them. Visit them regularly to keep the jars mostly full. It is nice when they get empty. They miss the sweets and look forward to your next visit. I would call on an agent 3X before they get this treatment. You can decide by then if they are fertile ground or a waste of time. Many agents want just to write premium and don't give a damn about claims. Those go quickly out the door.

One caveat: This may get you more repair business than you desire. I hate repairs. Normally bottomless black holes. But you be the judge.


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## Grumpy

I don't think it is an Agent's job to process claims. There is a claims department for that.


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## TFaulkner

That's a good point Skipper, repairs aren't a gold mine by any means so it's probably smart not to pursue them.


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## Grumpy

Actually repairs can be very profitable if you have enough of them. I used to have 2 full time repair trucks and can tell you on each truck with one roofing tech, I was able to net slightly less but nearly the same as the 5 man shingle crew. No warranty on repairs either. It's not bad, but can be frustrating as heck fixing other people's mistakes. 


A friend told me he quoted a chimney reflash for $750, kinda cheap but what ever. The customer paid someone $600 to dope it. LOL I guess repairs can be VERY profitable.


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## TFaulkner

Wow, maybe I need to be charging more for repairs. Prices are a bit lower around here from the sounds of it though...Just had a competitor quote a 36 square 1 layer tear off, reroof for $5700, how's that compare with you guys?


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