SummitPentagon Premier Roofing Business Plan — Sensitivity and Scenarios

How the plan responds to material cost, job volume, crew productivity and insurance premium moving against it.

Sensitivity and Scenarios

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16.1 Single-variable sensitivity
16.2 Scenarios
16.3 What management can do inside a bad year

16.1 Single-variable sensitivity

Figure 20. Sensitivity of Year 5 EBITDA.

Driver	Effect on Year 5 EBITDA	As a share of base EBITDA	Comment
Gross margin ±4 percentage points	±$257k	48%	One lost crew’s worth of work; most of the overhead base does not move with it
Job volume ±20%	±$455k	86%	The variable that moves silently; the entirely plausible result of wage inflation not passed through
Average ticket ±5%	±$321k	60%	Competitive pressure on quotes, or a mix shift toward smaller jobs
Materials ±10%	±$243k	46%	Asphalt shingle pricing swung nearly one fifth during 2024–2025
Crew labor ±10%	±$172k	32%	Crew vacancy at 12% and wages at $28 an hour
Marketing ±20%	±$76k	14%	The largest overhead line; a lever management directly controls
Workers’ compensation ±4 points of payroll	±$69k	13%	Experience modification; a single fall claim resets it for three years
Year 5 EBITDA, base case	$532k	100%

Volume dominates in magnitude at $455,000 for a 20 per cent movement — 86 per cent of the base EBITDA. Gross margin is the more dangerous variable because it moves silently: a four percentage point erosion costs about $257,000, and unlike a lost contract it produces no event that forces management to notice.

Figure 21. Year 5 EBITDA across gross margin and job volume.

The grid shows the interaction. At the planned volume the business tolerates gross margin down to roughly 32 per cent before EBITDA turns negative; at 20 per cent below plan it needs about 37 per cent. Volume buys tolerance on margin and margin buys tolerance on volume, and a business that misses on both simultaneously is the compound scenario below.

16.2 Scenarios

Figure 22. Year 5 EBITDA across scenarios, with debt service cover.

Scenario	Definition	Year 5 revenue	Year 5 EBITDA	Cover
Base	The plan as presented: 5 crews, 290 replacements, 35.4% gross margin.	$6.42m	$0.53m	2.58x
Margin slide	Gross margin four points below plan — wage inflation not passed through, or under-measured jobs.	$6.42m	$0.28m	1.38x
Ticket pressure	Average ticket 5% below plan under competitive pressure.	$6.10m	$0.21m	1.05x
Volume shortfall	Job volume 20% below plan; most of the overhead base does not move with it.	$5.14m	$0.08m	0.39x
Volume and margin	Volume 20% down and gross margin four points down in the same year.	$5.14m	($0.18m)	n/m

The scenario that actually ends roofing companies

Not a bad year. A gradual margin slide that nobody measures, funded by supplier credit, discovered at the workers’ compensation audit or when a distributor pulls the line. In the margin slide scenario above the business still generates $280,000 of EBITDA and clears its debt service at 1.38 times — it looks survivable, and it is, for one year. The problem is that a four-point slide produces no event: no lost contract, no angry customer, no bounced payment. It shows up as a slightly slower bank balance, absorbed by lengthening supplier terms, and by the time it is visible in an annual account it has been running for eighteen months. The defence is weekly job costing on completed work against the estimate — not monthly, and not on the jobs that went well.

16.3 What management can do inside a bad year

Lever	Available within	Value	Comment
Tighten job costing against the estimate	Weeks	$64k a gross margin point	The fastest lever and the one that compounds
Defer the next crew	One season	Truck, tools, payroll and workers’ compensation	The gates in Section 11 make this automatic
Shift mix toward repairs	One quarter	40.0% gross margin against 34.6% residential	Quoted and completed in days; less weather-dependent
Reduce marketing to the highest-closing channels	One month	Part of $378k	Only the channels measured on cost per sold job; never a blanket cut
Renegotiate material pricing on volume	One buying cycle	Part of the $2.43m materials line	Available only where the distributor relationship has been maintained
Use subcontract crews instead of hiring	Immediately	Converts fixed payroll to variable	Requires the certificate discipline in Section 8
Defer owner compensation	Immediately	$154k a year at Year 5	Available, unpleasant, and the reason it is budgeted rather than assumed away

The first three work without damaging the business. Tightening job costing is free and immediate; deferring a crew removes payroll, a truck payment and a workers’ compensation premium together; and shifting toward repairs improves margin while using capacity that replacement demand is not filling. Cutting marketing broadly is the false economy — it reduces the pipeline that produces next season’s revenue, and in a business where a roof is bought once in twenty years there is no repeat purchase to fall back on.

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