80% of the 25,000 Restoration business in the US provide only mitigation services. That’s right, 4 out of 5 remove damaged building materials, but they don’t do the putback. Any company smart enough to add put back services can triple its business in 18 – 24 months. Don’t be afraid of this!
In the past, many insurance companies sponsored a managed repair program. State Farm had its Preferred Service Provider program, American Family had its Home Repair Program, and so on. A contractor could apply directly to the insurance company and, if approved, would be added to their list as a preferred vendors/contractors.
If you can’t operate your business to produce a 20% net profit, there is something seriously wrong with your business! We’ve all heard of the financial term EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This metric is a measure of a company’s profitability and strength of operations. It shows how much cash flow a company generates from its operations and depends on its operational efficiency.
The reason we take bids from subcontractors is that we don’t know any better way. There is a better way! First, determine exactly what you want them to do. Prepare a subscope of the master scope detailing the work you assign them.
As a contractor, I was always interested in how others did it and built successful businesses. Perhaps you will find insight and encouragement from learning how I did mine.
We all want referral work!! In our restoration industry, we call National Managed Repair Programs Third Party Administrator Networks (TPAs). These National groups administrate property claims in conjunction with the carrier, including assigning them to network contractors.
This is the time of year when we take note of our year-end numbers. We ask what can we do to have a strong finish to the year. What can you do? NOTHING! Perhaps that isn't entirely fair. You can focus on collecting unpaid balances and reducing your AR.
Good cash flow management ensures there is always enough cash on hand to meet expenses. For most restoration owners, this is rarely the case. We always seem to be cash strapped. We are either preparing for payroll or just completing it. There is rarely a surplus of money on hand, making this one of the highest pressure experiences in our business life.
NO, you don’t use it for masking a paint job, silly! Have you ever had a customer at the end of the job come up with a two-page punch list that’s easily a week’s worth of work? Yes, I have.
What if one TPA sent you 3 jobs a month. That’s 36 a year, and if you are a mitigation-only company that will produce more than $100,000 of revenue. If you are a full-service contractor, those three jobs a month…