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Restoration Company Startups Need Equipment & Personnel

On Comments Off on Restoration Company Startups Need Equipment & Personnel in Article by KEITH LEWIS

Now that you’ve decided to start your new restoration business as a full-service provider (see How Much Money Does a Restoration Company Startup Make?), including both mitigation and rebuild services, what more needs to be done?

You need equipment. Plan on financing or leasing $20,000 of equipment. This is enough to do two water jobs simultaneously. You will soon need more equipment, but you will pay for that out of profit rather than as a capital investment. Most contractors finance the initial cost and pay it off in the first year of operation.

You need a service vehicle. A used cargo van, truck and trailer, box truck, cube van, or transit van are each good options. You will pay around $20,000 for a good low mileage used vehicle.

You will hire a mitigation technician. I call this first hire a “homerun hitter” because it needs to be someone certified, experienced, and who requires minimal supervision. You will likely pay a few dollars more per hour for this person than your next hire, but it will be worth it. As an owner new to the industry, you have limited mitigation knowledge, so you need someone who knows what to do and how.

While your technician focuses on mitigation work, you will focus your time and attention on managing the growing number of rebuild jobs. Remember – you manage the job and subcontract all the labor.

If you are looking for help, I have samp[le technician ads and interview questions and specific equipment lists consisting of quantities, model numbers, sources, and costs.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

Restoration Company Startups Need Training & Certifications

On Comments Off on Restoration Company Startups Need Training & Certifications in Article by KEITH LEWIS

The only certification required in our industry is the 3-day Water Restoration Technician Certification (WRT). This provides the foundation knowledge base for our work.

Some course sponsors combine Water Restoration Technician with the Applied Structural Drying (ASD) course in a five-day course. What makes this course so valuable is the use of a training house. The house, comprised of various building materials, is hosed down with a garden hose saturating flooring and other building materials. Through the five-day course, participants conduct moisture inspections, take psychrometric readings, prepare moisture maps, set up equipment, and perform daily drying monitoring. The class provides a level of practical experience that is unmatched through any other combination of training events. I consider it a must for a new owner.

Xactimate is the pricing platform used to prepare the scope of repair along with customary charges. Insurance companies require it’s use, and its an industry norm. The three-day Xactimate Fundamentals course is a must for every new owner. Companies can outsource Xactimate estimate writing, but owners must be able to get around in the program. Gaining familiarity through the three-day course is essential to managing repairs and properly billing for completed work.

EPA’s Lead Renovation, Repair, and Painting Rule (RRP Rule) require that firms performing renovation, repair, and painting projects that might disturb lead-based paint in homes built before 1978 have their field workers and firm certified by EPA. The certification is earned in a one-day RRP Course.

Other courses are helpful to the new owner and his field workers, but those already listed are the essential ones.

Since mold exposure can create liability, it is best for restorer’s to be certified in mold remediation. The IICRC provides the industry-standard Applied Microbial Remediation Technician (AMRT). A company would be in a tough spot if there a liability issue occurred, and the company workers performing the mold remediation are not certified.

This could be a requirement for the first technician hired, or one could be sent to class before mold work is begun.

Many additional training courses could be valuable to the owner and field workers,m, but these are the essential minimum.

Other helpful, but non required courses for the owner might at some time include:

  • General Contractors License
  • Haag Certified Roofing Inspector
  • Certified Aging in Place Specialist (CAPS)

Additional technician training could include:

  • Carpet Cleaning (CCT)
  • Carpet Repair & Reinstallation (RRT)
  • Fire & Smoke Damage Restoration (FSRT)
  • Odor Control Technician (OCT)

There is a lot of training and information support available in the industry to a new owner and to a restoration startup company.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

How to Organize a Restoration Company Startup

On Comments Off on How to Organize a Restoration Company Startup in Article by KEITH LEWIS

Every full-service restoration company is structured the same.

There are four divisions:

  • Mitigation Division
  • Rebuild Division
  • Sales Division
  • Administration Division

MITIGATION DIVISION

The mitigation division has these positions:

  • Mitigation Manager is needed once there are three field technicians. The mitigation manager dispatches, trains, inspects the job site, is the chief technical advisor, and may prepare the invoice of charges.
  • Mitigation Technician – performs the work of water mitigation, mold remediation, and fire cleanup and odor control.

REBUILD DIVISION

The rebuild division is comprised of:

  • Construction Manager is responsible for the entirety of the rebuild and roofing services and all personnel and activities involved.
  • Construction Coordinator provides the administrative duties for the division.
  • Construction Estimator writes the scope of repair for rebuild and roofing work.
  • Project Manager oversees the job site work, including subcontractors, once the work begins.

SALES DIVISION

  • Direct Sales are staff involved in face to face marketing to insurance agents, plumbers, property managers, and commercial contacts.
  • Social Media marketing may be provided in house or by contracted services.

ADMINISTRATION DIVISION

  • Customer Service Representative to answer phones, do new job intake, provide administrative support to other Divisions, AP and AR data input, collections, and more.

For most restoration startups, the owner initially serves as both General Manager and Construction Manager.

The order of hiring is commonly:

  • Mitigation Technician
  • Administrative Assistant
  • Mitigation Technician (second)
  • Construction Professional

For those companies that can hire a construction manager at the launch grow faster than those that require the owner to serve in that role.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

Should a Restoration Company Startup Begin as a Mitigation-Only or Full-Service Company?

On Comments Off on Should a Restoration Company Startup Begin as a Mitigation-Only or Full-Service Company? in Article by KEITH LEWIS

The most important initial question to answer is whether to begin as a mitigation-only company like most restoration franchises or begin as a full-service restoration company.

Mitigation services customarily include water mitigation, mold remediation, and fire and smoke clean up and odor control. Many contractors entering the industry find it relatively simple to learn these services.

Of the 25,000 restoration businesses in the US, 80% provide mitigation services only. In the past, the industry has been known primarily as a water damage industry. Restoration had arguably been synonymous with water mitigation services. But there is another essential service that gets much more attention today.

Becoming full-service requires the addition of rebuild or general contracting services. Building materials that are damaged and removed must be repaired or replaced. General contracting has always been a significant part of the industry but has not been given equal attention to mitigation, and far few restoration contractors have embraced it. Rebuild work is much more complex and complicated, and many restorers find it beyond their comfort level. 50% of US States require some sort of a general contracting license, which has been another barrier to entry.

The truth is that those without a construction background can successfully perform this work. They are required to manage the job in terms of getting a scope of repair completed, they must negotiate and collaborate with the insurance company to reach an agreed-upon scope of repair, and deal with any change orders from the customer.

These steps are customary aspects of managing the job, and the labor can be subcontracted to professionals who know how to hang drywall, paint, do trim carpentry, and install flooring. Most tasks are never as hard as they seem if you get some help from a knowledgeable person to guide you through the process.

The industry as a whole is, however, shifting toward a preference for full-service companies. Customers, carriers, and managed repair programs all prefer the convenience of calling one contractor who can do it all.

90% of customers expect restorers to perform both services, mitigation, and rebuild. They are disappointed if they discover a company does the mitigation only, so why not do both sides of the job and gain the financial reward full-service provides.

As you will see in another blog in this series, adding rebuild is a tremendous moneymaker, the biggest generator in the industry, and a startup restoration company owner is wise to include it in their initial arsenal of service offerings.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

How Much Money Can a Restoration Company Startup Make?

On Comments Off on How Much Money Can a Restoration Company Startup Make? in Article by KEITH LEWIS

Consider these numbers.

Mitigation jobs in the US average $3,500 and rebuild (you have to put back any build materials you take out due to damage) is $12,000.

If you got one mitigation customer a week for 52 weeks, that would produce $182,000 of annual mitigation income. This is not a particularly stellar outcome!

52 rebuilds at $12,000 produce $624,000 of income. Providing full-service (mitigation and rebuild) produces $906,000 of annual income from only one job a week. Every company owner expects to get many more jobs than one per week.

The expected profit margins for mitigation work is 75% and for the rebuild is 50%. If a company performed 52 mitigation jobs in a year, $135,000 of profit would be generated. This would be enough for a single owner operator to live on, but not much leftover to grow the business. Many mitigation-only startups struggle to gain a toe hold in their community because the revenue and net profit margins are so meager, especially in the early years of operation.

If a full-service company completed 52 jobs in the first year, it would produce $906,000 in revenue and $450,000 in profit. One can provide for a family and grow the business with this level of revenue and profit.

I have personally coached many restoration startup companies who have earned $750,000 – $1,000,000 of revenue in their first 12 months.

If you are considering starting a restoration business, I commend you! It is a wonderful recession-proof industry, and I highly recommend it to you.

With equal passion and enthusiasm, I encourage you to begin as a full-service contractor providing both mitigation and rebuild services.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

What Services Should a Startup Restoration Company Provide?

On Comments Off on What Services Should a Startup Restoration Company Provide? in Article by KEITH LEWIS

Restoration Companies are made up of three major divisions of work:

  • Mitigation
  • Rebuild
  • Roofing

MITIGATION

To mitigate means to “reduce or limit the severity of something.” The primary components of mitigation are:

  • Water mitigation
  • Mold remediation
  • Fire cleanup and odor control

80% of the 25,000 restoration companies in the US provide mitigation services only. The average size of a water damage job is $3,500 and generally produces a 75% profit.

REBUILD

Whenever building materials and personal contents are discarded due to water, mold, or fire damage, someone has to do the rebuild. Whatever comes out must be put back. The average size of a rebuild is 3 to 4 times larger than its mitigation job. Rebuild work can easily range from $10,000 to hundreds of thousands in value. With profit margins that exceed 40%, it’s easy to see this is a restorer’s most significant money-making opportunity. 50% of US States don’t require a General Contractor’s license to perform this work, making it easier to offer these services.

ROOFING

There are a lot of geographic areas that encounter hail storms, tornados, hurricanes, and other severe weather outbreaks. Every time one occurs, it creates damage of catastrophic proportions and a high volume of insurance claims for repair. My restoration company received over 200 hail claims and millions in revenue from a single small storm in my city several years ago.

For both rebuild and roofing, the restorer manages the job and subcontracts all the labor to professional trade people.

You don’t have to be an expert to perform mitigation., rebuild, or roofing service. If you can manage systems and processes well, you can sub the labor to experts.

A contractor could perform any one or all of these services in the insurance damage and repair industry.

This is an industry that provides a broad scope of work, high revenue and highly profitable jobs, and a never-ending source of new work from manmade products that break and weather that never takes a break!

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

 

Is the Restoration Industry Recession Proof?

On Comments Off on Is the Restoration Industry Recession Proof? in Article by KEITH LEWIS

I probably deal with more frontline restoration owners on a daily and weekly basis than just about anyone else in our industry. I can tell you – they are ALL busy and some are busier than ever.

Unlike remodeling, carpet cleaning, duct cleaning, and other scheduled services, our work is non-discretionary and is, therefore, an essential service. No one wants to remodel during recessionary times, but everyone wants damage repaired so they can get back to life.

Whatever is going on in financial markets, national politics, or global geopolitical skirmishes manmade things continue to break, and the weather never takes a break!

The bottom line – the insurance industry and the damage and repair work restorers do is RECESSION PROOF!

What am I hearing from restoration owners during this Coronavirus Pandemic – gratitude and thanksgiving! Gratitude for having found a niche of work that is always strong and thanksgiving for the high volume, resilient industry, and highly profitable work that never wanes in the face of economic turmoil. They are grateful to be – recession-proof.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us

How to Start a Restoration Business Series

On Comments Off on How to Start a Restoration Business Series in Article by KEITH LEWIS

I have coached scores and scores of Restoration Business startups. Many of those contractors came out of Information Technology, Real Estate, or Corporate Finance and knew nothing about the industry and were armed only with their interest to get into business for themselves.

They chose restoration work because it’s recession-proof, and they can build a strong business making a lot of money. Perhaps you are thinking about the same things.

Out of my coaching experience, I have written a series of blogs to help people just like you gain the foundational information you need to determine if this work is right for you.

Once you decide to start a restoration business, you may recognize the value of business coaching. We all want to maximize our investment by doing the right things, in the right way, in the correct order, and at the right timing. We want to understand how to get work and make the phones ring. We want to understand who we should hire, where to find them, and how to ensure they are right for your business.

There are so many questions to answer! Having a guide who has been down the road before and who knows what you don’t know can spell the difference between success and disaster.

I would love to talk with you about your plans, answer critical questions you have, get you pointed in the right direction, and off to a great start with your new enterprise.

My 9-month Coaching Plan – The Startup Igniter is precisely what many new contractors are looking for. Costing a fraction of franchising and providing more help than you will get from any other source, you too might find the value in a personal coach dedicated to your success.

Below are the postings of the How to Start a Restoration Company Series. I hope together they will answer most of the critical questions you have. Afterward – give me a call, and let’s talk about how to put it all together! Click on the title to view.

For more information or help to start your restoration business contact me at https://www.growmyrestorationbusiness.com/contact-us