When you look at starting a restoration business, you’ll find yourself looking at franchises that will provide you with a territory. But should you create a territory for your independent restoration business?
We’re going to tell you why we think you should set a territory for yourself, even if you aren’t a franchisee. We’ll also talk about how to expand your territory later.
Choosing a territory
Finding a territory that can sustain your business isn’t hard for many of us. That’s usually because there are some geographical restrictions. If you’re in a valley, crossing the mountains might be a long, wasteful trip. If you have to drive an hour to next population center, you have your answer.
For others, you might need to look at a major city and decide what you’re going to have as your territory. For example, saying your territory is Los Angeles County is like saying your territory is the East Coast. LA County covers an area larger than Rhode Island and Delaware combined.
The first place to look for territories is the franchisors. They will have territories that are set not only on where their current franchisees are, but on driving distances, population densities, and more.
Next, look at a map of the natural area you can work in. For example, if you know it takes twice as long to go into the city as to head the other direction, you know you can extend your area twice as deep into the outskirts.
Look a population density. For example, a quick look at many franchising sites, you’ll see that the franchises are usually given 250,000 to 350,000 people in their territory. Anything less is a micro-territory, which might be great for small crew. Bear in mind, there are about 1.2 million people on Manhattan Island, 1.3 million in Dallas, and 4 million in the City of Los Angeles. Your 250,000 people might only be ten square blocks in New York City, or it might be much larger. Montana has just over 1 million people. There, your territory there might be governed by distances, not population.
Think of it this way: If you’re going to spend hours driving to and from a job, whether from distance or traffic, it’s time you’re not getting paid.
Once you’ve chosen a territory and started your business, it’s time to look at where you’re going to expand to next. Pull out a map and lay out territories two and three. Those are the places you’ll start new crews and grow your business.
A No-Territory Business
It’s difficult to be a restoration business that exclusively follows the storms and floods that hit the country. You arrive a bit like an ambulance chaser.
If you set up your business in advance in multiple states and hold licenses there, you can move into those places when they have problems with storms. For example, a restoration business with business licenses in Louisiana, Florida, and Texas can probably keep busy all through hurricane season and beyond. A northern business with licenses around the Great Lakes can keep busy repairing winter storm damage for much of the year, especially if they include roofing.
It’s worth looking at, but you want to make sure that you work hard to be part of the communities you’re planning to work in before there’s a problem. You don’t want to be seen as a profiteer, there to take their insurance money and run.