Over 200 severe weather and climate events have been recorded in the U.S. over the past 36-years. These events have resulted in a boom industry of restoration, with a cost of over 1 billion.
Each region in the country is subject to different types of damage. The southeast experiences more tropical cyclones than the rest of the country, and winter storms are the most severe in the Gulf Coast states and the east coast.
Flooding can be a serious threat to most states, including Texas and the lower Mississippi Valley. California and California are the hardest hit in the west. Extreme storms can be seen in the south central states.
Due to the increasing severity of natural catastrophes, starting a restoration firm can prove lucrative. However, planning is crucial for any new venture.
This guide will help you decide if this is the right business for you.
And at the end, you’ll find answers to some of the most frequently asked questions on how to start a restoration business…
Before hiring employees or purchasing any tools and equipment, there are some things to be aware of.
There are two choices when it comes to starting a business in water restoration. The company can either start from scratch or purchase a franchise. Each approach has its advantages and disadvantages. The individual circumstances surrounding an aspiring entrepreneur will determine which option is the best. Both approaches, however, should be well researched before settling on one.
While buying a franchise can speed up the start-up of the business, it will likely require more upfront capital. A franchise usually requires some training, and sometimes even work for another franchise before the business can be launched.
On the other hand, running a restoration business independently will require more knowledge as there will be no one else to provide assistance as in the case of a franchise.
Researching and seeking out the help of a mentor or partner is one way to figure out how things should be running and working.
One perk of starting a business from scratch is that it allows the owner to be creative on how the business can stand out in the competition.
Customers are the backbone of any restoration business, home-based or franchise. Assess if the local area or region needs restoration services including the type of restoration work.
Research into the history of natural and severe storms in the area or region over the past several years. Look into the existing restoration companies. It is important to determine if those companies are very busy, or if their business is slow.
Before opening, it is important to check that all the necessary certifications are in place for the type and amount of work involved.
It can feel slow to get started in the restoration business. There are two specific skills needed for handling this type of business: analyzing and remediating damages. There are safety guidelines to follow, for instance, when dealing with mold.
Start planning early on by finding out when the necessary certification courses in your region start.
Restoration is primarily based on projects just like any other business in the construction industry. Before beginning building the business, one should decide on what types of projects to do. All types of work require different skills, equipment and tools.
For the first-timers in this industry, start by focusing on a single area, like fire restoration for example. Then, add services from there.
The geographic location of the business is a big factor in the services being offered. For example, there may not be enough work available in the northeast area, but there could potentially be more mold remediation work in the southeast because of the warmer weather.
A coastal area could have water restoration from flooding as the primary focus of the startup. It could be easier to market the services to a niche audience if the business is focused only on restoration.
The construction and restoration industry requires permits and licensing. Start by getting a business permit to set up the company name as well as the preferred type of business. It is possible that a contractor’s license is necessary depending on what the state or area requires.
Many states mandate contractors to be licensed when performing work above a certain amount. The range can be anywhere from $1,000 to $4,000.
Information about the qualifications is available at the office of the local county clerk. Each state has its own licensing requirements. For a nominal fee, the clerk will provide a form to fill out and submit.
A construction permit, also known as a “building permit”, may also be required depending on the local regulations and the type of work involved. Becoming familiar with the filing process would be easy as each permit is issued per project.
Besides the permits, getting the right insurance policy is as important. The state sets the amount and type of insurance depending on what kind of restoration business is involved. Insurance must cover the equipment from theft, the company against lawsuits, and workers against injuries. Make sure, above all, to choose a reliable insurance company.
It would be difficult to manage a restoration company with no employees. Managing all aspects of marketing, estimation, remediation, reconstruction and repair alone is simply impossible. Therefore, it is important to first determine the type of job and then hire the right people.
It’s going to benefit the business especially during its early stages if at least one person who holds certain certifications can manage the operations. On all job sites, training and certification are a must.
If there are two people working in the company that can lead a work team, the owner can do two different jobs or continue to work at a location if one of them is not available.
It can be challenging to estimate how many jobs can be accepted in a given time frame. This will depend on the size of the team. Make sure to hire at least one employee with some certifications. This person can be in charge of managing the daily operations of the business. Once more projects start coming in and the workload increases, more people can then be hired
Remember too that once someone is hired, that person becomes an employee and thus needs to be compensated even if there’s no work coming in. Do not hire too many people in the early stages.
High-quality equipment is essential for any restoration project. To purchase tools and equipment, a commercial vehicle is required. This vehicle has two main functions: transportation and marketing.
The company name, address, and phone number should be clearly written on the truck. If the truck is properly labeled, it will make the company appear more professional and organized.
The equipment needed to be purchased will depend on the type of services offered.
Water restoration projects require air movers as well as air scrubbers and dehumidifiers. Water damage often needs to be repaired during fire restoration so most likely, the same equipment will be required.
Power washers, moisture meters, extractors, water damage equipment, and other small items such as power cords and safety equipment are some of the important tools that the crew would need. Again, the type of equipment that needs to be purchased depends on the type of restoration work that the company does.
It is important to stock up on supplies and equipment before starting the restoration business. However, it’s easy to get carried away with initial purchases.
Purchase only the equipment needed in order to get started on the restoration projects. It is important to not overspend. Once the business grows, more equipment can then be added.
Particularly important for the restoration and construction industry is training and certifications. The company is responsible for the crew who is working on a restoration project, including the homeowner’s safety and health.
Some types of damage are hidden in walls and under cabinets, so they may not be visible. All of these damages need to be completely remediated, if not removed, to prevent any future problems.
Although having the right equipment and trained crew will make the restoration company more competitive, finding enough jobs or projects is just as important as this needed to grow the business.
A lot of new businesses have difficulty letting the people in a local neighborhood know they exist and what they offer. At first, it’s going to be difficult to find satisfied customers who are willing to spread the word.
This is where marketing plans come into play. Below are some examples of marketing strategies:
Marketing is a creative undertaking business owners must engage in if the business is to succeed. It is important to consider where customers are located and how the company’s name and information reach the target market.
Business goals vary depending on the kind of restoration service being offered. The goals of a water restoration business may differ from that of a fire restoration service.
When people are going through a traumatic experience, a restoration company can help. Most people don’t anticipate having their home destroyed by fire or flood. It leaves them feeling vulnerable and scared.
Photo Above: A water damage restoration business provides water remediation services for places damaged by water.
A reliable water damage restoration company can bring back peace of mind and restore people’s lives quickly and safely. Knowing that the business is helping people in their trauma can give a positive feeling.
But running a business that achieves or exceeds its profit goals is an even greater feeling. If the business is not making any profit, it’s impossible to continue working and helping those people in need.
It is possible to make a profit with realistic goals and continue providing services for the community.
For each job type the service provider performs, establish realistic profit margin goals. Different streams of revenue include fire cleanup, mold remediation, reconstruction, and water damage restoration, among others.
Make sure to calculate the cost of these jobs. And to that cost, add a percentage which represents the profit margin.
The net profit of the business is the amount of revenue of all completed jobs, minus any costs. The overhead expenses, such as rent for office space and insurance premiums, must be taken out of the net profit calculation at the end. And the business performance can be assessed by checking the quarterly net profit.
To ensure the restoration business is financially sustainable, profit goals need to be established and net profits monitored.
The first year of the business may bring in little profit as some of the money will be used to invest in new equipment and get the business started. The net profit should increase after the first year.
There are many ways to increase the net profit. Here are some of them:
Time management is another aspect that impacts any business’ profit margin. Both the owner and employees want to make the most of the time spent in working. This is easy to calculate for the employees since the owner already knows how much they are paid and what they accomplish each work day.
A restoration business is a complex undertaking that requires careful planning. One would need a business plan that includes equipment purchases and certifications as well as marketing.
With the right information, the financing and the proper funding, anyone can start a restoration service. A well-crafted business plan doubles its growth potential.
It is important that the future restoration company owner understands all licensing and certifications that are required for the business. There is a lot to learn about how to restore a property that has been severely damaged by water, fire, or mold.
The art of restoring personal possessions is not an easy task. It’s often done under the influence of emotional homeowners who feel displaced, unhappy, or even traumatized.
There are many practical tips and tricks that can be used to dry out certain materials. Mold is also a scientific concern. In restoration work, it is crucial to know how it grows and where it can be found. It’s vital for both the clients’ and crew’s health.
The structural integrity and safety of buildings are also important factors in health and safety. In flood and fire conditions, engineering and construction principles must be tested. Each restoration is unique and the clients rely on the ability of the restoration service provider to accomplish it.
The work will be easier and more efficient if the right equipment is in place. Water damage is an urgent situation and requires that a restoration company arrives quickly. The more water, fire, and mold remain in an area, the more serious the damage will be.
If the equipment is well-maintained and has the right size, work can be started right away. This can be crucial for time-sensitive jobs. It could mean the difference between landing a job or being replaced by a competitor.
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
With this digital real estate program, you can have the ability to completely walk away from manual labor!
Sound too good to be true?
Of course it does!
But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $1000 a month!
See why they call it digital real estate now?
That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.
Unlike the passive income ideas I mentioned earlier…
This one actually allows you to collect that without working in a brick and mortar business all day.
Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.
Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.
Now, I know you probably have tons of questions… So, check this out to learn more.