Monday 31 October 2016

How Much Money Can Remodelers Make in the Insurance Damage Repair Industry?

Posted by at 7:30 AM in

Remodel contractors - you can grow remodel business in the insurance damage repair industry.

Before adding a new service offering, expanding one’s service coverage area, or adding new referral sources to your sales process you want to know what it will produce. How much more money can be made, and is it worthwhile. There are two ways to enter the insurance damage repair industry.

The first is to offer water mitigation services. This is typically the first contact with the customer who has experienced water damage to their property. Whether you provide this service or not once the structure is dry someone needs to provide the rebuild services restoring the property to its original condition. Many remodel contractors want to become a full-service restoration company and provide both services – water mitigation and rebuild. Great idea!

For those that do not want to learn a new skill, purchase equipment, hire mitigation technicians, and take the additional steps needed to provide water mitigation services they can choose to only provide rebuild services and they are not penalized for limiting their service offering. But the question is how much money can you make. Consider this. The typical size of a water damage insurance claim is $2500. You can expect to earn a 75% profit from this work since the bulk of the charges are for equipment that typically runs for 3 days during the dryout. If a contractor secured just 1 job a week for a year those 52 jobs would produce $130,000 in revenue and nearly $100,000 in gross profit. Not bad! If this same contractor secured the rebuild for each mitigation job they did you would see that the total number of customers remains the same – 52, but with an average size for rebuild of $10,000 the revenue for 52 jobs dramatically increases from $130,000 to $650,000. WOW!!

I teach my client contractors how to earn 50% profit on rebuild services. This is possible only in the damage repair industry using Xactimate as your estimating and pricing platform, but with Xactimate it is doable for nearly every job every time! This combination could yield $650,000 of revenue and $350,000 of gross profit. Who would not want to get in on this? The truth is a single job a week is way below what one would expect to do.  Becoming a program contractor can easily provide 3 or more jobs a week pushing gross revenue to the $2 million mark and beyond. The opportunity in this industry is tremendous. If you are a remodeler looking for ways to grow your business nothing will make a greater impact on your future growth than entering the insurance damage repair industry.

Reference: 9 Month Coaching Plan – The Startup Igniter – Race to Success with Rock Solid Sources and a Ready-For-Growth Business Foundation