How Many Jobs Does It Take To Grow Your Restoration Business?
I just posted a blog on my website for Construction Company Owners asking them, “How many qualified construction opportunities do you need in your pipeline to make your gross revenue goals for the year?”
Many remodelers and construction company owners tell me that they get only 2 out of every 10 jobs they bid on. While this may be true of construction companies, the conversion ratio for many mitigation companies is much higher. You just don’t get called out to very many jobs that you don’t get. So the issue is not lead conversion, but lead generation.
If your goal is to complete $500,000 of work annually and the average mitigation job is $2500, you need to complete 200 or more jobs a year. Double that for a $1,000,000 revenue goal for a mitigation only company, and you see that is an enormous number of jobs.
Where do they all come from?
Many restoration companies compete in the Yellow Pages for mitigation leads. Not only is the printed page becoming less used today, but the cost is huge!.
Many mitigation companies don’t know where else to turn to for leads than to Yellow Pages advertising so it is highly competitive, and enormously expensive!
Some restoration companies market insurance agents with moderate success, while others may be selected for insurance company preferred contractor programs to provide a steady flow of assignments. But is there another way than these hit or miss approaches that produce, at best, slow and incremental growth?
The answer is, become a full-service contractor.
Yes, that’s correct!
Become a One Call, One Contractor, We Do It All, Contractor!
Homeowners and property managers don’t want to be the general contractor for their damage repair, and insurance carriers prefer working with a single contractor who can complete all phases of the repair.
What will this do for you financially?
Instead of needing 400 mitigation jobs to reach $1,000,000 in revenue you need only 80. Yes, that right, 80 mitigation jobs will on average produce 80 reconstruction jobs. The average size of a damage repair job is $10,000. So 75 mitigation jobs produce $200,000, and 80 damage repair jobs produce $800,000. The numbers make it clear that the single most transformational step a mitigation company can take is to become a full-service contractor.
I personally started as a mitigation only contractor. I was told by my franchise that construction was too hard, had too many problems, and produced too small a profit to make it worthwhile.
Well, was that the wrong advice!
Over the past decade the trend has been for carriers to move toward full-service contractors. In the insurance arena 50% profit margin for construction services using Xactimate pricing is not difficult to achieve. When I sold my business two-thirds of our gross revenue was produced by construction services, including roofing.
If you are a mitigation only company looking to grow your business, your great opportunity lies with becoming full-service. All the really good things happening to insurance damage repair companies come through full-service. How would you like to take the first step toward this kind of opportunity?
I did it, and so can you!
No matter what your needs, we promise to deliver objective, informed advice, and actionable plans for increasing your immediate growth, and sustaining long term revenue growth.
Share this blog with others who may need to hear this message of hope and encouragement, and visit our website for additional resources or to download my FREE eBook How to Grow Your Restoration Business at www.growmyrestorationbusiness.com