Monday 21 December 2015

What You Need to Start a Restoration Company

Posted by at 9:39 AM in

What You Need to Start Restoration Company

Startup costs are the #1 deterrent to many would be entrepreneurs achieving their dream of starting their own business. Amassing the capital to buy a franchise territory, purchase needed equipment, and hire workers is out of reach for most would be business owners.

I have good news for you – startup costs are not as expensive in the damage repair industry as you might think. In my coaching of startup businesses I find two kinds of owners; one has capital for investment and one doesn’t. The funded startup owner taps into retirement funds or goes the long route to secure a Small Business Administration loan. They can start out with new equipment, cash reserves, and a pile of debt. The unfinanced owner has scraped together savings over the years and hopes they have just enough to make a go of starting a restoration company.

I am no equipment salesman; I am a business coach.

I want you to be successful with what you have. So here is the truth about what you need to start your restoration business. The key to the early weeks and month of startup is to have enough equipment to handle two residential water damage jobs simultaneously and enough industry training to do a good job with industry technicals and standards.

What equipment do I need to get started?

Not much! Here is a quick rundown of what you need at a minimum to begin:

  • Moisture meters for one technician – a penetrating moisture meter with hammer probe, and thermo-hygrometer for psychrometric readings.
  • Service van – I prefer an extended body service van which gives room to carry enough drying equipment to start a single job.
  • A truckmounted extraction unit like the ones used by carpet cleaners is preferred. It gives more lift and does a more thorough job at water extraction. If money is an issue a portable extraction unit will get you started along with a power sprayer for washing sewage will be enough for your startup.
  • Three dehumidifiers (2 XLg and 1 Lg) and 15 axial fans is enough to cover two home repair jobs at a time.
  • DO NOT buy tools for your subcontractors who do your rebuild. Each of those craftsmen must provide their own tools so this is not something you need to be concerned with. Hiring and working effectively with subcontractors is a conversation all by itself and should be had early on in your planning but this is not addressed here.

That’s it! This is a minimal equipment load to get started. You can then buy additional equipment as needed and out of profit from work completed. You can buy used equipment and there are several online sources available that can be checked for availability. You don’t need the $75,000 - $125,000 equipment packages many groups will try to sell you on. There are also other cost savings arrangements in the early months of your work when you will need to spend the bulk of your time focused on marketing whereby you can subcontract the extraction work to carpet cleaners and others giving you the time to focus on building the business rather than doing the work.

What training do I need?

Owners need only a couple of classes initially to get industry grounded and ready to open shop. The first is the Water Restoration Technician (WRT) course. There are many classes offered by various groups across the country so you should have no problem finding one nearby. I would encourage you to choose a source that provides an IICRC WRT Certification as part of the training. The WRT course familiarizes the new owner with the science of drying, common terms and best practices for mitigation.

This is important since you are likely to do some of the work yourself early on in your startup and you need the familiarization necessary to properly supervise your crew. This course will provide you with both. The second course needed is the three day Xactimate training. Xactimate is an amazing program and the centerpiece for your billing process. There are a number of really good sources of help that provide estimating services and template for construction take-offs that helps you record the scope of damage and repair as enables the services to provide you with a thorough and well written mitigation and rebuild estimate. Don’t be afraid of this – there is a lot of good and affordable help available to you to address estimating needs. That is all the industry training needed to get underway with confidence. I recommend taking both classes before you begin your marketing and initial launch.

How do I get work?

This is the big question. How do I get work? As you can imagine gaining traction and getting the phones to ring during the early months of your launch may be a daunting task but one you must be successful at. It is for this reason that I strongly encourage you to maximize your efforts by becoming full-service performing both mitigation and rebuild from the outset maximizing the benefit of each job you receive. Many vendors will try to sell you on an expensive web design and ongoing SEO program that could cost upwards of $750 a month.

DO NOT do this! Others will sell you on the value of lead generating sites. You pay money for leads whether or not they turn into actual jobs. Rarely do I talk with a contractor who is satisfied with the ROI for this practice. Google AdWords, Yellow Pages, and many other marketing services designed to put the customer in touch with you are both ineffective and costly.

You will be stunned to find the cost of Yellow Page ads that get into the first 3 water damage positions in your community. If you are not in the first 3 you are wasting your money and you won’t be able to afford the cost of the top three spots. So if these marketing approaches don’t work what can you do? Let’s get into the mind of your customer when they are standing ankle deep in water. What are they most likely to do in getting immediate help to respond to their emergency?

  • They call a plumber – “Turn off my running water!” Plumbers come in contact with running water nearly every day of their work. How much work might you get in a year with just a handful of plumbers putting you in immediate touch with a homeowner who needs water extraction once they stop the flow of water?
  • They call their insurance agent – “Please help me. What do I do?” What value would it be to you if the agent made a call to you or offered your name to their client?
  • They call the 800 number for their insurance carrier to report a claim – “what should I do now?” Since nearly ALL insurance carriers manage their claims through a Third Party Administrator like Contractor Connection this call will lead to an immediate assignment to one of the TPAs preferred contractors for immediate dispatch.

These are the three sources you want to focus the bulk of your efforts on during the first year since these are the dominant sources of referral work and where potential customers first turn to for help. There are many tactics that can be used to access the referral power of each of these groups.

I would be happy to introduce them to you. With some help pointing you in the right directions, following industry best practices, avoiding common mistakes, and working hard your business can gain the traction needed during the first year to insure its success. You can do it! Many others have and you can too!

As a top industry business coach I help restoration business startups be successful. Visit my website today where you will find over 50 blogs, podcasts and webinars on topics related to growing your restoration business.

You will find a Coaching Plan that is uniquely focused on the restoration startup called THE STARTUP IGNITER. You will also find two FREE eBooks titled HOW TO GROW YOUR RESTORATION BUSINESS and STOP YOUR PROFIT KILLERS DEAD IN THEIR TRACKS. There is a lot of support available to you to help insure that your first year provides the traction and operational development to succeed and thrive as you continue growing your restoration business. Visit me at or call me for a FREE 30 Minute Consultation at 800.655.1598.