The fastest, most dynamic, and most transformational opportunity to grow your restoration business is to become a full-service contractor by adding rebuild to your service offerings.
Look how the numbers bear this out. Imagine a typical mitigation-only restoration business doing about $750,000 in gross annual sales. This means they are doing about 300 or so mitigation jobs a year. If they made an effort to capture the rebuild for each of their 300 mitigation jobs they would seize the potential of adding $3 million in gross construction sales. There is no more transformational opportunity in the marketplace than this. The typical mitigation job is $2,500 and earns a 75% profit margin. The typical rebuild for that same averaged sized mitigation loss is $10,000 and can produce as much as a 50% profit. If a startup restoration company completed a single job a week over the span of a year and did both mitigation and construction they would produce $650,000 of revenue and a profit of about $350,000 versus $130,000 of revenue doing mitigation only. What kind of company do you want to run? One that produces $750,000 of revenue completing 300 jobs or one that produces $650,000 completing 52 jobs? Yes, right, it really is a no brainer. Construction revenue should produce not less than 3 times the company's mitigation revenue. If you are a $500,000 mitigation company your construction services should produce no less than $1.5 million making you a $2 million business. How attractive is that proposition?
Many contractors enter the mitigation industry knowing very little if anything about mitigation, but they learn. They gain the help of franchises, associations, consultants and others and they learn their trade and many become very very good at it. Adding construction services is just like that. The owner doesn’t need to have a construction background, they don’t need to strap on the tool belt and go hang drywall, they don’t need to grab a paint brush. They need to manage their business and gain the help of professionals who do know how to do these things, just like they did when they started the mitigation side of their business. Many mitigation contractors have figured this out, both franchises and independents. If you want a company built to last and a company that you can one day sell that is valued high enough to retire on you can’t do it without construction services. Becoming a full-service professional is the very best way to grow your restoration business bar none!
Reference: 6 Month Coaching Plan – The Sales Doubler – Fast Track Your Company’s Growth by Becoming a Full-Service Industry Leader http://growmyrestorationbusiness.com/successes/