So you’re thinking about starting a restoration business? That will be rewarding, fun and challenging! With multiple items to take care of before opening your business, including IICRC training, obtaining insurance, purchasing equipment, marketing, and getting the work to come through the door, it can be a lot to get done!
The two options we will discuss are starting your own business from the ground up, and purchasing a franchise. Both have pros and cons!
Not going the franchise route and starting your own business means you have to do all the groundwork. You come up with a name, create your marketing strategy, determine your equipment needs, build relationships and create your own system and processes.
If you want to start your restoration business with systems and marketing already in place, a franchise may be a good fit for you. A franchise provides a business owner with branding, marketing materials, training, and back and front-end support.
There are tradeoffs between opening your own business and purchasing a franchise. In either case, LearnToRestore.com can help with IICRC training and consulting services before you open your doors, and through every step and project along the way!
Is a restoration business right for me?
The property & insurance restoration industry is different than any other industry. It is related to the construction industry, however, many restoration companies only offer mitigation services and let other contractors complete the rebuild portion of the project. While starting as just a mitigation company, it may be beneficial to eventually start a reconstruction side. This way you can complete the job from start to finish, increase revenues and not have to turn the reconstruction part of the business over to a potential competitor. Being a one stop shop for all restoration needs is a great way to become the risk management service your clients are looking for.
Helping a home or business owner restore their lives is a rewarding experience. As a restorer, you begin the job process when the homeowner needs help and their home is in disarray and finish the job process after successfully restoring their property. During this process, you build great relationships with your clients. In addition to the rewarding work, restoration businesses can be a lucrative venture (if done correctly and honestly).
Restorers often bill insurance companies for the work they do, which contributes to this industry being different than other industries. As restorers, we go to a client’s home, do a bunch of work and don’t charge them. We then bill the insurance company and ask them to pay us. If the job process is done correctly, the bill sent to the insurance is fair and honest and the client has the proper insurance, the insurance usually pays the bill. (There are exceptions to this, including collecting deductibles from the homeowner, coverage issues, etc. The contract is with the homeowner and if the insurance doesn’t pay the bill, the client should understand you will be looking to them for payment. Have a contract between you and the homeowner that is prepared by an attorney and give the client plenty of time to review the contract and make sure they understand it.)
The property restoration industry is different in terms of the hours worked. This is a 24/7/365 business. Water damage happens at all hours. When the phone rings you need to be ready to respond. Creating a great team with on-call rotations helps this process, however, when starting out you may not have a team in place, and you will have to go. The initial job may start after hours, but the remained of the work usually happens during normal business hours.
There are many other services you can offer in your restoration business. Many owners add services including carpet cleaning, carpet repair, asbestos abatement, mold remediation, graffiti removal and fire and smoke restoration among many others.
Water Restoration Franchises
Pros of Purchasing a Franchise
- Established relationships and contracts with insurance companies and nationwide clients
- A recognizable brand with marketing materials and a marketing plan
- Initial and ongoing support
- Established procedures for business operations
- Many items are either completed for you (website creation, vehicle wrap designs) or the franchisor has guidelines and resources to complete these items (purchasing insurance, purchasing equipment)
- Front and back end support (Call center, legal team, website and databases, job management software)
Cons of Purchasing a Franchise
- Initial franchise fee when you purchase the franchise (and renewal fees after the initial contract is expired)
- Ongoing royalties paid to the franchisor (typically a % based on revenue)
- Limited brand freedom (you must keep your marketing and service offerings within the franchisors guidelines)
- Limited geographic areas (Most franchisors sell territories between 75,000-350,000 people, if you want to expand your franchise, you will need to purchase another territory)
- Competitors in the same colored shirt (while you have the recognition of a national company, other franchisees are competitors)
Purchasing a franchise can be a great investment. We have identified a few restoration franchises below. This is not a complete list. Each franchise has different aspects including franchise fees, ongoing royalties, territory size, etc. To learn more about each franchise, you should talk to that companies’ franchise department.
View the Entrepreneur.com list of franchises.
Starting your own Restoration Business
For the remainder of this article, we’re going to discuss starting your own restoration business. Franchises should have all of these items covered for you!
This article is updated often! Check back soon.
