Top Five Things I’ve Learned Growing a Restoration Business

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It seems like just yesterday, we had embarked on an adventure to start a restoration company. I remember looking at my dad’s garage as it was overfilled with drying equipment bought from Menards trying to figure out what we were going to do with the winter coming. Fast-forward to last year, when I exited, we had grown what I would consider a pretty successful restoration leader within the Chicagoland market. 

Here are the top five things I’ve learned through this aggressive growth!

1. Size doesn’t matter!

It’s funny to go to trade shows and other restoration events or even look in the groups, and you hear all kinds of numbers thrown around! “My company does $1 million a year,” says one guy, “Oh nice! We do about $2.5 million a year.” says another. It seems like everyone is obsessed with growing massive companies with massive amounts of equipment and the nicest trucks. I was that guy too. The entrepreneur that dreamed of the multiple trucks, the state-of-the-art facility, the dots on the map, and if it wasn’t for my father, we probably would’ve fallen down that path! After scaling and having a large number of employees, the trucks, and the facility, I sit back and realize that I’m no better than one of my clients, a $2 million mitigation-only restorer that has 4 employees gets paid upfront, doesn’t bill insurance, turns his marketing on and off whenever he wants to go on vacation. We couldn’t even afford “turning the marketing off” because there’s a massive overhead that needs to be paid every day. We had a significantly higher turn on receivables and I bet you a lower bottom line percentage than that client. So who is right in the end? We both are: we’re both following our mission, and each of our ways has different pros and cons. In the end, size doesn’t matter.

2. Your mission, vision, and core values are not just fluffing your business plan.

I remember sitting at Violand’s business planning retreat year two or three of business for the first time, excited about what we were going to put together. We open up the template and the first thing that jumps right out at us was mission, vision, and core values. My father and I look at each other with blank looks, not knowing what to write. We spent the next 3 days of the retreat working on these three topics, and it took us almost a week after that to iron them out. Little did we know, this wasn’t just “fluff” to add to the business plan, it was the foundation of the restoration business that we built. When founding Albiware, the first thing our co-founder and I did was iron these things out. What are employees going to buy into without a mission and a vision? How do you know who to hire and not hire without core values? After establishing these three key topics, every single employee within our organization had to want to be a part of the mission, see the vision, and have similar core values. We quickly realized that those who didn’t were not good hires and would not last long within the company.

3. People are your most valuable asset, yet the greatest challenge.

When we first started, it was much easier to find and hire employees. This almost spoiled us a bit. However, as time passed, we realized that the most valuable asset we had within the company was our people. We can go to Jon-Don and purchase more equipment and deploy it within seconds but it takes months, if not years to onboard and grow a key employee. I think a lot of restorers undervalue the importance of people and employees in general. The double-edged sword is that people are also the greatest challenge. Sometimes they’re just having a bad day, and other times conflict may arise between two overachievers. As a leader, the greatest challenge is finding what motivates each individual employee and crafting a plan to keep everyone drumming to the same beat, buying into the same mission and vision, despite the interference that occurs daily (emotions, conflict, performance, health, etc).

4. Just because it worked for them, doesn’t mean it works for you!

Often I see restorers asking other restorers for advice and trying to replicate the success of one another. What I have found by trying to replicate is that no two restoration companies are truly the same, and different techniques work well for different companies. If you ask me, TPAs are not the way to grow and scale a restoration company. We all know there are a lot of successful restoration companies whose owners swear that there is no other way! Some companies succeed with plumber marketing and pay $300-$400 a lead. In other markets, plumber marketing is incredibly expensive and doesn’t make sense. Bottom line: As entrepreneurs, we should be unique and ask what are people in the industry NOT doing that we can adopt and gain a competitive advantage over? I’ll give you a hint: I bet you over 90% of restoration companies are NOT digital inbound marketing to referral sources. This is almost unheard of within the restoration industry. However, if you take a quick look at other industries, like software, this is THE way of marketing. You’re going to be the one to implement this tactic because you have a basic understanding of how marketing works, but that doesn’t mean that another restorer will be able to successfully implement it.

5.  Your competitors are actually competitors!

It’s very important that you are friendly with your competitors and get connected with them. However, never forget that they are competitors. We had a competitor we met at a networking event who was very pleasant with us and said we should be friends and remain in touch, and if we needed anything to give him a call! Fast-forward a year later, we end up doing an 8-story water loss caused by a sprinkler system in a trash chute that affected over 30 units and massive common areas. We mobilized over 60 crew members and worked around the clock for a week to dry this building. We billed time and material, and our invoice came in just under $300k. After we had removed all equipment, we found out that said competitor was hired by our client’s insurance company as a consultant. Knowing of our “relationship”, I had called our competitor and let him know if he had any issues with the bill to call me and I would happily explain to him how we came up with the charges. After 45 days of silence, the competitor submits an estimate stating that he could have done the loss for $65k, yielding us to go into legal action with the property owner as their insurance did not want to pay. Later, I find out that he had lost the contract with this property management company a year prior for faulty work. Tough way to learn that your competitors, no matter how nice they are, are actually still your competitors!

Want to learn more about Alex? Check out this conversation from our Restoration Today podcast.

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Alexandru (Alex) Duta

Alexandru (Alex) Duta is a restoration entrepreneur and co-founder of an 8-figure restoration company out of Chicago and Albiware, a restoration job management software. Alex is also an Xactimate Certified trainer. His passion is helping others grow their restoration businesses through efficiency and social responsibility. If you have any questions, you can always reach out to Alex on Facebook or email him at alex@albiware.com.

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