Why Your Restoration Business Will Fail

Are you thinking about starting your own restoration business? Have you already started your company?  Well then, let’s have a little chat. 

In general, while most busineses will look successful for the first year of operation, they can begin to fizzle out towards the fifth year. Many are nonexistent before the ten year mark. When you look at the statistics of the rate of failure, it may make you a bit hesitant to try. 


Of course, there are many reasons why a business will not see longevity.  One of the main ones is that basically, no one’s buying what you’re selling.  But, you’re trying to launch a restoration business, which means you have an established market of necessity. Unless indestructible building materials are invented, people stop flushing large things down the toilet or natural disasters cease to exist, the revenue is there for the taking. That being the case, here are some other reasons (both in a general business sense as well as specific to the restoration business) why your business may end before it gets a chance to grow.

4 Principles of A Successful Business Model

Lack of Planning

There’s no point in even opening the doors at all if you don’t have a viable business plan.  How much capital do you need to get started? You’re going to need to look worthy of a financial institution backing you and a good business plan will assist you in that. It takes a considerable amount of research to figure out what aspects of restoration you want to implement, how you plan on getting jobs, the average amount of revenue you can expect, the amount of investment in employees, equipment, training, marketing, etc. What’s your budget going to be? What are your goals? How are you going to reach them?

Internally, a good business plan will ensure that everyone is on the same page about what the expectations are for the company in terms of operations, profit projections, potential problems and goals.  Periodically reviewing and adjusting the business plan can have a positive impact, especially when goals are met.

If coming up with a business plan seems overwhelming, you may want to consider either enlisting a professional company to help you or consulting a successful restoration business owner for advice that specifically relates to the industry. 



Will you be helping the community by restoring the lives of disaster-ravaged families? Yes. But you’re in business to make money and no profit means that you’re just maintaining and it’s not sustainable in the long run.  For restoration, part of the problem could be focusing on the wrong part of the company. 

There’s the technical side of it: the processes of structural drying, fire or mold remediation and getting the latest or best equipment. Then, you are concentrating on how the equipment works, demolition and debris removal, etc.  The focus is put on the work itself as opposed to how to maximize the work profit.  Training for you and your techs (if you have any yet) is essential.  To help with this training, we put together bundled pricing for all the recommended training. Focusing on technical training can help increase the average dollar sale. This creates massive change to your overall profitability. 


Being successful means focusing on the business aspect too. That actually serves to govern the technical side. Many techs that become business owners keep a technician mentality. This means the technical side of the company is good! They also tend to focus on the new technology and techniques, also important. But It doesn’t matter if you have the best equipment in the industry or do the best job. If you aren’t properly charging for the usage, your profitability will suffer. In fact, if all companies are charging the same thing (using the same price list), the ones that do the worst job may have more turn over, little overhead and little training and can still be more profitable! Training is needed to make sure your pricing matches your overhead and quality of work. 

This is where having an understanding of line items and negotiating your estimates with insurance companies to make sure you get paid for the work you do and get a return on the investments you have made for that equipment and technical training.



While there certainly is camaraderie in the restoration industry, never forget that you will be competing with other companies in your service area. Unless they are employing unscrupulous business tactics, they aren’t the enemy.  In most cases, there are plenty of jobs to go around for everyone. But you want your company to be the preferred choice. 

Complacency can lead to failure. You should have a marketing strategy that is always ongoing and that changes with the fluctuation of the industry as well as the needs of potential clients. You should always be aware of how other companies in your area are performing.  In addition, looking at the success of companies in other areas that aren’t your competition could help you discover something that can give you an edge in your domain. The best competitors learn from each other. There is a “Big Mac” and a “Big King” to match. When Coca Cola made Coke Vanilla, it was only a matter of time before Pepsi had Vanilla Pepsi. Research and learn from (don’t steal) their ideas. Or better yet, be innovative enough to be the big dog. Be the competitor that others are trying to catch. 

You can use all the marketing tricks available to draw in business but remember that something as simple as failing to provide a quality of service that either matches or exceeds your competition, could be your undoing. So, your product must match your marketing. Don’t say you’re the best…. Prove you’re the best in your area. Don’t just say you’re fast and available, when you get opportunity, show them. 



This one really isn’t considered as much as it should be in the restoration industry.  Likely, you’re starting off small with a few technicians. Or maybe just one…. you. You’re all set to go with the proper equipment and training and getting a fair amount of jobs and starting to build a reputation for your company.

But you can’t predict when a disaster will happen; which is why you offer emergency restoration services. Your technicians are pushed to the limit. If you don’t have a good process in place and there is inadequate training on that process, the result is eventual burnout. 

Imagine receiving multiple emergency calls.  By the time the technicians return from the site at some ungodly hourly, they are too tired to tend to unloading or reorganizing the equipment. Now the truck is in disarray! Subsequent calls keep coming in. Without an established way to navigate these challenges,   including making sure there is a scheduled time for equipment cleaning and maintenance; proper inventory to ensure all the necessary equipment is available for an emergency; an on-call schedule so no one is confused about whose turn it is to handle the job; making sure the paperwork with measurements and readings is completed to upload; follow-up during business hours…you get the picture.  The business won’t last due to a high turnover rate of technicians or you just not being able to keep up with the workload and deciding just to give up. Don’t blame the millennials for not wanting to work. Maybe your process is the issue. 



What’s that saying? “You’re only as good as your weakest link.” Your business is only as good as the people who are on your team. Therefore, it behooves you to thoroughly vet anyone who will be involved in your company, no matter the role. Do they share your vision and goals for the company and offer ways to support and improve? Can you trust them or do they have their own agenda? Will the processes and procedures you implement be followed? Are all involved invested in the success and growth of the company?

This is vital.  You can’t expect to succeed in the battlefield of restoration with people in your midst that are attempting to undermine the bottom line. Sometimes, it’s not even malicious.  Everyone isn’t necessarily a good fit for what you are trying to accomplish and that ends up tanking your business from the inside out. The same energy that you put into researching how to start a business should be applied to figuring out who will be best to help you avoid failing.

And guess what, the leader of the team is a part of the team too. As the leader, is your vision clear? Are your goals clear? Do you have Profitable Activities selected to help your team achieve the company goals? Do you have your principles documented so your company fits your vision, even when a tech is making a decision on site?

The Takeaway

While there is never a guarantee that your business will flourish, knowing some of the pitfalls of starting a disaster restoration business can certainly lead to success.  


Chloe Hudson

Chloe Hudson is a freelance Content Creator based in Georgia. She worked for Champion Cleaning Systems, Inc. and has over 20 years of experience in the disaster restoration industry. She has certification in water, fire and mold restoration and has been involved in most aspects of the industry including being a technician, controlling content manipulation inventory, management, estimating, accounting and reception.


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