Water mitigation contractors are often in a tough spot because their business model is based on completing work and then expecting the carrier to pay up. Businesses within the restoration industry understand that carriers aren’t eager to pay fairly, which creates a big problem for contractors as profits are always under attack. Water mitigation contractors want to give their best, but can become distracted by the lack of support and underpayments received throughout the claims process. These situations then place increased pressure on the homeowner, and the cycle continues.
Under these circumstances, it becomes very important for water mitigation contractors to find every way possible to bolster and protect their profit margins. Here are three tips for increasing your profit margins on water mitigation jobs.
- Document, document, document. If you don’t document it, then it didn’t happen. This means pre-mitigation photos (even before you extract water), photos of obvious water damaged materials, moisture maps, atmospheric conditions (indoor and outdoor), material moisture readings, photos of contents protected with plastic, containments, equipment placement photos, and post mitigation photos. The carrier can question all they want, but a photo doesn’t lie! Photos can save your bacon and your pocket book.
- Know your stuff. You absolutely need to know exactly what materials should be removed, what should be dried, and any specialty equipment you need to properly dry the structure. All of this leads to larger profits through adequate equipment use, and proper cleaning and mitigation procedures. Before you get too deep into a project or a loss, reach out to a mentor or professional in the industry and pick their brain. Or, call Aftermath Estimating and one of our master certified water restorers can provide you the technical knowledge you need to ensure you are properly mitigating a loss.
- Build a strong mitigation invoice. You should build, or have built for you, a detailed and accurate mitigation invoice, because the services have already been performed. This is an invoice and not an estimate. An estimate implies there is work still to be done, while an invoice is for work you have already completed. Most restoration contractors perform quality work to S500 standards, but very few bill their services correctly through Xactimate. If you are not intimately familiar with Xactimate and its thousands of line items, you probably are not even aware of all the money you are leaving on the table.
The above three points will assist with increasing profits, but there is one thing needed for all of this to go smoothly: timely payment collection.
It takes money to make money. This means taking all that documentation and submitting it with the Xactimate Invoice, and then pushing for a timely payment. It’s where contractors can really get into a pinch, especially if they are actively involved in the daily operations of the company. There just never seems to be enough time in the day to run the business and run down insurance adjusters for payments.
If you cannot do it yourself, consider partnering with a company like Aftermath to do it for you. If you have any additional questions about these tips, don’t hesitate to contact us. We’re happy to help you with your estimate, invoice and supplementing needs! We can also connect you with one of our own water mitigation pros to answer technical questions surrounding this blog.
Contributor: David Compton