How to Adopt a Scalable Business Model

Since water damage restoration is a fairly young industry, there are many opportunities for an independent restorer to grow. A smart business owner in the water damage restoration industry will see the value of creating a scalable business model. A scalable business is more than a job, more than self employment, it’s asset you can easily sell to interested investors. Creating a scalable business model isn’t hard, but it definitely requires extensive knowledge of the industry and a thoughtful approach to daily operations.

Understanding the Difference Between Growing and Scaling

A scalable business isn’t simply a business that is growing. A scalable business is one that can exponentially increase the number of customers they are serving without increasing their expenses at the same rate.

This business model is especially beneficial to water damage restoration companies because it allows owners to adjust to the fluctuations we’ve learned to expect from our industry. Due to the unpredictability of natural disasters, plumbing leaks or other water damage events, weeks may go by without a restoration job and then several jobs could hit a company all at once. In order to succeed during busy seasons, you must have staff, supplies and equipment at your disposal. However, to operate at this level year-round, when jobs aren’t coming in, isn’t a sustainable business model long term. Adopting a scalable business model allows water damage restoration specialists to quickly adapt to business demands while keeping their budget in check.

Embrace Contract and Part-Time Labor

Employees are essential to the operation of a water damage restoration company, but they are also the most costly part of the budget. When you adopt a scalable business model, you understand that keeping enough full-time employees on board to keep up during your busiest seasons isn’t sustainable.

Because of this, we encourage you to connect with talented contract employees and part-time labor. Although contract labor may come at a higher cost per hour, it pays off in the long run when you’re not paying the benefits and wages of a full-time employee all year long.

Collaborate with Fellow Contractors

When it comes to adopting a scalable business model, networking is an essential practice that will help you succeed. By developing strong, collaborative relationships with other restoration contractors that operate outside of your immediate territory, you have the opportunity to share resources and labor during seasons of high demand.

When a large restoration job or multiple jobs come in at once, being able to extend the opportunity to contract a few employees, rent equipment or purchase supplies can be profitable for everyone involved.

Develop Standard, Repeatable Systems

A scalable business model is one whose daily operations can be easily repeated time and time again and achieve the same results. Without standardized, repeatable systems there is no way to successfully scale a business. Systems that guide any staff member, no matter how experienced, through each and every step of a task, such as giving an estimate or taking care of the truck, are the building blocks of businesses that can run themselves.

Not only do systems allow for you to quickly scale your operations when business demands change, they give your business incredible valuable to potential investors because they see a high profit business that will require very little management on their part.

Extensively Train Management and Core Staff

When business picks up, a scalable business needs staff members who can jump into any role or educate contract employees on standard operating procedures. Because of this, it always pays off to invest in the training of your management and core staff.

Additionally, just like operating systems, all training should be standard and repeatable. Development of an employee handbook and training materials that are used with every single hire is essential to making sure employee performance is satisfactory because they clearly understand what is expected of them each day.

Pay Attention to Cash Flow

Nothing puts a wrench in the operations of a busy restoration company quite like a problem with cash flow. In order to accept multiple jobs at once or to take on large jobs, your company must have available to them the funds needed to purchase supplies and pay employees.

Because of this, paying attention to cash flow should always be a priority. We suggest that all restoration companies adopt a system for invoicing, collecting payment and following up on unpaid invoices. When you know the status of every invoice, you can avoid the unpleasant task of tracking down late payments.

At More Floods, we want our members to see their business as more than self-employment. We want them to understand how valuable of an asset their restoration company could be when operating under a scalable business model. Members of More Floods have access to operational systems and marketing methods proven to be essential to scaling a business. To learn more about becoming a member, click here or call 1-866-667-3356.

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