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Managing Your Restoration Business

Are You Staying On Top of All the Industry Changes?

By Les Cunningham
industry changes eye technology 1 0
woman on computer in meeting
Internet word
map on tablet pc la
industry changes eye technology 1 0
woman on computer in meeting
Internet word
map on tablet pc la
September 5, 2012

We all get so busy sometimes that we don’t take the time to slow down and take stock as to what is going on around us. Too many times we are shocked at something that we’ve noticed has “just” changed. What has actually happened is that we “just” noticed the change that has been going on a while, sometimes a long while.

Back in the “old” days, starting in the mid 1980s, there was no software for estimating. As a result, the contractor had to walk the job with the adjuster. They would both agree verbally as to what needed to be done. The contractor would then write the price that they would do the job for on the back of their card and complete it once that price was agreed upon.

A second major change that happened in the 1980s was the evolution of the cell phone. It started as a two-way radio hand-held device, commonly called a “brick.” It morphed from there to a phone in a bag. The engineers and designers then began to decrease the size of the phone device to the size that we use today. In fact, we are seeing the phone become a computer that has more ability than the first HP handheld units in the early 1980s.

A third major change that happened in the 1980s was the beginning of the laptop computer.  The laptop has continued to steadily decrease in size and increase in power. 

In the early 1990s, estimating software started to be used by the major insurance companies. As a result, the contractors had to use the same software in order to communicate with the adjuster as to what was being done and what was going to be paid for. At first glance it would seem that the need for the software was just there to determine a price. After really analyzing what was going on, the contractor began to realize that the insurance company did need a price, but more importantly, the software has really become a communication tool. The communication needed was between all parties to be able to address and resolve the loss. This meant that everyone connected with the loss knew what had to be done on the job.

In the mid to late 1990s the Internet was introduced into the business world. This further cut down on the communication time with all parties involved with a loss. Again though, the real issue was that communication vastly improved in all kinds of ways. What also happened was that the speed of a transaction was greatly accelerated. We went from “snail mail” to e-mail and we were able to send information instantly to a lot of people with just the click of a mouse!

About this same time, the first TPA (Third Party Administrator) opened up for business. The insurance company that started the process was the leader in electronic monitoring of losses.  The company needed help in order to keep growing. I think most contractors will agree that he who gives out the jobs has the attention of the contractor. 

In the 2000s the “Internet Cloud” entered the business world. This meant that software could be used without having to purchase, own or maintain servers and software in your offices. All the contractor needed was the instrument and an Internet connection.

Also in the 2000s the software industry developed contact data management software that was industry specific and could be used to keep track of losses in a way that had never been dreamed of before. We began to accelerate our response times to beginning loss repairs. It brought accountability to a loss in a way that made all of us better at serving the needs of the policy holder. It has even resulted in the policy holder being able to monitor the loss as often as they want to. If used properly, all parties to the loss can know what is going on without making a phone call.

Another bit of accountability has been the introduction of GPS into the business arena. Not only do we know where our vehicles, people and phones are, we can direct them to do specific functions and go to specific jobs via the GPS system.

I’ve only talked about some of the major changes that have occurred in less than 30 years. The real question that I think you need to consider is whether or not you are up to speed with these changes. Go back and think about when you entered the industry. Were you technically up to speed? Have you gotten up to speed? Do you think you can just hire to your needs and you will not have to know how things work in your own company?

I believe my clients to be among the smartest contractors in the industry. When I tell them that, they just smile, because they know their deficiencies and know that there are some people who need a lot of help just to catch up to them in present day. The other reality is that good contractors are not going to wait for someone to catch up to them. Instead, they are going to continue working on staying in front of the best contractors. 

Advanced education is usually talked about in four levels. If you go for advanced schooling, it’s described as levels 5, 6, 7, and 8. The higher level you aspire to, the more specific it becomes. So where is all of this going? The point is that things have not just changed, they have been changing rapidly and on a constant basis. Most of us get into our comfort zone and that’s where we would like to stay until we retire. The reality is that the only constant in our business life is change itself. The choice we have is whether or not we choose to change with the industry changes. The insurance industry is asking for changes and the companies that will do what they ask are getting their business. The second reality is that my clients have 37% to 43% of their business directed by the insurance companies. The other 57% to 63% are asking for the same changes in the way they do business with their contractor.

A lot of contractors continue to believe that if they do quality work (based on what the contractor thinks is quality work) they will be successful. A couple of thoughts come to mind: 1) Good work is not a plus, it is expected, and 2) Lack of good work is a negative. The hard economic reality is that you must run your business with your systems and the insurance company’s metrics.    

Wishing you good business and good profits!

KEYWORDS: restoration restoration business profitability restoration management restoration services restoration technology

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Les Cunningham, CGC,CR,CCR,CGRa, is president and CEO of Business Networks, Inc. He is a restoration industry expert and can be reached at 1-800-525-1009, ext. 14 or e-mail him at Les@BusinessNetworks.com

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