Restoring Success: How to Determine if an Additional In-House Service Makes Sense

A thorough evaluation is crucial in deciding to add services or capabilities

In the restoration business, there is a tendency to constantly evaluate opportunities to expand our services and/or add to our in-house capabilities.

There are numerous reasons to consider expanding services. Some considerations may be inspired by, but not limited to, the opportunity to add to the bottom line. Other influencers may include branding by keeping your name in front of people (marketing), a positive impact on other service departments by giving the controls enjoyed by having a capability in-house, opportunities presented by an existing customer base, and gaining the benefits of “economies of scale” by maximizing the existing investment in facilities and management.

There are an endless number of opportunities to expand or add services to an existing operation. Companies already involved in the restoration industry may consider adding, for example, duct cleaning, textile restoration and plumbing and roofing services to their in-house capabilities. In addition to a variety of services a company may add, the execution can vary from developing a new company or brand to a separate division to incorporating the addition into your existing brand and infrastructure.

Like people, no two companies are the same. Every company has its own unique DNA that makes it special and encompasses its identity. Culture, organization, expertise and even a company’s passions should be considered in the equation. It is important for the team, at all levels of the company, to be able to rally and buy into the new opportunity when adding a service.

A thorough evaluation is crucial in deciding to add services or capabilities, as mistakes can be costly and painful. Thorough evaluation includes both qualitative (considerations that are difficult to assign a value or number to) and quantitative (considerations that have a numeric calculation or value). The following is a list to assist in determining if the next opportunity you consider is a good fit for your organization:

Quantitative

1. ROI (Return on Investment): Calculate the cost of equipment, supplies and additional staffing. Understand the potential revenues, the operating costs and the impact on the bottom line.

2. If equipment, vehicles and staffing are involved, do not overlook the costs of maintenance and repairs, as well as the indirect costs of staffing.

3. Evaluate potential costs of marketing and advertising the service.

4. Infrastructure: Can your existing infrastructure support the additional activity or will there be additional costs due to the expansion?

a. Plant: Storage, building, parking lot.

b. Organizational: Management, human resources, scheduling

Qualitative

1. Diversity: Can adding the service diversify the organization and reduce vulnerabilities of fluctuations in the core business?

2. Customer Experience:

a. Can the addition enhance, and potentially improve, the customer experience of other services that you provide?

b. Can having full control of scheduling and quality have a positive impact on the customer service, quality or efficiencies to your existing services?

3. Expertise: Do you have the expertise, or access to it, necessary to provide the new service?

a. Is the right expertise on-staff?

b. Is there a need for training?

c. Is the expertise readily available to bring in from outside the company?

4. The service addition may lead to new opportunities for growth and career development for your staff.

5. Market Conditions:

a. Understand and evaluate the need for the service in the market you serve.

b. Evaluate existing competition.

c. Development and execution of a marketing plan.

6. Opportunity Costs: Are there other areas of opportunity, expansion, growth or development that would better serve your organization versus the investment in the new service? Be sure to consider the time of the existing leadership of the organization and any negative impact that could result on the existing operation by dividing their attention.

Enjoy all of the opportunities available within the industry by using a thorough evaluation process that considers a multitude of both quantitative and qualitative factors.

Lisa Lavender holds a BS in accounting from Penn State and is an IICRC Master Fire, Water and Textile Restorer. As chief operating officer and co-owner of both Restoration Technical Institute and Berks ∙ Fire ∙ Water Restorations, Inc., Lavender has over 20 years of experience in the restoration and reconstruction industry, and has been involved in the training other restoration professionals since 2012. In 2018, has expanded her passion for serving other restorers by partnering and becoming VP of operations design for iRestore software. In addition to contributing to the running of the operations of her organizations, she authors a monthly column for R&R, Restoring Success, writes, instructs and develops courses and materials in the pursuit of her passion to give knowledge, passion, and inspiration to others for success in the industry. You can reach her at lisa@RTILearning.com.