The single greatest attribute of companies that are successful in the restoration industry today is discipline. By successful, I am not referring to the thousands of restorers with $1-2 million in annual revenue and 10% bottom lines. I am referring to the handful of contractors with superior financial performance. This elite group turns net profits of 15-20%, consistently produces current ratios of 4:1 or better, maintains equity positions exponentially greater than debt, and manages accounts receivable turns of less than 30 days.
If this profile sounds attractive to you, you are not alone. Right now, first generation restorers all across North America are faced with the brutal reality of mediocre financial positions and limited options for succession. The good news is there is still time to change and build a company that is steadfast and resilient, providing enviable returns for years to come. The restoration companies that have endured the years, evolved with the maturing of the industry, and survived the test of succession (all while providing outstanding returns on equity) display undeniable characteristics of disciplined behavior.