How do you get paid on large loss projects? That’s the million dollar question and it’s a very difficult subject to discuss in a very small space. What I would like to suggest to you is the idea of comparing what happens in a regular construction project as opposed to what happens in an insurance repair project. In fact, I will set it up as a side by side comparison:
So which type of work would you like to do? They both have their pluses and their minuses.
I would suggest that you first decide which type of work is your primary choice and which one is your second choice. I would then go to work on how I could get all of the business that I want as my first choice. If I could not get all of the work that I wanted as my first choice, I would fill up the balance of my desired work with my second choice. Then, I would then decide if my two lists fit your thoughts as to how the list works for you. I would then go to work on ways that you could improve the list, so that the list would work better for you.
So let’s talk about the internal structure of you company and which type of work best fits your company. I would suggest that whichever list of work you want to do, you need to implement “SOS,” or “Systemize, Organize and Standardize.”
Systemize: This means that from the time you have a request of service until the expiration of your warranty, you need a system that everyone in the company knows about and uses. This includes software that allows the company to know exactly what the status of the job is.
Organize:This means that the entire company needs to be prepared for the sequential organization that it takes to handle each job as it needs to be handled.
Standardize: This means that you determine what is your most profitable job. You then determine the best way to handle that job. That means that every future job is handled that way. Obviously jobs are different and not all jobs are going to fit your company operation. What this also means is that your profitability decreases as you take on jobs that do not fit your operation. You then will see why there are some jobs that you do not want and that you cannot do profitably. You cannot be all things to all people and if you want to make a profit, you need to decide what jobs are not as profitable as you want and not take them.
The final reality that you need to come to grips with is that the industry will continue to run with or without you. You might want to decide what you can work with, what you want to change and what are the items that are deal breakers for you. It brings to mind the “Golden Rule of Construction” and that is “he who has the gold rules.” It may not be fair, but that’s the way things are currently working. You can decide that maybe this type of work is not for you or you can continue to work in the industry and work proactively towards making the changes happen that will work best for you.