We asked a sampling of our regular contributors to share what they expect for next year and how the kind of advice they can offer to restoration contractors will help to meet those expectations.
Click on their photos below for their responses.
Executive Director of The Experience
The restoration business is recession-proof. Disasters are occurring every day, and there is a great need for qualified and competent Restorers. Despite the potential for a change in the U.S. economy, the restoration business will continue to thrive in 2023.
We are seeing more catastrophic storms with damage levels at all-time highs. Restoration companies should position themselves to be the experts in their area and, if they want to travel, find partnerships around the country where they can help respond in times of need. Education, training and a clear understanding of the science of restorative drying and cleaning are paramount. Hands-on training and keeping up with new technologies will give your company the leading edge needed to provide excellent services for the consumers.
Environmental, Health, and Safety (EHS) Director for Signal Restoration Service
For 2023, I’ll have a mix of articles that will touch on the elements of environmental, health, and safety (EHS). You will see some environmental topics. For instance, did you know there is a regulation on silica dust from cutting and grinding stone, cement, and block? You will also see topics along the lines of employee health, such as blood-borne pathogens and ozone. Finally, you will see safety topics that venture away from simply wearing gloves and safety glasses; I’m thinking along the lines of aerial lifts and excessive noise. I believe this variation of topics will prove to be interesting and save you from the monotony of repetitive safety topics found elsewhere!
Author of books on the restoration business
With 2022 coming to a close, restorers will begin to look at their business plans for 2023. With wildfires, tornados, hurricanes, flooding, and other natural disasters occurring more frequently and increasing in severity, restorers will need to strategically position themselves and be ready to respond to wide-scale disaster events as well as maintain their profitability through the slow seasons.
Inflation, supply chain issues, labor shortages, changes in insurance coverages and the overall cost of doing business is likely to continue, which will force many to rethink how they get business and whether a different approach will be needed to weather the storm.
Managed repair programs will likely grow in popularity with insurance carriers to cut claim costs and increase their profits. So, if your eggs are all in the program work basket, it may be time to diversify.
“He who fails to plan is planning to fail.” – Winston Churchill
Co-owner of both Restoration Technical Institute and Berks ∙ Fire ∙ Water Restorations Inc.
As we enter 2023, as an industry we are seeing an increase in regulatory actions related to our services. At present, most is related to mold. However, it is wise for restorers to stay tuned and prepared to respond to increased regulatory activity. Although there are always drawbacks when regulation increases, there are also opportunities for those who are vigilant and continually prepare.
As economic strain continues to escalate, it is possible that the industry is further impacted by worsening economic conditions in the immediate future. It is important to not be lulled into a false sense of security of what is often called a “recession-proof” industry.
I cringe a bit when our industry is referred to as recession-proof. Being in business during the last recession in 2008, our restoration company was significantly impacted. I believe the impact was a result of increased competition from construction and other related industries, an increase in DYI, and other economic related factors and pressures. It is good to be prepared and weather the storm.
Lastly, after the last several years of labor shortages and a competitive hiring landscape, many companies have addressed both the people management and leadership skills in their companies. As an industry, the expectations of current and future employees are changing. Long term, companies who focus on consistently excellent people management practices that include training, engagement, morale, and strong leadership will be able to maintain a competitive edge and thrive.
Co-founder of the Crest Network
2022 has been a year full of challenges and obstacles. Whether it was dealing with the “new normal” coming out of the COVID crisis, managing your company in an industry morphing through consolidation and change, or navigating the difficult economic realities of inflation and tight labor, you have dealt with many unique struggles this past year. What lies ahead in 2023? Well, with the help of my “crystal ball” and years of experience in both the restoration and financial industries, here is what I think lies ahead.
The upcoming year will continue to have as its underlying theme consolidation. Aside from the private equity money continuing to flow into the space, we will keep seeing strategic partnerships and mergers. This will not be isolated to the restoration company side of the business — insurance carriers, service providers (TPA’s) and brokers will strengthen their positions through acquisitions and power plays. The bigger will grow, and the weak will suffer.
The everyday side of your business — namely, residential water damage — will become more risky next year. The trend on the policy side has been toward higher premiums, higher deductibles, and greater limitations of coverage (and more denials). This all adds up to greater risk for you. If you are a company that gets your money from the carrier (I know, we don’t work for the carrier, we work for the homeowner; that said, we know where the money is coming from in the end), know that you will be doing the work with less assurance that the homeowner’s insurer will be writing checks out like they have been for the past twenty years.
Think back to 2008, the last time our economy suffered through a downturn. As a result of the housing crisis, the number of companies offering restoration services skyrocketed. Thousands of handymen, plumbers and builders stuck a magnet on the side of their truck offering water and fire damage services. Well, with inflation showing no signs of cooling down, my Wall Street brain is telling me that we are in for a rough year. That will cause slowdowns in traditional services and building trades, leading them, once again, to our special space. Look out for the floodgates to open and for your once solid lead source base to be under attack.
There is a mantra on Wall Street that goes something like this: Bulls make money, Bears make money, Pigs get slaughtered. In restoration, this would apply to a company that tries to be everything to everybody. Next year, the most successful companies are not going to be the ones that are unique and crazy in their processes, businesses and operations. Rather, simple will rule the day. Those that can execute their work, bill for it accurately and fairly, and provide great documentation will succeed and thrive. Carriers are getting tired of dealing with companies that are trying to reinvent the wheel and try to prove how smart and clever they are. The other mantra to live by goes like this: Get In, Get Out, and Get Paid!
Above all else, remember that most games are won and lost before the opening play. Plan out your year and set expectations early on. Follow a plan and always keep your head up.