You have become quite successful as the owner of a carpet and upholstery cleaning company.

You have accumulated several pieces of cleaning/extraction equipment, service vehicles/truckmounts, and your client list is significant.

You have employees and your internal systems are efficient.

Your repeat and referral business is strong, and you have a dedicated sales force continuously bringing in new business.

You are profitable.

The next big step
You have, in the past, considered moving into the water damage business.

In fact, you have taken care of some water losses for your regular customers, and you have accumulated some air movers and dehumidifiers.

You have also heard from friends and colleagues in the industry about how well they are doing in the water restoration business.

Many well-run cleaning companies that subcontract to other restoration companies are also often enticed into moving up to the next level.

Although you are not sure how to get started, you have decided that you are ready to take the plunge.

The evolution
Evolving from a carpet cleaning business into a water restoration company is a natural step for many cleaning firms, and there are many who have become very successful in doing so.

Many have also stagnated — without growth — and are caught between both services because of lack of focused effort that is required to compete in this very competitive arena.

This competition is often against some of the largest companies and franchise groups that dominate the field.

To be successful, you must be prepared for a paradigm shift in the way you think, manage, advertise and market to this new, potentially highly profitable market.

You must begin to think with urgency like a restorer and with the business sense of a general contractor.

Proper steps
Having a successful cleaning business is probably the most important factor before taking the plunge.

Steady cash flow and additional revenues to invest in training and equipment are a requirement to be successful in expanding into the water restoration business.

You may consider joining a franchise group that currently has solid relationships with insurance carriers and with national advertising programs in the marketplace.

Or you may consider taking the plunge alone, like many independents do, quite often with much success.

In addition, there are others who market directly to the private sector. These are restoration professionals who choose to work directly for and paid out of the pocket of the owner, as opposed to the insurance industry.

There are many key factors to operating a professional restoration company, including, first and foremost, financial stability.

Counting the costs
Emergency mitigation of a loss is relatively easy.

Doing tear-outs, drying a structure and rebuilding will take more time, more staff, and, often, subcontractors.

You will need the ability to carry the financial load until the job is complete, invoiced and finally paid.

One or two losses are easy to maintain, while five or more losses at the same time can put tremendous pressure on the cash flow — and equipment availability — of a small business.

While you are paying your staff and subcontractors, buying materials, rebuilding and, of course, maintaining your regular overhead, there may be little or no revenue coming in.

Making changes
Creating internal positions and systems for consistent marketing and follow-up are the only ways to ensure a steady flow of business.

Marketing starts with telling your existing customer base that you provide water damage services.

This is an easy way into the water damage industry because these people already know of your company and are satisfied with your service.

This will allow you to contact local insurance agents/ brokers and claims managers to tell them what your company can offer. (See “The brag book” sidebar.)

Positive sources
Other sources of business can be found through plumbing companies and roofers who are often first on the scene of a broken pipe or leak.

Property management companies responsible for multiple properties or apartment complexes are also a great resource for new business.

Basement or foundation repair companies and your local/municipal public works department in charge of the local sewer system, as well as high-rise apartment buildings, can be a gold mine for the water restorer when a water loss occurs on an upper floor, finding its way down to other apartments below.

There are also many cleaning companies that are not interested in providing emergency mitigation services and would provide great referrals.

Be sure to insure
With the exclusion language and limits on mold coverage in homeowners’ insurance policies, most losses are not covered by insurance.

Due to the increase in liability for conducting mold remediation, it has become a requirement for restoration contractors to carry additional insurance coverage such as pollution or environmental liability coverage.

This will provide protection for immediate and future liability against work that is completed as a result of water or mold loss.

Typically, these policies have a $10,000 minimum premium for starters, and will increase as your revenues increase.

If this is coverage that your company needs, inquire with your insurance provider, ask others in the industry or, something not many consider, check the Institute of Inspection, Cleaning and Restoration Certification (IICRC) Certified Firm program, as it offers this coverage through one of its affiliates.

Help wanted
Qualified estimators and supervisors are a necessity to be competitive and profitable.

Estimators need to be familiar with the specific insurance carrier’s policies, estimating/invoicing software, and know the adjusters that evaluate the losses.

Supervisors need to be at ground level, and have water damage restoration certifications.

Crew chiefs and technician level employees must have at least the basic water restoration certification classification training to safely and effectively mitigate a loss.

All of these positions can be fulfilled by overlapping positions in the beginning. But as your company grows, you and your employees may grow weary.

Effectively handling multiple losses on your own will keep you busy 24 hours a day.

The manpower to handle multiple jobs per day, and a large stock of drying equipment, will be obstacles you can overcome with a lot of hard work, dedication and money.

Setting the price
Having estimating software is something that most insurance carriers require.

Many large restorers may have one or more software programs to satisfy different insurance carriers.

Regardless of the program you use, detailed, cost-effective estimating and invoicing can only be consistently accomplished with a software program in place.

The hours spent creating an invoice for an average loss can be cut drastically, saving both time and money.

The detailed line items on software programs also guarantee that you are charging for all of the services and materials used. This adds to your revenues.

Finishing up
After the emergency mitigation of a water loss is done, evaluation of materials and contents must follow.

Daily monitoring of the drying process must be accomplished and recorded on appropriate forms. This helps to determine and guarantee the decline in moisture levels to a pre-loss condition.

Daily monitoring visits to the loss should be done by certified technicians who understand psychrometry.

Insurance carriers accept this practice and cover the costs, providing that thorough documentation is submitted with your invoice.

Once the structure is dry, rebuilding can take place.

This can be another good source of income for many restorers.

Replacing sheetrock, base and door trims, and painting are some of the usual reconstruction activities that are needed after a loss.

Don’t give up
For cleaning companies that aspire to enter into the water damage business, you can be successful with a persistent and dedicated effort.

There are losses happening right now all over the world in need of dedicated and trained professionals.

Is your company ready to take that plunge?

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Carey Vermeulen has 25 years of experience in the cleaning and restoration industry, specifically in the Toronto area. He is the immediate past president of the IICRC and currently director of education for Indoor Environmental Management Inc., Indianapolis. He is an IICRC-approved instructor for AMRT, WRT, FSRT, OCT and RRT. He can be reached at (905) 649-3545 or glencary@allstream.net.