Shelter your profits from the storm
Hurricanes, floods, tornadoes, and countless other destructive weather events cost billions of dollars in damage in North America every year. Specifically, storm damage accounted for more than $110 billion in 2012 alone. These storms leave devastating footprints that take communities years to recover.
In the aftermath of a damaging storm, you might be one of the first responders providing homeowners’ services such as tarping roofs and boarding windows and doors in order to prevent further damage to a home. Why? Maybe this is part of your business plan, then again, maybe it’s not. Perhaps, it’s because you have a connection to the community. You want to help your neighbor, past client, or someone you’ve never seen before who desperately needs your professional help in an emergency.
In a recent poll conducted by Professional Remodeler, more than half of the remodelers who responded said they have dealt with large volumes of storm-related repairs and remodeling.
However, 54 percent of survey respondents view storm-related repair and remodeling work as carrying an enhanced risk of profit slippage.
Then why do remodelers take on these jobs?
Professional Remodeler asked Sal Ferro, president and CEO, Alure Home Improvements, Plainview, N.Y., this question when we visited his offices this summer to discuss how his company responded to Hurricane Sandy in 2012.
Ferro told Professional Remodeler, “Perhaps the most important aspect of our storm-related work was helping Long Island recover [from Hurricane Sandy] as opposed to profiting from a big business boom. I don’t want to make a living on the back of other people’s disasters.”
Of course, there are remodelers who do respond to storm-related work because it makes up part of their business model. They offer a professional service and they must be able cover their expenses and more.
Greater than 80 percent of remodelers who responded to our survey indicated they increase their gross margin by as much as 15 percent or more to hit their target net-profit for storm-related work. As you know, storm-related work can present a sizeable risk to your business; however, the flip side is that it can also present an excellent opportunity for longer-term growth.
Professional Remodeler designed this special issue with an editorial package dedicated to storm response to help you prepare your remodeling business for the next big storm.
We tapped into the industry’s leading professionals to profile how they manage storm response; we offer exclusive tips for dealing with insurance companies; and we examine how to differentiate your company from the quick-buck crews that take advantage of unsuspecting homeowners. We also include a profile on Ferro and his company detailing how they managed emergency-response efforts to Hurricane Sandy while ensuring their own employees remained safe during and after the storm.
Also, be sure to visit our website for additional exclusive editorial content as well as a series of videos from remodelers who responded to Hurricane Sandy.
If your company wants to pursue storm-related work, you must first perfect your business plan before helping out clients and the community. This issue is step one of that business plan.