No Disasters Anywhere-So You Are Slow?

It's Slow You Say.

OMG-No Disasters Anywhere?

Well, Just Maybe Your Competitor is Having the Best Year of His Life.

Wouldn't that just suck. Here you are looking at accounts receivable, praying that the promised check really is in today's mail or at least in by payday, and then you see your competitor bragging about his new boat. His "best year ever". Well, it can't be because, "it's slow".

As insurance company actuaries have made a science out knowing the number of disasters in a given area, it might just be that your "slow times" are the other guys heyday.

The disaster industry is a numbers industry. Disasters don't stop because you have offended the "Gods of the Disaster Marketing Grand Scheme of Life".

Someone is getting the work you want. The hard honest truth is, if you are slow, a competitor of yours is busy.

I spent decades flying around the USA in small aircraft going in after commercial/industrial losses. I flew into towns, that were too small to have a local franchise or maybe just one or two.

My point is not that you have to go out and spend a million bucks on a aircraft

Or have full page color ads in Claims Magazine, Risk Manager Magazine, Disaster Management Magazine etc.

Decide on what you love to do in the restoration business.

What would be your best ever day?

Go for it!

We would clobber the local guys and they would not even know we were in their town.

We took the big losses that they dreamed of.

Why, because we understood the commercial/industrial client.

Their needs have nothing to do with crews numbers, patches on the crew chief's arms and 6 letters behind each of their names because they went to 6 days of training.

Local restoration companies would not even know that I was in their town. Sometimes for many months at a time.

I decided that I wanted to handle only large industrial/commercial losses. That's what I loved, and I went after them. For over a quarter of a century.

Now, I'm retired and a consultant with restoration company owners.

No-800 pound gorillas. I want to level the playing field.

Any of the 12,500 restoration companies in the US can clean a carpet, a couch, a small kitchen fire or an apartment. What separates them from their competitor? Quality? Price?

Xactimate pricing and insurance company program work?

If that's what you love then do it!

However, how good can you really clean a couch? And save the insurance company how much? And they pay you how much? And your competitor can dry the home in 3 days or just not charge for the other days they have equipment and crews on site because the insurance company is a nice guy and deserves a break.

Insurance companies care about money. That's it!!! They would rather not pay you for the 4th day of drying equipment, and you cry, and pout, however, the insurance company knows the numbers. If they have a million home owner claims a year, and if each one took 4 days to dry, it would be at least another $100 in equipment rental and manpower per home. So 'your' $100. times their million claims, saves them $100,000,000 a year. So cry. They don't really care. There is always a new restoration guy that begs for the chance. "Send me in coach- I'll dry that carpet in 3 days- I swear I will."

Then a new kid comes in and charges less and the program insurance company drops you like a hot potato and uses them.

Insurance restoration is a numbers game. If you only go after doctor's offices because you once made $12,500 on one, then you decide to put on a sales person at $45,000 a year to see 3 doctors offices a day for 300 days a year and the chance of a major loss is 1 in 1,000 then you might get lucky and get 3 $12,500 losses in one year and almost pay her out of pocket costs.

Now, look at large commercial losses. Walmart had 6,000 stores, with an average of 75,000 sq ft per store. There was a good chance that one would have a loss every week/ 1/6000 per week and maybe a major loss a quarter. Now that many square feet made it profitable to spend some time going after them as a client.

We did over 230 losses for Walmart, and then a bunch for Sears, Lord & Taylor, May Company, Dillards, G-Fox, Robinson May and hundreds of factories and malls to boot. (Don't go to Bentonville and bug poor Dale. He has enough vendors knocking his door down.)

It's a numbers game. If you go for ones and twos- then you might get one or two. If your prospect has 40,000,000 sq ft under their control, then the chance is better they will have a 6 or 7 figure restoration loss every year.

Commercial losses are special because the company can go out of business if they don't reopen soon.

Remember, Business Interruption insurance covers loss of profit for each day down, not loss of market share.

Just look at the disaster restoration business the way a risk manager or insurance actuaries does.

• What are the most valuable assets?
• What must be kept in operation for the company to survive at all, what can they afford to lose and stay in business?
• How much do they lose per hour shut down?
• How many customers will be turned away if they don't open back up per day or accounts that they will lose? Once a customer is gone-they may be gone for good.
• Will they be one of the 40% that do not reopen after a disaster or 90% that fail within 2 years after a major loss? (1)

Then come up with a brilliant plan to sell the commercial client on your services 6 months before they need you. After all their company's life is at stake. And you could be their savior. For that they may pay you millions. I can help ya.

Or just cut your residential prices low enough that the vendor program loves you. At least until another guy comes in hungrier and cheaper

Happy Hunting

Jim

Jim Thompson

727 424 2000

www.jimthompsonco.com

(1)"Forty percent of businesses do not reopen after a disaster and another 25 percent fail within one year according to the Federal Emergency Management Agency (FEMA). Similar statistics from the United States Small Business Administration indicate that over 90 percent of businesses fail within two years after being struck by a disaster.

https://www.chamber101.com/2programs_committee/natural_disasters/disasterpreparedness/Forty.htm 5-10-17