An insurance restoration company is a business that pays for the repairs on a home or business in the event of a fire, natural disaster, water, or mold. Please note that a customized insurance program for restoration provides hard-to-find coverages, including environmental liability at incredibly affordable prices.
Available data shows that the American restoration industry has grown to an astonishing $210 billion annual market due to several factors, including aging American homes and infrastructure, worsening storms, the influx of wildfires, and frequent flooding.
Steps on How to Start an Insurance Restoration Business
Conduct Market Research
The first step in the market research process for your insurance restoration business is to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source information that will help you maximize your business, information that will help you operate your insurance restoration business with less stress, and of course, build the business to profitability within the shortest time frame.
a. Who is the Target Market for an Insurance Restoration Business?
- Property owners
- Facility managers and Caretakers
- Estates and communities.
b. Is Insurance Restoration Business a Profitable Business?
Yes, the insurance restoration business is quite profitable. Currently, the restoration industry is worth about $210 billion and it looks to grow even more in the years ahead.
c. Are There Existing Niches in the Industry?
There is no niche area in the insurance restoration business.
d. Who are the Major Competitors?
- BELFOR Property Restoration
- Whalen Restoration Services Inc.
- Insurance Restoration Specialists, Inc.
- American Building Contractors Insurance Restoration Services, Inc.
- First Restoration Services
- Allied Restoration Services
- New Life Restoration
- MacKenzie Restoration, Inc.
- Platinum Restoration
- Delta Restoration Services® of Denver
- NorthStar Restoration Services
- Guarantee Restoration Services, LLC
- McMahon Services & Construction Corp
- DriForce Property Restoration
- American Restoration Inc.
- EHS Restoration
- Synergy Claims USA
- C. Restoration (BluSky Restoration Contractors)
- Capital Restoration Services of Atlanta
- ServiceFirst Restoration Inc.
e. Are There County or State Regulations or Zoning Laws for Insurance Restoration Business?
No, there are no county or state regulations or zoning laws for insurance restoration businesses, but players in this industry are expected to work with the existing regulations governing similar businesses in the county where their business is domiciled.
f. Is There a Franchise for Insurance Restoration Business?
No, there are no franchise opportunities for insurance restoration businesses.
g. What Do You Need to Start an Insurance Restoration Business?
- A Feasibility Report
- Business Plan
- Licenses and Permits
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Office Facility
- Startup Capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for an insurance restoration business are;
Creative Insurance Restoration Business Name ideas
- Michael Morgan© Insurance Restoration Company, Inc.
- Clement Waldorf® Insurance Restoration Company, Inc.
- Curtis Jackson© Insurance Restoration Company, Inc.
- Gordon Jones® Insurance Restoration Company, Inc.
- Macalister Jonah™ Insurance Restoration Company, Inc.
- Anthony Lawson™ Insurance Restoration Company, LLC.
- James Kingston© Insurance Restoration Company, LLC
- Tuchel Adams® Insurance Restoration Company, Inc.
- Maiden Gang© Insurance Restoration Company, Inc.
- Larry Cage© Insurance Restoration Company, Inc.
- Tyson Ray® Insurance Restoration Company, Inc.
- Irene Emmanuel® Insurance Restoration Company, Inc.
- Wendy Thomas® Insurance Restoration Company, Inc.
- Tyler Moses® Insurance Restoration Company, Inc.
- Golan Heights® Insurance Restoration Company, Inc.
- Remigius Hyacinth© Insurance Restoration Company, Inc.
- Thomas Curry™ Insurance Restoration Company, LLC
- Brooklynn City® Insurance Restoration Company, Inc.
- Barry Knawels® Insurance Restoration Company, Inc.
- Mendy Fuller™ Insurance Restoration Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for Insurance Restoration Business?
Although there are options when it comes to the business structure of an insurance restoration business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open an Insurance Restoration Business?
- General Business License
- Health and Fire Safety Permit
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections (If you have an office)
d. What Type of Certification is Needed to Open an Insurance Restoration Business?
In reality, you don’t need any special certification to start an insurance restoration business.
e. What Documents are Needed to Open an Insurance Restoration Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting an insurance restoration business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start an Insurance Restoration Business?
When it comes to starting an insurance restoration business, the startup costs range from $80,000 to $200,000 and higher depending on how much equipment the business owner decides to purchase. Please note that this amount includes the salaries of all the staff for the first month of operation.
b. What are the Costs Involved in Starting an Insurance Restoration Business
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $3,300.
- Marketing, Branding and Promotions – $2,000.
- Business Consultant Fee – $2,500.
- Insurance – $12,400.
- Rent/Lease – $80,000.
- Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $130,000
- Start-up Inventory (cleaning chemicals and materials) – $10,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Working Capital – $100,000
- Website: $600
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening an Insurance Restoration Business?
- The choice of location
- The required licenses and permits
- The type of office facility
- The additional services offerings
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the insurance restoration business
- The cost of furnishing and equipping the insurance restoration business
- The cost of insurance
- The cost of registering the business
- Ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
You don’t need to build a facility for your insurance restoration business because you are expected to offer your services to people outside your environment. You may just decide to operate from a small office space.
f. What are the Ongoing Expenses of an Insurance Restoration Business?
- Utility bills (internet, phone bills, signage and sewage et al)
- Marketing and branding
- Salaries of employees
g. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $75,000 per year
- Claims Experts – $38,500 per year
- Accountants (Cashiers) – $35,000 per year
- Restoration Technicians – $30,000 per year
- Customer Service Executive – $26,150 per year.
h. How Do You Get Funding to Start an Insurance Restoration Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Macalister Jonah™ Insurance Restoration Company, Inc. is a licensed insurance restoration company that will provide our services to a wide range of clientele. The business will be located in Los Angeles, California and we will cover other neighboring cities.
We chose to operate in this city because we know that our services will be in high demand due to the growing activities in the real estate and construction industry. We are quite optimistic that our values and quality of service offering will help us drive our insurance restoration business to enviable heights and also help us attract the number of clients that will make the business profitable.
b. Products and Service
We will operate an insurance business that pays for the repairs on a home or business in the event of a fire, natural disaster, water, or mold.
c. Mission Statement
Our mission is to establish an insurance restoration business that will create a standard of excellence in the industry. We want to grow our insurance restoration business to be listed amongst the top 10 insurance restoration businesses in the United State within the first 5 years of launching the business.
Our vision is to establish a standard and world-class insurance restoration business that will be the “go-to” insurance restoration company in the United States of America.
d. Goals and Objectives
The goals and objectives of the insurance restoration business are basically to pay for the repairs on a home or business in the event of a fire, natural disaster, water, or mold.
e. Organizational Structure
- Chief Executive Officer (Owner)
- Claims Expert
- Accountants (Cashiers)
- Restoration Technicians
- Customer Service Executive
a. SWOT Analysis
- Excellent operational history
- Attention to detail.
- Accurate estimates with no hidden costs.
- Experience and trained professionals.
- Excellent customer testimonials.
- Reliable and efficient service delivery.
- Not enough existing clientele to run at full capacity immediately
- The owner is new to large scale marketing
- We will need a loan to start the business
- Lack of economies of scale.
- Increase in aging American homes and infrastructure, worsening storms, the influx of wildfires, and frequent flooding.
- Robust real estate market
- Build upon existing clientele
- Online market, new services, new technology, and of course the opening of new markets.
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The environmental department could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Insurance Restoration Companies Make Money?
An insurance restoration business makes money from premiums paid by clients.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your insurance restoration business and the services your offer by sending introductory letters alongside your brochure to realtors, facility managers, landlords, and other key stakeholders throughout the city where your business is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your services
- Provide discount days for your customers
- Advertise your business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
The amount an insurance restoration business charges is dependent on the magnitude of restoration services to be carried out, and of course the size of the facility. For major restoration work, such as a rebuild, they charge $10,000 (on average) and the profit margin can be as high as 50%.
b. How Much Profit Do Insurance Restoration Business Owners Make a Year?
The amount an insurance restoration business owner is expected to make is not fixed and it will depend on some factors. For major restoration work, such as a rebuild, they charge $10,000 (on average) and the profit margin can be as high as 50%. If you dig deeper into the figures, you will only need about 300 mitigation projects (small jobs) in a year to earn a $75,000 revenue.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the insurance restoration business
- The location the insurance restoration business is covering
- The management style of the insurance restoration business
- The business approach of the insurance restoration business
- The advertising and marketing strategies adopted by the insurance restoration business
- The number of years the insurance restoration business is in business
d. What is the Profit Margin of an Insurance Restoration Business?
The profit margin of an insurance restoration business is not fixed. It can range from 25 percent to 50 percent depending on the nature of the job to be carried out and of course the time, materials, equipment, and tools required to carry out the contract.
e. What is the Sales Forecast?
Below is the sales forecast for an insurance restoration business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year (FY1): $350,000
- Second Fiscal Year (FY2): $480,000
- Third Fiscal Year (FY3): $650,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Insurance Restoration Business?
- The demography of the location
- The demand for the services of insurance restoration businesses in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of insurance restoration businesses in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open an Insurance Restoration Business?
- San Antonio, Texas
- Cambridge, Massachusetts
- Chattanooga, Tennessee
- Lewiston, Maine
- Grand Rapids, Michigan
- Chandler, Arizona
- Colorado Springs, Colorado
- Philadelphia, Pennsylvania
- Warwick, Rhode Island
- Mount Pleasant, South Carolina
- Los Angeles, California
c. What Equipment is Needed to Operate an Insurance Restoration Business?
- Software Apps
- Office Furniture
- Utility Truck for inspection.
When it comes to hiring employees for a standard insurance restoration business, you should make plans to hire a competent manager (you can occupy this role), claims expert, accountant, restoration technicians, and customer services, executive.
Launch the Business Proper
In recent times, no insurance restoration company opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the insurance restoration business, you will officially inform people in your city that your insurance restoration business is open for business.
a. What Makes an Insurance Restoration Business Successful?
- Choose a good location and reliable equipment to launch the business
- Partner with insurance companies, facility managers, and realtors
- Hire only competent, hardworking, and trustworthy staff
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your insurance restoration business
- Leverage all available online and offline platforms to promote your insurance restoration business.
b. What Happens During a Typical Day at an Insurance Restoration Business?
When they resume work each day, the staff or marketing team goes out to source for business. Before a deal is sealed, the insurance restoration company is expected to carry out an inspection of the location and the nature of the job to be carried out.
This will enable them to know the amount required to complete the job. Once a deal is sealed, the insurance restoration company goes out there to source for the right contractor that will carry out the job and they get paid once the job is done.
The business is closed for the day.
c. What Skills and Experience Do You Need to Build an Insurance Restoration Business?
- Ability to Pay Attention to Details
- Good managerial and human development skills
- Good Accounting and Bookkeeping Skills
- Visionary Leadership
- Team-building & Interpersonal Skills.
- Excellent communication and negotiation skills.
- Organizational skills.
- Problem-solving ability.
- Good Supervisory skills
- Experience in the insurance restoration industry
- Experience in managing people
- Experience in business administration.