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How to Start a Water Restoration Company

A water restoration business is a company that specializes in mitigating and restoring properties that have been affected by water damage. Water damage can occur due to various reasons such as floods, plumbing leaks, burst pipes, storms, or fire suppression efforts.

The primary goal of a water restoration business is to assess the extent of the water damage, remove excess water from the property, and restore it to its pre-damage condition. These companies have expertise in handling water extraction, drying, dehumidification, mold remediation, and repairs of water-damaged structures and belongings.

The water restoration business belongs to the restoration industry and available data shows that the global disaster restoration services market is expected to reach a valuation of US$ 41.2 billion. The market size of the Damage Restoration Services industry in the US has grown by 1.1% per year on average between 2017 and 2022.

Steps on How to Start a Water Restoration Business

  1. Conduct Market Research

Conducting market research is an important step in establishing a water restoration business. It helps you understand your target market, assess competition, identify customer needs, and make informed business decisions. Start by clarifying your research goals.

Determine what specific information you need to gather and how it will benefit your business. For example, you may want to understand the demand for water restoration services in your area, identify the target market segments, or evaluate customer preferences.

Determine the geographical area you plan to serve and identify your potential customers. This can include homeowners, businesses, insurance companies, or property managers. Consider factors such as demographics, income levels, and property types to define your target market more precisely.

Conduct one-on-one interviews with potential customers, industry experts, or professionals in related fields. This can help you gain deeper insights into their needs, challenges, and preferences. Based on your research findings, define your unique selling points.

Identify what sets your water restoration business apart from competitors and how you can position yourself to meet the needs of your target market effectively.

Finally, use the insights gained from your market research to make informed decisions about your business strategy, marketing plan, pricing, service offerings, and customer targeting. Regularly update your research to adapt to changing market conditions and customer preferences.

a. Who is the Target Market for Water Restoration Business?
  • Homeowners who experience water damage due to burst pipes, flooding, leaks, or other water-related issues
  • Property managers
  • Commercial establishments, such as offices, retail stores, restaurants, hotels, and industrial facilities.
  • Insurance companies
  • Government entities.
b. Is the Water Restoration Business a Profitable Business?

Yes, the water restoration business is a profitable business. Available data shows that the global disaster restoration services market is expected to reach a valuation of US$ 41.2 billion.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the water restoration business because the water restoration business is a niche idea in the disaster restoration services industry.

d. Who are the Major Competitors?
  • Servpro
  • ServiceMaster Restore
  • DKI (Disaster Kleenup International)
  • Rainbow International
  • BELFOR Property Restoration
  • PuroClean
  • Paul Davis Restoration
  • Steamatic
  • Roto-Rooter Water Restoration
  • American Technologies, Inc. (ATI)
  • DriTech Restoration Services
  • 1-800 WATER DAMAGE
  • Interstate Restoration
  • Action Restoration
  • AdvantaClean
  • Blackmon Mooring & BMS CAT
  • Mammoth Restoration & Cleaning
  • Jenkins Restorations
  • Cotton GDS
  • United Water Restoration Group.
e. Are There County or State Regulations or Zoning Laws for Water Restoration Businesses?

Yes, there can be county or state regulations and zoning laws that apply to water restoration businesses in the United States. However, it’s important to note that regulations and zoning laws can vary significantly depending on the specific location.

Each state and county may have its own set of regulations and requirements that businesses must comply with. Water restoration businesses often deal with potentially hazardous materials, such as mold, asbestos, or chemicals used for cleaning and disinfection.

Environmental regulations may govern the proper handling, disposal, and containment of these materials to protect public health and the environment.

Zoning regulations determine where different types of businesses can operate within a specific area. Some locations may have zoning restrictions that dictate whether a water restoration business can be established in a particular zone, such as residential, commercial, or industrial.

It’s important to check with the local zoning authority or planning department to ensure compliance with zoning regulations.

f. Is There a Franchise for Water Restoration Business?

Yes, there are franchise opportunities for water restoration business, and here are some of them;

  • Servpro
  • ServiceMaster Restore
  • PuroClean
  • Paul Davis Restoration
  • 1-800 WATER DAMAGE
  • AdvantaClean
  • Delta Restoration Services
  • Dry Patrol
  • Restoration 1
  • DriTech Restoration Services.
g. What Do You Need to Start Water Restoration Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • A Good Office facility
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Cleaning Supplies and Equipment
  • Employees
  • Startup Capital
  1. 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 a water restoration business are;

Creative Water Restoration Business Name ideas
  • Osborne Ernest® Water Restoration Services, LLC
  • Kingsley Reedman® Water Restoration Services, LLC
  • Erick Nordan© Water Restoration Services, Inc.
  • Fix Pro® Water Restoration Services, Inc.
  • James Lance® Water Restoration Services, Inc.
  • Tim Israel™ Water Restoration Services, LLC
  • Revamp© Water Restoration Services, LLC
  • Samuel Martins® Water Restoration Services, Inc.
  • Goodie Fingers® Water Restoration Services, Inc.
  • Dexter Jobs™ Water Restoration Services, Inc.
  • Tyson Holyfield™ Water Restoration Services, LLC
  • Fix Up© Water Restoration Services, Inc.
  • Dennis Greene® Water Restoration Services, Inc.
  • Helem Group™ Water Restoration Services, LLC
  • Aqua Guys© Water Restoration Services, Inc.
  • Victor Maddison™ Water Restoration Services, LLC
  • Richards Simons® Water Restoration Services, Inc.
  • Ruther Guys™ Water Restoration Services, LLC
  • Tony Mario® Water Restoration Services, Inc.
  • Jones Barkley© Water Restoration Services, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Water Restoration Business?

The ideal business structure for a water restoration company is determined by a variety of factors, including the size of the company, the number of owners, the level of personal liability the owners are ready to accept, and the tax consequences of the various business structures.

However, we normally recommend a limited liability company structure. An LLC is a hybrid corporate form that provides the flexibility of a partnership while also providing its owners with limited liability protection. An LLC can have one or more owners, and the owners are not personally accountable for the debts or liabilities of the business. This business form is frequently used by small to medium-sized organizations.

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 Start Water Restoration Business?
  • General Business License
  • Zonal Permits
  • Signage Permit
  • Sales tax permit
  • Chemical handling permit
  • Environmental permits.
d. What Type of Certification is Needed to Start Water Restoration Business?

In reality, you don’t need any special certifications to start a water restoration business but you can work towards owning one or more of the following certifications;

  • Institute of inspection cleaning and restoration certification – IICRC
  • International janitorial cleaning services certification – IJVSC
  • House cleaning technician certification – HCT
  • Cleaning business owner certificate – CBO
e. What Documents are Needed to Start Water Restoration Business?

These are some of the basic legal documents that you are expected to have in place if you want to legally run a water restoration business in the United States of America;

  • DBA
  • EIN
  • 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
  • Sales tax permit
  • Chemical handling permit
  • Environmental permits
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

For a water restoration business, you may need to consider trademark protection, copyright protection, and potentially patent protection, depending on the specific circumstances and offerings of your business. It’s important to consult with an intellectual property attorney or legal professional with expertise in intellectual property law to assess your specific business offerings and determine the appropriate protection strategies you need.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start Water Restoration Business?

The cost required to start a water restoration business may vary significantly. But on average, you can budget as low as $5,000 to as much as over $100,000 to start your water restoration business.

b. What are the Costs Involved in Starting a Water Restoration Business?
  • Business Registration Fees – $750.
  • Legal expenses for obtaining licenses and permits – $1,300.
  • Marketing, Branding, and Promotions – $2,000.
  • Business Consultant Fee – $2,500.
  • Insurance – $1,400.
  • Rent or lease – $50,000
  • Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
  • Operational Cost (salaries of employees, payments of bills et al) – $45,000
  • Equipment and start-up inventory – $15,000
  • Store Equipment (cash register, security, ventilation, signage) – $1,750
  • Website: $850
  • Opening party: $3,000
  • Miscellaneous: $3,000
c. What Factors Determine the Cost of Starting a Water Restoration Business?
  • The size of the water restoration business
  • The choice of location
  • The required licenses and permits
  • The type of additional services offerings
  • The cost of hiring and paying a business consultant and attorney
  • The cost of branding, promotion, and marketing of the water restoration business
  • The cost of furnishing and equipping the water restoration facility
  • The cost of the insurance policy covers
  • The cost of registering the business
  • Cost of recruiting and training your staff
  • The cost of the purchase and customizing of uniforms
  • The cost for the grand opening of the water restoration business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

No, it is not compulsory to build new facilities for your water restoration business. You just need a budget-friendly office to start the business because your services will be deployed in your client’s facilities.

e. What are the Ongoing Expenses of the Water Restoration Business?
  • Payroll and labor costs
  • Equipment and supplies
  • Insurance
  • Vehicle expenses
  • Marketing and advertising
  • Rent or mortgage
  • Licensing and permits
  • Training and certifications
  • Professional services
  • Miscellaneous expenses.
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (Owner) – $65,000 per year
  • Project Manager – $45,000 per year
  • Technicians – $38,000 per year
  • Administrative Staff – $35,000 per year
  • Support Personnel- $30,000 per year
g. How Do You Get Funding to Start Water 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
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

Fix Up© Water Restoration Services, Inc. is a Miami, Florida-based water restoration business dedicated to providing high-quality restoration services to residential and commercial clients. With our team of experienced professionals and state-of-the-art equipment, we are committed to helping our clients recover from water damage and restore their properties to pre-loss conditions.

We are prepared to be the leading provider of water restoration services in and around Miami, Florida. We aim to achieve this by delivering exceptional customer service, employing industry best practices, and utilizing innovative technologies to streamline our restoration processes.

We prioritize customer satisfaction and strive to exceed our client’s expectations. Our team is committed to clear and timely communication, transparent pricing, and providing personalized solutions tailored to each client’s unique needs.

b. Products and Service

We offer a wide range of water restoration services, including water extraction, drying and dehumidification, mold remediation, odor control, and structural repairs. Our skilled technicians are trained to handle any size or complexity of water damage.

c. Mission Statement

At Fix Up© Water Restoration Services, Inc., our mission is to provide exceptional water restoration services that help our clients recover from water damage and restore their properties to their pre-loss condition. We are committed to delivering superior customer service, utilizing advanced techniques and equipment, and prioritizing the well-being and satisfaction of our clients.

Vision Statement

Our vision at Fix Up© Water Restoration Services, Inc. is to be the trusted leader in the water restoration industry, known for our professionalism, expertise, and dedication to excellence. We strive to set the highest standards in the industry, continuously innovate our practices, and be recognized as the go-to provider for water restoration services in our target market.

d. Goals and Objectives

The goals and objectives of the water restoration business are to assess the extent of the water damage, remove excess water from the property, and restore it to its pre-damage condition.

e. Organizational Structure
  • Chief Executive Officer (Owner)
  • Project Manager
  • Technicians
  • Administrative Staff
  • Support Personnel.

Marketing Plan

a. SWOT Analysis
  • Highly skilled and certified professionals with extensive knowledge and experience in water restoration services.
  • Utilization of advanced equipment and technologies for efficient and effective restoration processes.
  • A positive reputation built on delivering high-quality services and exceptional customer satisfaction.
  • Ability to provide rapid response and 24/7 availability to address water damage emergencies promptly.
  • Strong relationships with insurance companies, property management firms, and other industry stakeholders for referrals and collaborative opportunities.
  • Limited coverage area that may restrict potential customer reach.
  • Difficulty in finding and retaining skilled technicians due to industry competition and specific skill requirements.
  • Vulnerability to fluctuations in weather patterns and the occurrence of natural disasters impacting business demand.
  • Explore opportunities to expand into new geographical areas with a high potential for water damage incidents.
  • Offer additional related services, such as mold remediation, fire damage restoration, or biohazard cleanup, to cater to a broader customer base.
  • Leverage digital platforms to increase brand visibility, generate leads, and engage with potential customers.
  • Strengthen partnerships with local contractors, plumbers, and property managers to increase referral business.
  • The presence of established competitors in the water restoration industry
  • Economic downturns or fluctuations in the housing market
  • Adapting to changing regulations and compliance requirements, such as environmental regulations or licensing updates, can pose challenges.
b. How Do Water Restoration Companies Make Money?

Water restoration companies generate revenue by offering a wide range of water restoration services, including water extraction, drying and dehumidification, mold remediation, odor control, and structural repairs.

c. Payment Options
  • Credit and debit cards
  • PayPal
  • Apple Pay and Google Wallet
  • Gift cards and store credit
  • Installment payments
  • Cash on delivery of services.
d. Sales & Advertising Strategies
  • Establish strong relationships with local insurance companies and adjusters.
  • Attend industry events, network, and provide exceptional service to earn their trust and referrals.
  • Create a user-friendly website that showcases your services, expertise, and customer testimonials. Include clear contact information and request for a quote form.
  • Utilize social media platforms to share helpful tips, before-and-after project photos, and client success stories, and engage with the community.
  • Send targeted emails to homeowners, property managers, and businesses in your local area
  • Encourage satisfied customers to leave positive reviews on platforms like Google, Yelp, and social media.
  • Implement a referral program to incentivize existing clients, insurance agents, contractors, or other relevant professionals to refer your services to their network.
  • Consider advertising in local newspapers, industry publications, or home improvement magazines to reach your target audience effectively.
  • Collaborate with local emergency services, such as fire departments or plumbers, to be included in their emergency response referral list.
  • Attend industry conferences, trade shows, and local networking events to connect with professionals in related fields, such as property managers, plumbers, or real estate agents.
  • Provide top-notch customer service throughout the restoration process. Satisfied customers are more likely to refer your services to others.

Financial Projection

a. How Much Should You Charge for Your Service?

Water Extraction: The cost for water extraction services can range from $500 to $3,000 or more, depending on the severity of the water damage and the size of the affected area.

Drying and Dehumidification: The cost for drying and dehumidification services typically ranges from $1,500 to $6,000 or more, depending on the square footage and complexity of the drying process.

Mold Remediation: If mold is present, additional costs for mold remediation may apply. Mold remediation costs can range from $500 to $10,000 or more, depending on the extent of the mold growth and the size of the affected area.

Structural Repairs: If the water damage has caused structural damage to the property, the cost of repairs will depend on the extent of the damage and the necessary materials and labor.

b. How Much Profit Do Water Restoration Business Owners Make a Year?

The profit that water restoration business owners make can vary significantly depending on various factors such as the size of the business, the geographical location, the level of competition, and the overall demand for water restoration services.

Additionally, factors like operational efficiency, pricing strategies, and the ability to manage expenses can also impact the profitability of the business.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the water restoration business
  • The types of additional services offered
  • The location of the water restoration business
  • The management style of the water restoration business
  • The business approach of the water restoration business
  • The advertising and marketing strategies adopted by the water restoration business.
  • The number of years the water restoration business is in business
d. What is the Profit Margin of a Water Restoration Business?

Typically, the profit margin for a cleaning business ranges from 10 percent to 30 percent of the gross revenue. However, for a water restoration business, the profit margin may be slightly lower due to the competitive pricing and higher overhead costs.

e. What is the Sales Forecast?

Below is the sales forecast for a water 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): $460,000
  • Third Fiscal Year (FY3): $550,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for Water Restoration Business?
  • The demography of the location
  • Accessibility of the location
  • The number of water restoration companies and real estate facilities in the location
  • The local laws and regulations in the community/state
  • Traffic, parking, and security et al
b. What State and City is Best to Start a Water Restoration Business?
  • New Orleans, Louisiana
  • Houston, Texas
  • Miami, Florida
  • Sacramento, California
  • Fargo, North Dakota
  • Charleston, South Carolina
  • Baton Rouge, Louisiana
  • Cedar Rapids, Iowa
  • Nashville, Tennessee
  • Des Moines, Iowa.
c. What Equipment is Needed to Operate a Water Restoration Business?
  • Water Extractors
  • Dehumidifiers
  • Air Movers
  • Moisture Detection Tools (Moisture meters, infrared cameras, and thermal imaging equipment)
  • Air Scrubbers
  • Structural Drying Equipment
  • High-Efficiency Particulate Air (HEPA) Vacuums
  • Personal Protective Equipment (PPE) such as gloves, goggles, respirators, coveralls, and boots
  • Moisture Barrier Systems
  • Cleaning and Disinfection Supplies.
  1. Hire Employees

If you are looking to start a standard water restoration company, then you need to hire at least a handful of employees that can man different key positions in the organization. You should also make provisions to hire contract staff (cleaners and handymen) whenever you have a water restoration contract that you and your staff members may not be able to handle.

  1. Launch the Business Proper

You may decide to start a water restoration business without organizing any special launch party. However, if you want to create hype around the business, and announce your name in a big way in the industry, then it is advisable to organize a launch party to officially open your business.

a. What Makes the Water Restoration Business Successful?
  • Choose good locations to launch the business
  • Make sure your partner with key stakeholders and offer a wide range of services and support (give your customers options)
  • Throw an open house grand party before officially starting the water restoration business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your water restoration business
  • Leverage all available online and offline platforms to promote your water restoration business
b. What Happens During a Typical Day at a Water Restoration Business?
  • The business is open for the day
  • Staff resume and are deployed to locations or project sites to carry out water restoration services and necessary repair works
  • Administrative work is done concurrently
  • Stocking of cleaning and other supplies are done
  • The office is administratively closed for the day.
c. What Skills and Experience Do You Need to Build Water Restoration Business?
  • Excellent technical (repairing) and cleaning skills
  • Excellent customer services skills
  • Interpersonal skill
  • Accounting and bookkeeping skills
  • Business management skills
  • Bargaining skill
  • Work experience in the water restoration services industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling different types of water restoration equipment and tools.