Restoration a new era
December 1st 2004

Chris Netherton, BDMA Senior Technician talks about the challanges facing the flood restoration industry

I formed the National Flood School in 1987. My reasons in those days were to establish my distribution and rental business, which was a new venture for my well established tool and plant hire business. I had foreseen and experienced greatly enhanced profits from long term hire after water damage, often from builders who knew little of intelligent drying or even how to measure when the building was dry.

Quotes like these were common, The dehumidifier is not collecting any water so the building must be dry, The customer is fed up with the noise and wants the machines removed; In my experience all buildings are dry after 4 weeks rental.

In terms of the water damage restoration industry the traditional hire system of charging on a time out basis has nearly disappeared. Negotiations by national contractors and franchises have lead to a new method of charging. This is charging by area affected in an otherwise fixed price contract to dry a flooded building. On the face of it, this strategy enables the insurance industry to limit its costs to a fixed price. Or does it? The fixed price contract does limit the largest drying jobs, but at the same time the smaller jobs are now becoming more expensive, as they are charged regardless of how long it takes.

The franchise owner still has to supply the capital intensive equipment and now receives a lower income. The number of jobs has increased as both the small and large independents have been forced out of business. During the recent dry period many store rooms have been full of unused equipment, this is a cost which the owners are aware of but the insurance industry is not paying for. The result of this is for the contractors to reduce the hire fleets and return to hire shops to hire equipment from the large chains. They, of course, are not shackled by fixed price contracts and will react to market demand. What then if the contractors are forced to rent equipment at a higher cost that the contract permits. Bankruptcy will follow.

Utilisation is the word used to describe the best financial practice in the rental industry. The insurance industry may well find that even franchise owners will not be there to service this market place. How have the National Flood School reacted to the changing market place?

The National Flood School has for the past two years been teaching intelligent drying, using the science of psychometrics combined with the research using the Flood House facility which was built two years ago to teach the latest hands-on techniques of Applied Structural Drying. The house is flooded with 1500 gallons of water and left to soak for 24 hours. The students are then asked to dry down the building in the fastest possible time using all of the classroom skills to select the correct number of dehumidifiers and air-movers to use the minimal amount with

optimum performance. Students comments include, I can reduce the time taken by 75% which means on area pricing schedules, I can make more margin in a shorter time scale and also move the equipment to the next job, which means that I can reduce the amount of capital ties up in my business. Service standards, financial accounting, health & safety are all challenges facing us in the new era of restoration.

More articles from Restoration Express Ltd.: