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By October of 2019, strong economic signals were being observed of a likely recession within two years. Unfortunately, the widespread economic devastation of the novel coronavirus has hastened and deepened the nature of this recession – one probably discussed for generations. It’s likely to significantly impact the restoration industry as well, so it’s wise to consider what the future may bring and plan accordingly.
What Lessons Could Be Learned From the 2007 Recession?
During the last downturn, many in the restoration industry experienced one of these three situations noted by the Restoration & Remediation blog:
-A homeowner is forced by their financial situation to do repairs themselves.
-A homeowner fails to pay after professional restoration.
-A homeowner ignores the damage and keeps the settlement money.
All three are likely to be encountered at some point, but during the last recession, they became all-too common. Enough of these will cause large numbers of otherwise successful restoration companies to go under.
What Impact Will the Coronavirus Have on This Recession?
While no one can predict the future, it doesn’t look good at all, at least in the short- and medium-term. In fact, according to Fortune Magazine, the International Monetary Fund says this recession – already in the works before the coronavirus – is likely to be as bad or worse than the Great Recession around a decade ago.
How Can A Restoration Company Survive?
First, don’t panic! Look at the long-term – it’s likely that the impact will be mitigated sometime in 2021 – and recessions are part of life, so being prepared just makes sense.
One proactive step you can take is to also help customers with damage prevention. Start educating customers about leak detection devices and fire prevention strategies. Many restoration companies are also turning into a full-service company, offering HVAC and electrical work.
Another way to help your bottom line is to engage with an experienced restoration industry invoice and collections company who specializes in working with adjusters to maximize your net profit. This is one of the most effective and time-proven methods to grow your business while reducing your administrative costs.