CAT Events: The Holy Grail of Restoration (That May Just Put You Out Of Business)

CAT events are often at the center of our discussion as restoration contractors. We are in the business of fixing disasters. In addition to the natural adrenaline rush of these events, the stakes are very high: Operating a restoration business through a CAT event with perfection could lead to a 2 - 10x scaling of your business in months. On the other side of that coin are the doors that have to close when the same events are poorly executed. 

On average, I see the excitement to be significantly higher on the drive out to the storm leaving more tears and pain on the drive home. While CAT events are very complex, and I won't attempt to break down all aspects in this short post, I want to address one of the core breakdowns: CASH FLOW.

One of the biggest problems during CAT events is the upside nature of the cash flow. Money seems to fly out the door for equipment, labor, transportation, and consultants, but it's prolonged to come back in. While it's easy to blame insurance carriers for "slow payments," there are many things contractors can do to speed up this process. We find that payments during CAT events from carriers tend to distribute much faster than in non-CAT events when managed correctly. Unfortunately, we often see contractors not submitting their documentation and estimates quickly enough, creating a massive backlog of accounts receivables.

Don't beat yourself up; there's a reason that this happens to so many companies. One of the key reasons is that you have your most talented team members out in the field running sales and project management at a time when logistics are more complex than ever. That means your team is likely filling 12-18 hours a day just trying to service your customers' needs and save homes! The problem is that those are often the same team members submitting estimates and managing the approval process.

There are a few possible solutions, although every event, geography, and team composition requires a customized game plan. I've offered a few themes we've seen prove successful over the years:

1. Centralize your Estimators. Technology has enabled the ability to centralize your top talent. Use video calls, 3d documentation tools like Matterport, and web-based CRMs to have your "street teams" communicate back to a manager sitting in an office. That manager will increase productivity by more than 50%, which is the time they should use to process more payments.
2. Find the right Partner(s). Partner with a vendor that can streamline the estimate process and increase your capacity. WeScope is a full-service option that will get you to your final approved estimate, thereby freeing your top talent to sell and run more projects, but other vendors can help you with different parts of that process.
3. Standardize your estimating. This is a high-volume event, maybe your highest per-day volume ever. You need to look through your historical estimates and the type of estimates you plan to write during the CAT event and find simplified calculations that can speed up estimating considerably. For example, one method is getting to a price/sf calculation for complete demolition jobs.

The biggest thing we can do here is to bring awareness to the potential cashflow problems you may encounter so that you can do your research, make a plan, and 5x your restoration business the next time you have the opportunity to service the CAT event. WeScope focuses on growth, period. During these events, we've served as key partners to increase capacity, preserve profit margin, and ensure that restoration contractors keep settlements coming in to fuel positive cash flow. As a result, our clients have not only survived the CAT events but have achieved sustainable growth for their businesses, coming out on the other side two times or greater than the size they were before. WeScope will partner with restorers to establish goals, customize workflows, and implement specific quality assurance metrics to ensure you maximize any CAT event you choose to serve.