Increase Your Profits by Increasing Your Margins

Increase Your Profits by Increasing Your Margins Blog Feature
The Encircle Team

By: The Encircle Team

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Profits are top of mind for most business owners, but especially for restoration contractors. As the industry grows and evolves, new pressures are being placed on restorers. More thorough reporting requirements from carriers, global events, and raising costs are just a few of the many things that could put a dent into your restoration business’ profitability.

Yet as margins get continually squeezed, you might be wondering how you can improve your bottom line. You may not be able to control world events and the rising costs of materials, but you can control your business. Auditing your processes such as reviewing how your team documents a loss and where they store the images, or investigating how your team gathers information and creates reports, could reveal opportunities for efficiencies that in turn could improve your margins. 

Did you know that increasing your margins by as little as 3% could be the equivalent of growing your business by 40%?

Increase profits 40%  by Increasing  margins 3% pie graph

For example, an improved documentation process that relies on technology to create a repeatable, consistent process could save your business time and money just by simplifying reporting and reducing your business’ liability. See how small changes to your processes could have a big impact on your bottom line!

Steve the restoration contractor on the jobSteve runs a restoration business. It makes $3 million a year in revenue with a 7% margin. At the end of the year, Steve makes about $210,000 in net profit.

What if Steve could find an extra 3% in margins by improving his processes and capturing more line items?

If Steve increases his margins by 3%, he makes an additional $90,000 a year.

To make an extra $90,000 without changing his processes or increasing his margins, Steve would have to find the equivalent of an additional $1,285,714.29 in revenue each year!  That would be growing his business by more than 40%!


Love this infographic?

Check out the webinar that inspired it! Watch our Profitability Master Class as restoration expert Kris Rzesnoski explains how you can increase your profits by increasing your margins, justifying your estimates, and reducing costs without compromising on customer service. 

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Topics: Profitability | Business Management

About The Encircle Team

The Encircle Team loves helping restorers with great tips, best practices, technology, and other ideas.