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Your success as a property preservation contractor is directly related to your dedication to continually educating yourself about REO construction issues as well as how to properly manage cash flow. In this industry, the sky is truly the limit. Many contractors have reported growth rates of 100% or more during the early years of specializing in property preservation. This is definitely a great opportunity to ride the wave of a current trend. But you must understand that property preservation is a business and, just like any other business, there are many different working parts involved, all of which you are going to have to learn and master. So before getting too excited, remember that even though there is a ton of work available in this niche construction business, it takes hard work and the willingness to educate yourself on a continuous basis. And don’t forget the statistics about how more than 90% of new construction businesses go out of business within the first 5 years.
Getting clients will be one of the easiest parts of this business. Most national preservation companies have a revolving door of vendors coming and going, so there is always an opportunity. Do not make the mistake of landing an account BEFORE you educate yourself first. Keep in mind that there are several different aspects of your business that need attention before taking on the first job, such as setting up a business entity, getting the proper insurance policies, educating yourself, and establishing important business systems. Another option is to start as a subcontractor for an established property preservation contractor, in order to gain experience, because there is only one chance to make a strong impression when working directly for clients. Hiring a property preservation business coach can also be a great way to shorten the learning curve, get organized, and start off on the right foot. Follow this link to a FREE database of national property preservation companies.
The truth is that there is still a ton of opportunity to grow a successful business in this field for anyone with basic business skills, common sense, and motivation, regardless of geographical location. The main reason this misconception exists is because many new contractors fail to properly educate themselves before jumping into the property preservation world. They don’t realize that this business is much different from a typical residential construction business. Similar postings online often come from individuals who eventually discover that it was their attitude, lack of education, and misunderstanding about entrepreneurship that caused their financial troubles. Not to mention, those same individuals often go on to post negative comments about the next business venture they try.
If you listen to the chatter in Property Preservation forums, it can seem that way. However, experienced business people recognize that those who spend their time complaining in these forums rarely discuss anything productive—such as creative ways to increase income while reducing expenses. In fact, they often sabotage themselves by talking badly about their own customers. Basic common sense makes it clear that speaking poorly about customers, especially on the internet, is never a good idea. It’s no surprise that those individuals struggle to run their businesses. The key is to gain knowledge not only about property preservation, but also about building and managing a successful business. Keep in mind that certain types of repairs have set pricing, while others require estimates. Success depends on knowing how much the various repairs will cost your business. Without understanding those costs before taking on property preservation work, profitability can be difficult to achieve.
There are several choices when it comes to property preservation software that can help with managing the business. Property preservation is a very unique niche because it involves typical repair work, maintenance tasks, field service-type tasks, and property inspections. Most of the property preservation software solutions currently available are not “all inclusive,” so a separate accounting software solution will also be necessary. The only other option is hiring a software developer to create custom-made software. Trying to operate without some type of specialized software is the quickest path to failure.
