How Profitable Is a Restoration Business?

The truth: margins are strong—but only if you know your numbers.

Water and disaster restoration is one of the few industries where small teams can generate high revenue in a short amount of time. With emergency-driven work, insurance-backed payments, and relatively low marketing costs, it has the potential to be very profitable.

But potential doesn’t equal guaranteed. Let’s look at what actually drives profitability—and what gets in the way.

Average Profit Margins in Restoration

Well-run restoration companies typically see net profit margins of 15% to 25%. That’s after accounting for labor, equipment, overhead, insurance, and other expenses.

To put that into perspective:

If your company earns $100,000 in monthly revenue:

- At 15% profit, you keep $15,000

- At 25% profit, you keep $25,000

This is significantly higher than many other trades—but only when costs are actively managed and tracked.

What Makes a Restoration Business Profitable?

1. Tight Job Costing

You must track exactly what each job costs in materials, labor, and equipment. Otherwise, you’re guessing at margins.

2. Understanding Labor Burden

Wages are just the beginning. Taxes, PTO, and workers' comp add 20–40% to your labor cost. Ignoring this is one of the biggest reasons profits disappear.

3. Fast and Accurate Invoicing

Delays in invoicing or incomplete documentation lead to slow payments and write-offs. Restoration work often depends on Xactimate billing and meeting insurance carrier standards.

4. Low Equipment Rental Dependence

Owning key drying and demo equipment pays off fast. Renting everything drains profit—even when you're busy.

5. Overhead Control

Truck payments, software, rent, and insurance all matter. Profitable companies keep overhead under 20% of revenue.

Profitability Pitfalls to Avoid

• Underpricing to win jobs

• Not billing for all work performed

• Poor documentation = insurance denials

• Overstaffing during slow months

• Growing too fast without cash reserves

These issues don’t just lower profits—they can wipe them out completely.

Want to Know Your Profit Potential?

At Kiwi Cash Flow, we help restoration companies dig into their real margins—job by job and month by month. Whether you’re just starting out or trying to turn busy months into bankable profit, we’ll help you track, plan, and grow with clarity.

👉 Schedule a call here to find out what’s possible—and what’s holding you back.