How to Run a Profitable Restoration Company (Without Burning Out or Guessing)
Running a restoration business is not for the faint of heart. Between emergency calls, insurance paperwork, team turnover, and equipment breakdowns, it’s easy to feel like profitability is just out of reach—no matter how hard you work.
But here’s the truth:
Profit doesn’t come from working harder. It comes from building visibility, systems, and margin into your operations.
Let’s break down the core pillars of running a consistently profitable restoration company.
1. Know Where Your Money Actually Comes From
Not all jobs are created equal. One of the fastest paths to profitability is figuring out which types of work produce the highest margins—and which ones burn through cash.
Here’s what to track:
Revenue by service type (mitigation, rebuild, contents, etc.)
COGS by service type
Labor hours per job
Average cycle time per job type
Pro tip: Sometimes your biggest revenue stream has your worst margins. That’s not sustainable.
2. Job Cost Every Single Project
Profitable companies know their numbers by job, not just in total. If you’re not job costing, you’re guessing.
Track:
Materials (including markup or discounts)
In-house vs subcontractor labor
Equipment costs (even if you own it)
Overhead allocation
If a job looks great on paper but your bank account says otherwise, the gap is probably in untracked costs or labor.
3. Track WIP and Unbilled Revenue
We covered this in detail here, but in short:
Restoration businesses often have long billing cycles
You may spend thousands on a job before you ever invoice
If your books don’t reflect that work-in-progress, your profits (and cash flow) will look like a rollercoaster
Monthly WIP tracking = smoother financials + better decision making.
4. Manage Labor as a Variable Cost
Your team is your most valuable—and expensive—asset. If you don’t have tight controls and visibility on labor, your margins will disappear quickly.
Best practices:
Set target labor % benchmarks by service type (Mitigation: ~25-35%, Rebuild: ~35-45%)
Use time tracking systems that sync to job costing
Compare actual vs target labor costs weekly
Bonus tip: Subcontractors aren’t automatically more profitable. Track both labor models separately.
5. Build in Financial Rhythm
Weekly:
Job profitability check-ins
AR aging review
Cash flow forecast updates
Monthly:
P&L and balance sheet review
Budget vs actual tracking
Forecast adjustments
Quarterly:
Overhead review
Pricing and margin analysis
Strategic goal check-ins
If you only look at your books at tax time, you're running blind.
6. Price for Profit, Not Survival
Many contractors underprice out of fear—fear of losing the job, fear of competition, fear of pushback. But you can’t grow your company on razor-thin margins.
Review:
Are you charging for every line item that should be included?
Are your markup percentages still based on 2019 rates?
Are you billing for overhead, supervision, and project management?
You don't get what you deserve—you get what you charge for (and back up with documentation).
7. Treat Cash Like Oxygen
Profit is great, but cash keeps you alive. Monitor:
Days Sales Outstanding (how fast you get paid)
Credit card and LOC reliance
Vendor payment timing
Emergency reserves
Use tools that help you forecast—not just track—cash flow.
You Don’t Have to Do It Alone
At Kiwi Cash Flow, we help restoration companies not only clean up their books, but build a financial system that puts you in control of your profit.
From job costing and labor insights to WIP tracking and cash forecasting, we’ll help you shift from reacting to revenue… to running a business that funds your life—not consumes it.
📅 Ready to see where your profit is leaking and how to fix it?
Schedule a free strategy call.