More Than Half of Restoration Firms Now Take Zero Program Work

You signed up for the program because it promised the one thing restoration never guarantees on its own: steady, predictable volume. A carrier or a third-party administrator feeds you jobs, you don't chase the lead, the phone rings without a marketing budget behind it. For a lot of shops that trade felt obvious. So here's the number worth sitting with: more than half the industry has now quietly walked away from it. And they didn't reach that decision by feel — they ran the math most owners never run.

The idea: half the industry is voting with its feet

According to the Restoration Industry Association's 2025 Cost of Doing Business report — the industry survey it produces with KnowHow, reflecting 2024 data — 53% of restoration firms reported zero revenue from third-party administrators, up from 45% the year before. That's an industry survey, not a law of physics, so treat it as the read of the room it is. But an eight-point jump in a single year, in the direction of away, is not noise. It's a lot of owners independently reaching the same conclusion.

The same report tells you why. Overhead has been climbing: the industry average now runs around 38% of revenue, which quietly retires the old "10% overhead, 10% profit" rule of thumb a generation of restorers built their pricing on. And the cash side got slower, too — the report puts typical collections at 60 to 80 days, with accounts receivable sitting at a median of about 16.5% of annual gross revenue. Layer those three facts together and program work starts to look different than it did on the day you signed.

The restoration translation

Program and TPA work is neither good nor evil. It's a trade: steadier lead flow and volume in exchange for carrier-dictated pricing, heavier documentation, and a longer wait to get paid. The mistake isn't taking it. The mistake is taking it without answering the only question that matters — what does it actually cost me to serve this work, and does the price clear that cost?

Three costs hide inside that question, and program work is where they hide best.

The first is documentation. Portal uploads, photo requirements, moisture logs, compliance steps, the back-and-forth with a cost consultant — those are real labor hours, and they land on top of an overhead load that's already near 38 cents on every revenue dollar. Add admin-heavy jobs at a price someone else set, and the true cost of the job can quietly pass the price of the job.

The second is the cash cycle. If collections run 60 to 80 days, you are financing the carrier's claim for two to three months on every file. Cheap volume that also pays slowly isn't one problem — it's two, stacked.

The third is concentration. If a single program is 30% or 40% of your revenue, you don't have a customer. You have a landlord who can cut your rate, tighten your documentation rules, or de-list you entirely — by email — and take a third of your business with them.

Four questions before you sign — or renew

1. What's my true cost to serve this program? Add burdened production hours, the documentation and admin hours the program actually requires, and the carrying cost of 60-to-80-day pay. Put that number next to the dictated price. If it doesn't clear your overhead and a target margin, that's not volume — it's subsidized volume, and you're the subsidy.
2. Model it against break-even and days-cash, not against an empty schedule. A slow stretch tempts you to take anything to keep crews moving. Break-even math answers a different question: does this job help cover the cost of keeping the doors open, or just keep everyone busy at a loss? Those feel identical on a Tuesday and could not be more different on the P&L.
3. Track your carrier and TPA concentration as an actual metric. What percentage of revenue rides on your largest one or two programs? Watch that number the way a CFO would. Past roughly 25-30%, it's a risk line, not a relationship.
4. Then decide deliberately — price it, negotiate it, or decline it. The 53% who took zero TPA revenue didn't all quit program work on principle. Plenty of them simply refused it at a price that loses money. That's a decision. Drifting into whatever the portal sends is a default.

The freeing read on that 53% is this: program work is a choice you're allowed to make on the numbers, not a tax you have to pay for staying in business. Half the industry already treats it that way. The other half is often running a full schedule of work someone else priced, and wondering why a busy year didn't feel like a profitable one.

Knowing your true cost to serve a program — and whether your busiest revenue is your best revenue — is exactly the CFO work we do for restoration and reconstruction owners. If you're not sure whether your program work is carrying its weight or quietly eating your margin, that's a conversation worth having before the next renewal.

General guidance for restoration and reconstruction owners — not a substitute for advice tailored to your company's numbers.

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