The First Key Financial Numbers to Know When Starting a Disaster Restoration Company

May 16

Because profit doesn’t happen by accident.

If you’re starting a disaster restoration company, chances are you’re focusing on tools, trucks, and leads—and those are all critical. But there’s one area that new owners often overlook: the financial side. Without clear financial benchmarks and tracking, it’s easy to stay busy but not profitable.

Here are the first financial numbers you must understand and track from the beginning:

1. Labor Burden Rate

You might be paying a tech $25/hour—but your true cost could be $35+ after taxes, workers’ comp, and PTO.

Why it matters: This is the baseline you need to price jobs properly and calculate profit per hour.
How to calculate it: Add payroll taxes, insurance, benefits, and time-off costs to the hourly wage.

2. Average Revenue Per Job

Knowing what your typical water loss or mold remediation job brings in is crucial for forecasting.

Industry range: $5,000–$9,000 per mitigation job is common.
Tip: Start tracking this on day one. It’ll help you identify underperforming jobs and opportunities for upsell.

3. Cost of Goods Sold (COGS) as % of Revenue

This includes materials, subcontractors, and equipment costs used directly on jobs.

Target benchmark: Keep this under 35% of revenue.
Watch out for: Equipment rentals and subcontractor invoices that don’t get tied back to specific jobs.

4. Overhead (Fixed Monthly Costs)

Your business has to bring in enough just to cover rent, insurance, fuel, software, phones, and admin—even before paying labor.

Set a target: Know your monthly overhead total and aim to keep it under 35% of monthly revenue.

5. Break-Even Revenue

How much revenue do you need each month to pay all expenses—before you make a profit?

How to calculate: Add up all fixed and variable costs, and determine the revenue required to cover them.

6. Cash Flow Buffer

Restoration is a slow-pay industry. Insurance payments often come 45–60+ days after work is done.

Best practice: Start with at least 2–3 months of cash or access to credit to cover payroll, equipment, and marketing.
Pro tip: Don’t mistake “jobs booked” for “cash collected.”

7. Net Profit Margin

This is what’s left after all expenses—including overhead—are paid.

Target: Long-term, aim for 15%–25% of revenue as net profit.
Early stage: Track your numbers even if you’re reinvesting everything. You’ll learn faster.

Want Help Getting These Numbers Set Up?

At Kiwi Cash Flow, we help startup and growing restoration businesses set up financial tracking that’s simple, strategic, and scalable. If you’re serious about building a profitable business from day one, don’t skip this step.

👉 Schedule a call here and let’s make sure your pricing, forecasting, and job costing are set up for real profit.

Michele Gray