Thinking of Starting a Restoration Company?
Here’s What You Need to Know Before You Begin
If you're considering starting a water restoration company, you're not alone. It’s a high-demand industry with strong margins, recession-resistant services, and relatively low startup costs compared to other trades. But before you dive in, there are key business, financial, and operational realities you need to understand.
1. It’s a 24/7 Business—You Need a Response Plan
Water damage doesn’t wait for business hours. Customers expect emergency response, and insurance carriers often track how quickly mitigation begins.
What this means: From day one, you need a plan for after-hours calls, weekends, and fast dispatch. That might mean hiring on-call staff or taking calls yourself until the business grows.
2. Licensing and Insurance Requirements Vary
Depending on your state, you may need a contractor’s license, mold remediation certification, and general liability and pollution insurance.
Pro tip: Research your local requirements early. Restoration is closely watched by regulators and insurance companies, so compliance matters.
3. Cash Flow Timing Can Be Tough
You may finish a job in three days—but not get paid for 30, 60, or even 90 days, especially if you're working with insurance companies.
What this means: You’ll need enough capital or credit to float payroll, equipment, and materials until payment comes in.
4. You Must Price Jobs Based on True Costs
Too many new companies use flat pricing or underbid to compete. But if you’re not tracking your actual labor burden, equipment usage, and overhead, you’re flying blind.
Key point: Profitable companies use job costing and financial tracking from the start. Don’t guess—know your margins.
5. You’ll Need Specialized Tools and Software
From moisture meters to dehumidifiers to Xactimate (the estimating software used by insurers), restoration requires both technical gear and digital tools.
Start-up tip: Buy the essentials, rent what you need for overflow, and learn the software your referral sources already use.
6. Marketing Is About Relationships, Not Just Ads
The majority of jobs in this industry come from referrals—plumbers, property managers, agents, and insurance adjusters.
What this means: Build trust. Show up on time, communicate clearly, and follow up. Your brand is built one job at a time.
7. This Can Be a Highly Profitable Business—If You Run It Like One
Done right, restoration businesses regularly see net profit margins of 15%–25%. But that only happens when you track financials, manage cash flow, and understand your costs.
Ready to Start Smart?
We work with restoration companies across the country—from startups to seven-figure operations—to help them build financial systems that scale.
👉 Schedule a call here to talk through your financial plan and set up your business to thrive from day one.
The Most Overlooked Items in Water Restoration Financials
Small details can quietly cost you big money.
Running a water restoration business takes speed, skill, and nonstop coordination—but the financials can’t be an afterthought. Unfortunately, many contractors only look at top-line revenue or net income and miss the red flags hiding in between. Here are some of the most commonly overlooked items in restoration financials—and how they can impact your cash flow, pricing, and profitability.
1. Untracked Labor Burden
You may know your hourly wage rates, but have you added in payroll taxes, workers’ comp, paid time off, and benefits? That’s your true labor cost per hour—and it’s almost always higher than expected.
Why it matters: If you don’t calculate burdened labor, your job costing and pricing are off from the start. You may think you're making money on a job when you're actually breaking even—or worse.
2. Equipment Depreciation or Rentals
Owned equipment wears out. Rented equipment adds up. But many contractors don't include either in their COGS or job costing.
Why it matters: If you're not building the cost of drying equipment into each job, your margins are inflated on paper and eroded in real life.
3. Subcontractor Costs Not Properly Allocated
Did a subcontractor help with demolition, rebuild, or plumbing? If you log that invoice but never assign it to a specific job, you won’t know true job profitability.
Why it matters: You can't fix low-margin jobs if you're not tracking the full cost per project.
4. Credit Card Fees Deducted from Payments
Insurance companies often pay via credit card or platforms like Xactimate Pay—and processing fees come out before the money hits your account.
Why it matters: If you book the full invoice amount as income without accounting for the fees, you're overstating revenue and understating expense.
5. Retainage or Uncollected A/R Aging Out
That large rebuild payment you're expecting may not be as current as you think. If you’re not reviewing aging reports regularly, old receivables and retainage can distort your cash flow picture.
Why it matters: Profit on paper doesn't help you make payroll. You need to know how much is collectible—and when.
6. Owner Draws or Personal Use of Company Funds
Sometimes it’s a gas charge. Sometimes it’s a Home Depot run that gets split. Over time, these personal draws (if not clearly logged) mess with your real overhead numbers.
Why it matters: Blurred financial lines mean your reports don’t reflect the true cost of running your business.
Don’t Let Profit Leak Through the Cracks
The good news? Every one of these issues can be fixed—with better tracking and more intentional reporting. At Kiwi Cash Flow, we work with restoration contractors to clean up their financials, track the metrics that matter, and make sure profitability isn’t just a guess.
👉 Schedule a call here to see where money might be hiding—or leaking—in your business.
Is Water Restoration a Profitable Business?
Short answer: yes—if it's run with tight financial visibility and strategic decision-making.
Water restoration is one of the most consistently in-demand services in the home services industry. Whether it's due to broken pipes, storm damage, or appliance failure, the need for mitigation and cleanup isn't seasonal—and that means reliable revenue potential. But profit doesn't automatically follow revenue. To run a profitable restoration company, you need a clear handle on costs, efficient labor, and strong cash flow management.
What Drives Profit in Water Restoration?
Let’s break it down:
1. Job Volume and Average Job Size
You can’t fix what doesn’t get called in. High-performing companies track both number of jobs and average revenue per job—then focus marketing and referral efforts on raising both.
Benchmark: In our Kiwi Cash Flow benchmarking group, top-performing companies report $5,500–$8,700 average revenue per job with consistent pipeline volume.
2. Cost of Goods Sold (COGS)
This includes materials, subcontractors, and equipment costs. Profitability starts with keeping these costs aligned with job revenue.
Target: COGS should generally stay under 40% of revenue. If you're higher, it's time to evaluate vendor pricing, material waste, or scope creep.
3. Labor Efficiency
Labor is often your second-largest expense. Crews that are underutilized or not billed accurately to jobs can quietly kill profits.
Target: Labor should stay around 30% of revenue or lower. High labor percentages often point to inefficiencies or underpricing. (This is included in your Cost Of Goods Sold total.)
4. Overhead Control
Rent, insurance, marketing, software, and truck expenses fall here. These are necessary costs—but without regular review, they bloat over time.
Target: Keep overhead to 40% of revenue or less to protect your margins.
5. Net Profit
After paying for materials, labor, and overhead, what's left is your profit. For a healthy water restoration business, this should be at least 15%–20% of total revenue.
The Profit Is There—But You Have to Measure It
If you're not tracking your financials closely, it’s easy to look busy without being profitable. That’s where strategic financial management makes the difference. Companies that review job profitability, watch their KPIs, and forecast cash flow stay ahead of the curve—and out of the red.
Curious if your restoration business is as profitable as it could be?
We help contractors track the numbers that matter most—without the financial fog.
👉 Click here to schedule a call and let’s walk through your numbers together.
What Your Restoration Cash Flow Statement Is Telling You (That Your P&L Isn’t)
Why the Cash Flow Statement Matters
Many restoration business owners feel blindsided when there’s no money in the bank—even though the P&L says they made a profit. That’s because profit and cash flow are not the same thing.
Your cash flow statement bridges the gap between your income statement (P&L) and your balance sheet. It explains why your cash balance went up or down.
There are three sections to focus on:
🔹 1. Cash from Operating Activities
This shows how much cash your business is generating from its actual operations. It adjusts net income for things like:
Depreciation (a non-cash expense)
Changes in receivables (if customers are paying or not)
Changes in payables (if you're paying vendors or holding off)
Tip: This is your most important number. If this is consistently negative, your business model or billing practices need attention—fast.
🔹 2. Cash from Investing Activities
This includes money spent on or earned from assets—like trucks, equipment, or office build-outs. In most cases, this number will be negative, because you’re reinvesting in the business.
Tip: One-time purchases may look like you're “losing money,” but they aren’t bad if you're still generating strong cash from operations.
🔹 3. Cash from Financing Activities
This section reflects how cash is moved through loans and owner activity:
Loan proceeds or repayments
Owner draws or contributions
Tip: Watch this section if you're regularly relying on loans or injecting personal funds just to cover payroll.
What Restoration Owners Should Do With It
Use it to understand cash swings, especially when you're profitable but tight on money
Monitor collection speed—a jump in A/R will show up here
Track major purchases to avoid draining reserves
Know whether your cash is growing sustainably, not just temporarily
Need Help Understanding Why You’re Profitable But Broke?
We help restoration contractors break down their financials into plain language, so they can finally answer the question: "Where did the money go?"
What Your Balance Sheet Says About the Health of Your Restoration Business
What Is a Balance Sheet?
Unlike the P&L, which tells you how much you earned and spent during a time period, the balance sheet gives you a snapshot of what your business owns and owes at a single point in time—usually month-end.
It’s split into three parts:
Assets – What your business owns
Liabilities – What your business owes
Equity – What’s left for the owner(s)
It always balances:
Assets = Liabilities + Equity
What Restoration Owners Should Watch
1. Accounts Receivable
If your A/R is climbing faster than your cash balance, you’re doing work and not getting paid. This is common in TPA or program-heavy work, but dangerous for cash flow. Anything over 60 days needs to be tracked aggressively.
2. Accounts Payable
Vendors and subs aren’t always shy about late payments. This number helps you track what you owe. If it’s piling up, your cash flow is under pressure—or you’re not entering bills properly.
3. Deferred Revenue
This is money you’ve received but haven’t earned yet (e.g., deposits or advance checks from carriers). It's a liability until the job is complete.
4. Fixed Assets & Depreciation
Your vehicles and equipment go here. Depreciation is a bookkeeping method to spread the cost over time. Make sure your bookkeeper updates this regularly.
5. Equity
This is the value of the business to you. It includes retained earnings from prior years and net income from the current year. If this number is negative or flat over time, it’s a red flag—even if your P&L shows profit.
What a Strong Balance Sheet Looks Like
Cash and receivables cover your short-term liabilities
Equipment is paid down steadily (not ballooning)
A/R is actively collected and aged properly
Liabilities are not higher than assets
Owner’s equity grows year over year
Want to Know What Your Balance Sheet Is Telling You?
At Kiwi Cash Flow, we work with restoration business owners who want more than just data—they want insight. If your balance sheet looks confusing, inconsistent, or just wrong, we’ll help you fix it and use it.
Understanding Your Restoration Company’s Profit & Loss Statement
Even if you're busy running jobs and keeping up with insurance paperwork, understanding your P&L is non-negotiable if you want to grow a stable and profitable restoration company. Yet, most owners either don’t look at it often—or don’t trust what they’re seeing.
Let’s fix that.
What Is a P&L and Why Should You Care?
A profit and loss (P&L) statement—sometimes called an income statement—shows your revenue, your costs, and your profit over a specific time period. It tells the story of how money comes in and where it goes. If you’re only checking your bank balance to gauge success, you're flying blind.
When reviewed monthly, a clean, accurate P&L can help you:
Spot issues early (like rising material costs or bloated overhead)
Evaluate job profitability
Decide when it’s time to hire—or when to wait
Identify cash leaks you didn’t know were there
The Four Key Sections to Watch
Revenue
This is the total amount your business earned. For restoration contractors, this may include water mitigation, mold remediation, contents cleaning, or reconstruction.Cost of Goods Sold (COGS)
Includes subcontractors, equipment rentals, and materials. If this category is too high, it may point to poor estimating, job scope creep, or mismanagement in the field.Labor (Included in COGS)
Typically includes W-2 techs and hourly field employees. If your labor is too low, you may be relying too heavily on subs. If it’s too high, you may not be billing enough work.Overhead
Everything it takes to run your business that isn’t tied to a specific job: office staff, rent, software, marketing, insurance, etc. Keep this lean, but don’t starve the business.Net Profit
What’s left after the COGS and expenses are paid. For a healthy restoration company, we like to see 20%+ net profit margins. If you’re under 10%, it’s time to look at pricing, overhead, and efficiency.
How to Use This Every Month
Compare month-to-month and against your annual goals
Set target percentages (like labor under 25%) and monitor them
Watch for sudden jumps in expenses or declining profits
Use it to create a scorecard for your team
Want Help Understanding Your P&L?
We work with restoration business owners across the country to help them make sense of their numbers, set better benchmarks, and grow profitably. If you want to go from guessing to knowing, let’s talk.
Financial Benchmarks for Restoration Contractors: How Do You Compare?
Running a successful water restoration company isn't just about doing quality work—it's about making sure the numbers work, too. Financial benchmarks give you the ability to compare your business to others in the industry and identify exactly where you're winning—or leaking cash.
Here are some of the most important financial benchmarks restoration business owners should track in 2024:
📈 Net Profit Margin: Aim for 20%+
Healthy restoration companies consistently generate 20% or more in net profit after covering all costs. That means if your business brings in $100,000 in revenue, at least $20,000 should be left over after paying your team, materials, vehicles, and overhead.
If you’re seeing margins below that, it’s time to look at:
Labor efficiency
Material waste
Overhead bloat
Unbilled work or discounts
💼 Cost of Goods Sold (COGS): 35–40% of Revenue
COGS in restoration typically includes:
Subcontractors
Materials and drying equipment
Job-related fuel and supplies
If your COGS is above 45%, your job profitability is likely suffering. If it’s too low, you might be under-investing in quality or short-staffed, leading to burnout or rework.
👷 Labor Costs: 25–30% of Revenue
For in-house W2 employees, a strong labor benchmark is around 25–30% of your top-line revenue. But to get an accurate number, you must include your true labor burden:
Employer payroll taxes
Insurance
Paid time off
Unbillable hours
Tools like our Labor Burden Calculator can help you calculate the real cost of each field employee—and prevent underpricing.
🧾 Overhead: 25–40% of Revenue
Your overhead includes rent, trucks, insurance, software, admin wages, and marketing. If your overhead is creeping over 35%, it may be time to rework your budget or renegotiate contracts.
💰 Cash on Hand: 1–3 Months of Operating Expenses
Restoration is a cash-intensive business. You’re often floating payroll while waiting weeks—or months—for insurance payouts. A strong benchmark is to keep at least one month of operating costs in reserve. Three months is ideal.
If you’re constantly covering cash flow from your own pocket, that’s a sign your AR process or pricing needs attention.
📊 Accounts Receivable Days: Under 45 Days
The industry average is between 45–60 days to collect payment from insurers and TPAs. Best-in-class companies keep AR Days under 45—some even under 30. That’s a direct driver of cash flow health.
🔢 How to Use These Benchmarks
These benchmarks aren’t just for comparison—they help you:
Identify where profits are slipping
Set pricing based on real costs
Forecast cash flow with confidence
Justify rate increases with hard data
Create a business that funds your growth goals
Want to see how your financials stack up—and what to do if you’re underperforming?
👉 Schedule a call to walk through your numbers and get a custom benchmark report: https://www.kiwicashflow.com
Water Restoration Benchmarks 2024: What the Cleanfax Survey Reveals
Each year, Cleanfax releases one of the most comprehensive benchmarking surveys in the restoration industry—and the 2024 edition is packed with insights that matter to water restoration business owners. If you’re wondering how your company stacks up when it comes to wages, benefits, turnover, pricing models, and profitability, this data is essential.
Wages and Regional Differences
Wages for water restoration techs vary slightly by region, but the national trends are clear:
Starting wages are most commonly in the $18.00–$19.99/hr range.
Average wages fall between $21.00 and $24.99/hr in most regions.
The South lags slightly with average wages between $19.00 and $20.99/hr.
These wage benchmarks can help you stay competitive in today’s tight labor market.
Top Benefits Offered
Restoration companies are competitive in benefits too:
83% offer vacation time
75% offer sick days and uniforms
57% offer health insurance
Dental, life, and disability insurance are less common, offered by about 20–40% of companies. These perks may be differentiators in your hiring strategy.
Employee Tenure and Turnover
The majority of employees (69%) stay 3–10 years.
54% of companies report a turnover rate under 10%, which is a surprisingly strong stat in an industry known for labor challenges.
That said, 83% of respondents still list hiring and retention as their top challenge.
How Companies Differentiate
Here’s how restoration firms say they stand out:
65% cite reputation and experience
Only 5% cite value-added services, which suggests major room for differentiation beyond just doing the job.
Lead Generation Trends
The most effective lead sources:
Referrals (95%)
Social media (67%)
Adjuster/insurance relationships (66%)
This confirms that building trust and relationships still outranks paid ads or lead services in restoration.
Insurance Payment Wait Times
Getting paid is still a slow process:
38% wait 3–5 weeks
21% wait more than 8 weeks
That’s a major cash flow concern—and one that makes budgeting and forecasting benchmarks especially critical.
Services Offered and Profitability
Most common services:
93% offer water damage restoration
83% offer mold remediation
82% offer fire/smoke restoration
Most profitable services reported:
Water damage restoration (59%)
Mold remediation (12%)
If your business is looking for ways to improve margins, these benchmark services are a good place to focus.
Pricing Methods
Xactimate still dominates:
82% use it as their primary pricing model
Other methods include per-hour pricing (43%) and CoreLogic (21%)
Company Types and Revenue Benchmarks
Most companies are structured as S Corporations (37%) or LLCs (31%)
23% earn between $1–2.9 million, and 19% earn more than $10 million
That wide spread shows how diverse the industry is, and why tailored benchmarks matter more than ever.
If you're a water restoration contractor looking to compare your performance to these industry benchmarks—or to figure out how to grow from $1M to $3M—benchmarking is the first step.
👉 For help turning these benchmarks into action, schedule a time to talk with us at https://www.kiwicashflow.com.
Data courtesy of the 2024 Cleanfax Restoration Benchmarking Survey.
Why Benchmarking Matters in the Water Restoration Industry—And How to Start
Water restoration is fast-paced, unpredictable, and full of financial blind spots. Most business owners know their gut tells part of the story—but not all of it. That’s where benchmarking comes in.
Whether you’re trying to grow, improve margins, or just figure out what “normal” looks like, water restoration benchmarking gives you the data to track performance and make smarter decisions.
What Is Benchmarking?
Benchmarking is the process of comparing your company’s key performance indicators (KPIs) to industry standards. It answers questions like:
Is your labor cost in line with others?
Are your overhead expenses out of control?
Are your profit margins healthy—or dangerously thin?
Without this data, you’re managing in the dark.
Why Benchmarking Matters in Water Restoration
1. It Replaces Guesswork With Clarity
Most contractors look at their financials and wonder, “Is this good?”
Benchmarking gives you context so you can actually answer that question.
2. It Helps You Catch Issues Early
Falling behind on net profit? COGS creeping up? Benchmark data helps spot the warning signs before they become major problems.
3. It Guides Strategic Decisions
Whether you’re hiring, investing in equipment, or raising prices—benchmarking helps you move forward with confidence.
4. It Tracks Progress Over Time
If you’re working hard to improve operations, benchmarking tells you if it's working. You’ll know when you’re beating the industry—and when you’re slipping behind.
Key Metrics to Benchmark in Your Restoration Business
When we benchmark restoration businesses at Kiwi Cash Flow, we focus on these core KPIs:
Labor % of Revenue
COGS (Subs + Materials) %
Overhead %
Net Profit Margin
Average Job Size
Accounts Receivable vs. Payable Days
Utilization Rate
How to Start Benchmarking
You don’t need to reinvent the wheel. Here’s how to begin:
✅ Step 1: Track Your Monthly KPIs
Make sure your bookkeeping system (like QuickBooks Online) is up to date and that your chart of accounts is structured for job-cost clarity.
✅ Step 2: Compare to Industry Data
Use real-world benchmarks—not just your own historical averages. A number that “looks fine” could still be underperforming for your industry.
✅ Step 3: Review Trends
Are you moving closer to target benchmarks each quarter? That’s how you build a stronger, more profitable company.
Join Our Free Benchmarking Project
At Kiwi Cash Flow, we make this easy. You submit a few numbers, and we calculate your KPIs and send you a clean, anonymous report showing how your performance stacks up.
No spreadsheets
No guesswork
No cost
Better data leads to better decisions.
If you want to grow profitably and avoid financial blind spots, start benchmarking now.
What the Top 10% of Water Restoration Companies Have in Common (Based on Benchmark Data)
Ever wonder what the most successful restoration companies are doing differently? At Kiwi Cash Flow, we’ve been collecting benchmark data from water restoration contractors across the country—and the trends are clear.
The top 10% of performers aren’t working more hours or getting lucky with big jobs. They’re running tight operations, tracking their numbers, and making strategic decisions based on real data.
Here’s what the benchmark data tells us they all have in common.
1. They Keep Labor Under 30% of Revenue
Top performers don’t just staff efficiently—they manage productivity. Their techs are scheduled smartly, downtime is minimized, and utilization is consistently tracked.
Benchmark: Labor at 20–30% of revenue
Top 10%: Often closer to 22–25%, with high field efficiency
How?
They use KPIs like labor burden and utilization rate to price accurately and avoid over-hiring.
2. They Know Their Job Costs Inside and Out
They aren’t guessing on margins. Materials, equipment, subs, and drying rentals are tracked at the job level—every time.
COGS Benchmark: 30–40% of revenue
Top 10%: Usually under 35%, with tighter estimating and fewer missed charges
How?
They reconcile estimates with actuals and adjust scopes based on post-job reviews.
3. They Maintain Lean Overhead
The most profitable companies avoid bloat in admin, vehicle fleets, and office expenses. Every dollar in overhead is intentional.
Overhead Benchmark: Under 25%
Top 10%: Often closer to 18–22%, with clean, focused expense categories
How?
They budget based on revenue targets, not wish lists—and regularly review spending by category.
4. They Consistently Hit Net Profit Margins Above 20%
The top 10% aren’t just surviving—they’re thriving. They’ve built pricing models that cover labor, overhead, and profit—and they stick to them.
Profit Benchmark: 15–20%+
Top 10%: 20–25% net profit, even after fair owner pay
How?
They know their breakeven point and use monthly financials and KPIs to stay ahead of problems.
5. They Track KPIs and Benchmark Regularly
This is the biggest common denominator. High-performing restoration companies track KPIs monthly and compare against industry benchmarks—not just their own history.
What they track:
Labor %
COGS %
Overhead %
Net profit margin
Average job size
AR vs. AP days
Utilization rate
How?
They participate in benchmarking projects, review tailored reports, and take action when numbers shift.
Want to See How You Compare?
We run a free monthly restoration benchmarking project where you can see exactly how your business stacks up—no guesswork, no fluff.
✔ Send a few basic numbers
✔ We calculate your KPIs
✔ You get a monthly report showing how you compare to the industry
You don’t have to guess what the top companies are doing.
You just need to measure—and match—them.
Is Your Water Restoration Business Performing Above or Below Industry Benchmarks?
You’ve got jobs rolling in, crews in the field, and money coming through the door. But here’s the real question: Is your business actually performing well—or just staying busy?
Without comparing your numbers to real restoration industry benchmarks, it’s almost impossible to know. You might be leaving profit on the table—or burning cash and not even realizing it.
Why Industry Benchmarks Matter
Benchmarks take the guesswork out of performance. They give you a clear line in the sand:
Are you ahead of the pack, or falling behind?
Most business owners rely on gut feel—“I think things are going okay.” But benchmarks let you back that up with data.
Key Benchmarks Restoration Companies Should Watch
Here are the most important performance metrics we track at Kiwi Cash Flow—and the benchmark ranges we see across the industry:
🔸 Labor % of Revenue
Benchmark: 20–30%
If you're higher, you may be overstaffed or undercharging. If you're lower, you may not have enough capacity to grow.
🔸 COGS (Labor, Subs + Materials) %
Benchmark: 30–40%
Rising costs here could signal problems with estimating, vendor pricing, or job scope control.
🔸 Overhead %
Benchmark: Under 40%
Overhead that creeps up over time eats directly into profit. Good books break this into clear categories like rent, admin wages, vehicles, and insurance.
🔸 Net Profit Margin
Benchmark: 20%+
A solid profit margin means you're pricing correctly and controlling expenses. Below 10%? You’re probably working too hard for too little return.
🔸 Average Job Size
Benchmark: Varies, but larger average jobs typically reflect strong referral networks or commercial work. The key is to track changes over time.
What If You’re Below Benchmark?
That’s not bad news—it’s a roadmap. Falling below benchmark in one or more areas simply tells you where to focus:
High labor %? Time to review schedules, productivity, and pricing.
Low net profit? Look at overhead categories and job margins.
Small job size? Consider marketing channels and lead quality.
When you track performance against benchmarks, you stop reacting and start managing strategically.
Join the Restoration Benchmarking Project
We run a monthly project where restoration contractors submit a few key numbers. We calculate the KPIs, compare them to national benchmarks, and send back a custom report.
✔ It’s anonymous
✔ It’s free
✔ It’s fast (takes less than 5 minutes to participate)
Stop guessing. Know how you stack up.
If you want to grow profits and run a tighter ship, benchmarking is where it starts.
The Most Important KPIs for Water Restoration Contractors in 2025
In the restoration industry, there’s no shortage of chaos—weather events, insurance delays, crew turnover, and equipment costs that never seem to go down. But amidst all that unpredictability, one thing can keep you grounded: your KPIs (Key Performance Indicators).
Tracking the right water restoration KPIs helps you cut through the noise and focus on what actually drives profitability and growth. As we move through 2025, these are the performance metrics that matter most for restoration contractors.
1. Labor as a Percentage of Revenue
Why it matters: Labor is one of your largest controllable costs. This KPI shows how efficiently your team is producing revenue.
Target: 20%–30%
Watch out for: Too high could signal overstaffing, inefficiency, or underpricing. Too low might mean you're stretched too thin to scale.
2. Cost of Goods Sold (COGS) %
Why it matters: Tracks the costs tied directly to completing jobs—materials, subs, and job-specific rentals.
Target: 30%–40%
Tip: A sudden spike may point to estimating issues or poor job costing controls.
3. Overhead %
Why it matters: This covers fixed expenses like rent, admin wages, insurance, and software. Keeping it lean ensures profitability even when job volume fluctuates.
Target: Under 25% of revenue
Pro Tip: Separate field vs. admin wages for more clarity.
4. Net Profit Margin
Why it matters: This is what you actually keep. It reflects how well you’re managing every part of the business—from pricing and production to overhead control.
Target: 15%–20%+
Common issue: Business owners often underestimate this number when they don’t pay themselves formally.
5. Average Job Size
Why it matters: Larger job sizes typically result in higher efficiency per mobilization. This is a great indicator of marketing quality, referral strength, and sales strategy.
Target: Varies widely—track your own trends month over month.
6. AR Days vs. AP Days
Why it matters: If you’re paying vendors faster than you’re collecting from customers, you’re covering the cash gap personally. This KPI highlights that risk.
Goal: AR Days < AP Days
Watch out: Extended AR Days often point to insurance delays or billing errors.
7. Utilization Rate (for Field Labor)
Why it matters: Tells you how much of your paid labor time is spent on billable job work.
Target: 70%–80% or higher
Bonus: This ties directly into labor burden and pricing accuracy.
Why These KPIs Matter in 2025
The restoration landscape is shifting—more competition, tighter margins, and increased pressure from insurance carriers. The contractors that thrive will be the ones who:
Know their numbers
Monitor trends in real time
Make pricing and staffing decisions with data, not guesswork
Want to Know Where You Stand?
We compile real-world benchmark data from restoration contractors across the U.S. and return monthly KPI reports showing how your business compares.
✔ It’s fast
✔ It’s anonymous
✔ It’s free
🔗 Join the Benchmarking Project
Track the right KPIs. Compare to the right benchmarks. Grow the right way.
2025 is here—make your data work for you.
Water Restoration Benchmarks: How Does Your Business Compare?
In the fast-moving world of water restoration, it’s easy to focus on the next job and lose track of the bigger picture. But if you want to grow profitably and avoid cash flow surprises, you need to know how your numbers stack up—not just against last year, but against the industry as a whole.
That’s where water restoration benchmarks come in.
Why Benchmarks Matter
Most contractors look at their profit and loss statements and ask, “Is this good?” But without a point of comparison, you’re just guessing.
Benchmarks give you context. They show how your performance compares to similar companies—so you can spot weak spots, highlight strengths, and make data-backed decisions.
Core Benchmarks for Water Restoration Businesses
At Kiwi Cash Flow, we compile anonymized KPI reports each month from restoration contractors across the country. Here are some of the key numbers we track—and why they matter:
🔹 Labor as a % of Revenue
Target: 20–30%
Why it matters: Too high and your margins are squeezed. Too low, and you may be understaffed or overworking your team.
🔹 COGS (Subs + Materials)
Target: 30–40% of revenue
Why it matters: High COGS could mean poor estimating or scope creep. Low COGS might mean you're missing expenses or underinvesting in quality.
🔹 Overhead %
Target: Under 40%
Why it matters: This reflects your fixed costs—admin staff, rent, insurance, vehicles, etc. Keeping it lean is key to profitability.
🔹 Net Profit Margin
Target: 15–20%+
Why it matters: This is what you keep after all expenses. It’s your bottom line—and the real measure of a healthy business.
🔹 Average Job Size
Why it matters: Larger average jobs usually mean higher efficiency. Tracking this over time helps identify growth or pricing issues.
How Does Your Restoration Business Compare?
If you're not tracking these KPIs—or if you're not sure what’s “normal”—you’re operating in the dark.
By comparing your numbers to industry benchmarks, you can:
Identify which areas need attention (labor, overhead, margins, etc.)
Track progress over time as you improve operations
Make confident hiring and pricing decisions backed by real data
Avoid surprises that come from hidden financial trends
Get Your Own Benchmark Report
We offer a free monthly benchmark project for restoration contractors. You send us a few basic numbers—we compile the KPIs and send you back a clean report showing how your business stacks up.
Participation is totally anonymous, takes just a few minutes, and gives you insights you can act on.
🔗 Learn more and sign up here: https://www.kiwicashflow.com/benchmarking-project
Stop guessing. Start comparing.
Your numbers mean more when you can see the full picture.
How Can I Tell if My Water Restoration Chart of Accounts Is Good?
Your chart of accounts (COA) is the backbone of your financial reporting. For water restoration businesses, having a well-organized, industry-specific COA is what separates usable financial insights from an overwhelming mess of numbers. But how do you know if your chart of accounts is actually good—or if it's hiding inefficiencies, bad margins, or profit leaks?
Let’s break down how to evaluate your COA and what a strong one should include.
1. Are Revenue Streams Clearly Separated?
A good COA will separate different types of revenue. For example:
Water mitigation
Mold remediation
Reconstruction or rebuild work
Equipment rental or monitoring fees
Consulting or insurance claim services
If it all just dumps into a single “Income” account, you’re missing valuable visibility. You want to know where your margins are best—and where you might be working hard for low return.
2. Are Direct Costs Clearly Tracked as COGS?
In restoration, Cost of Goods Sold (COGS) should reflect the true job costs, like:
Subcontractors
Materials and equipment purchased for jobs
Drying equipment rental
Job-specific labor (if tracked separately)
Too often, we see all labor dumped into Overhead, or material purchases mixed into “Office Supplies.” That makes job profitability impossible to measure.
3. Is Labor Split Between Job Cost and Overhead?
If you're using labor both in the field and in the office, split it:
Direct labor (field techs, project managers) → Goes to COGS
Indirect labor (admin, sales, owner draws) → Goes to Overhead
This matters for calculating job-level margin and labor utilization, two key KPIs in restoration.
4. Can You Easily See Your Overhead by Category?
Your Overhead accounts should be grouped logically so you can review trends and spot problems fast. Common categories include:
Rent and utilities
Vehicles and fuel
Insurance (general liability, workers comp)
Advertising and marketing
Admin wages and benefits
Software and tech tools (like Xactimate, PSA, etc.)
If your overhead feels bloated but you can't pinpoint why—your COA may be too vague.
5. Do You Have a Category for “Owner Pay” or Distributions?
Many owners accidentally underpay themselves, or lump personal expenses into business costs. Having a clear Owner’s Draw or Distribution line helps track what the business is truly costing to run—and helps your accountant sort it properly at tax time.
6. Are Equipment, Vehicles, and Loans Tracked Separately?
A good COA should have separate balance sheet accounts for:
Equipment purchases (as assets)
Loans or credit lines
Vehicle value and depreciation
Lease obligations
That way, you can calculate Return on Assets and ensure financing isn’t hiding inside operational expenses.
7. Are You Getting Reports That Help You Make Decisions?
Ultimately, the test of a good chart of accounts is this:
Can you pull a Profit & Loss report and immediately spot red flags, performance trends, or opportunities?
If your financial reports feel confusing or vague, the problem often lies in the COA.
Final Thoughts
A strong chart of accounts isn’t just bookkeeping—it’s strategy. It helps you price jobs right, manage cash flow, and grow with confidence. If you’re not sure whether your current setup is giving you the insights you need, we can help.
Want to review your chart of accounts with a restoration-focused financial pro?
Schedule a free strategy call with Kiwi Cash Flow and we’ll walk through it together.
Using Xactimate for Water Restoration Estimates? Here’s What It Doesn’t Tell You
If you’re in the restoration industry, you already know: Xactimate is the standard estimating tool for insurance work. It’s essential for:
Writing scope-based estimates
Submitting claims to adjusters
Getting paid on covered losses
But here's the problem: Xactimate only shows what you might get paid—not what the job will actually cost you.
Xactimate Helps You Estimate. It Doesn’t Help You Profit.
Xactimate is excellent at:
Writing estimates in carrier language
Aligning with insurance pricing databases
Keeping jobs moving through the claims process
But it doesn’t:
Track labor or overhead trends
Tell you if you’re pricing below breakeven
Show which jobs are draining your margins
Forecast whether you can afford to take on another crew or truck
That’s Where Kiwi Cash Flow Comes In
Kiwi Cash Flow works hand-in-hand with your Xactimate process. While Xactimate shows you what the carrier may pay, Kiwi shows you whether that payment keeps your business profitable.
With Kiwi, you’ll get:
✅ Monthly KPI reports designed for restoration
✅ True job margin reviews—including overhead and labor burden
✅ Cash flow forecasting and breakeven analysis
✅ Financial clarity without combing through spreadsheets or QuickBooks
You Can’t Afford to Rely on Xactimate Alone
If you’re bidding work in Xactimate, but not tracking job-level profitability or forecasting cash flow, you’re flying blind.
Let’s fix that.
➡️ https://www.kiwicashflow.com
Looking for Restoration Estimating Software? Here’s the Tool Most Contractors Are Missing
When you’re running a restoration company, accurate estimating isn’t optional—it’s the core of your revenue. That’s why contractors search for restoration estimating software like:
Xactimate – the industry standard for insurance claims
Symbility – used by some carriers and preferred adjusters
CoreLogic, XactAnalysis, or even Excel-based systems
These tools help you write clean, compliant estimates. But if you’re only using estimating software, you’re missing half the picture.
Great Estimates ≠ Profitable Jobs
You can write perfect estimates and still lose money. Why?
Labor and material costs fluctuate
Overhead isn’t always baked into your rates
You’re not reviewing job margins consistently
Adjusters knock down line items—but your software doesn’t warn you what that does to your margins
That’s where Kiwi Cash Flow comes in.
What Kiwi Cash Flow Adds to Your Estimating Software
While your software builds the estimate, Kiwi tells you what it really costs to do the work—and whether it’s worth taking.
With Kiwi, you’ll:
✅ Know your breakeven rate before the job starts
✅ Track actual job margins vs. estimated ones
✅ Monitor labor %, overhead %, and job profitability every month
✅ Get real-world KPI benchmarks for restoration businesses like yours
Estimate Smarter. Price Stronger. Stay Profitable.
Estimating software is a must. But if you’re not tying it to financial reporting, you could be working harder for less.
Let’s change that.
➡️ https://www.kiwicashflow.com
The Best Restoration Business Software Doesn’t Work Alone—Here’s What You’re Missing
If you’ve been searching for restoration business software, you’re not alone. Whether you’re just getting started or scaling past $3M/year, having the right tools in place is critical to managing job flow, documentation, and billing.
But here’s the truth: even the best software won't fix cash flow, profitability, or pricing problems—not without the right financial visibility behind it.
Popular Restoration Business Software Tools
Most contractors turn to one or more of these platforms:
Xactimate – for estimating and insurance invoicing
Job-Dox, Encircle, or Dash – for job/project management
Symbility – another estimating platform used by some carriers
CoreLogic or PSA Restoration Contractor – for tracking jobs, equipment, and compliance
These tools are essential—but they’re operational, not strategic.
Where Software Leaves Gaps
Most of these platforms:
Track what happened (jobs, time, materials)
Help with invoicing or syncing to QuickBooks
Organize your team and documentation
What they don’t do:
Show you how much you’re really making per job
Identify which jobs or crews are bleeding margin
Forecast cash shortages or hiring needs
Adjust your pricing to reflect true labor burden and overhead
That’s Where Kiwi Cash Flow Comes In
Kiwi Cash Flow works with your restoration business software by:
✅ Translating your job-level data into real financial insight
✅ Showing you KPIs like labor %, net profit, and breakeven pricing
✅ Providing cash flow forecasting based on your real receivables and payroll
✅ Delivering clear reports that tell you what to fix—and how to fix it
While job software shows you the day-to-day, Kiwi shows you the big picture.
Ready to Level Up?
If you already have your job software dialed in, the next step is making sure your business is truly profitable—not just busy.
Let’s get your numbers working as hard as you do.
➡️ https://www.kiwicashflow.com
Can You Really Make Money in Water Restoration? Yes—Here’s How
Water restoration isn’t just a steady business—it’s one of the most profitable service industries out there. If you’ve ever wondered whether you can actually make money doing water mitigation and restoration work, the answer is a clear yes. In fact, many owner-operators build strong six-figure incomes within just a few years—if they understand the numbers that drive profitability.
In this post, we’ll break down how water restoration companies make money, what the profit margins look like, and how you can set yourself up to keep more of what you earn.
💧 Why Water Restoration Is a High-Profit Industry
Water restoration work is in demand year-round. Whether it's a broken pipe, storm damage, or a slow leak that turns into a mold problem, property owners need help fast—and often turn to professionals who can bill insurance and handle the job start to finish.
What makes this business especially profitable:
Insurance-backed payments provide higher job values and more consistent cash flow
Recurring referral sources (like plumbers and property managers) can keep your pipeline full
High average ticket sizes ($3,000 to $15,000+) on residential jobs
Low marketing costs once you're established with local partners
💵 Realistic Profit Breakdown for Owner-Operators
Let’s say you complete 10 jobs in a month at an average of $6,000 each. That’s $60,000 in revenue. Here's what a strong-performing restoration business might look like:
Category % of Revenue Amount (based on $60K)
COGS (materials, subs) 35% $21,000
Labor (Included in COGS) 25% $15,000
Overhead (rent, trucks, insurance) 35% $21,000
Net Profit 30% $18,000+
With margins like that, a solo operator with one tech and a van can clear six figures annually—and scale from there.
📊 The KPIs That Drive Profit
The most successful restoration contractors don’t just work hard—they track the right key performance indicators (KPIs) to stay profitable:
Average job size – Are your jobs bringing in enough revenue?
Number of jobs per month – Is your pipeline consistent?
Labor % – Are you overstaffed, or running lean and efficient?
COGS % – Are materials and subs eating into your margin?
Overhead % – Is your business supporting growth without draining profit?
Net Profit % – What are you actually keeping at the end of the month?
These numbers tell the real story—not just how busy you are, but whether you’re actually building a profitable, sustainable business.
💼 How Kiwi Cash Flow Helps Restoration Contractors Succeed
At Kiwi Cash Flow, we specialize in helping water restoration business owners get financial clarity. We provide monthly reports, custom KPI tracking, and industry benchmarking tailored to owner-operators like you.
Our clients don’t just get a spreadsheet—they get insight into:
Why your labor % might be creeping up
Whether your job mix supports your revenue goals
How much cash you should be keeping every month
What changes to make when profitability dips
If you want to make more money—and keep it—we’ll help you get there.
✅ The Bottom Line
Yes, you can absolutely make money doing water restoration. But true profitability comes from knowing your numbers, pricing correctly, managing labor and overhead, and tracking KPIs monthly.
If you’re ready to stop guessing and start scaling with confidence, we can help.
📈 Learn more at https://www.kiwicashflow.com
💬 Schedule a call today to see how your restoration business stacks up—and how much more it could earn.
Water Restoration - Is It A Good Way to Make Money?
**Absolutely. Water restoration is one of the most profitable trades in the service industry—**if you structure it right, watch your margins, and track the numbers that matter.
Whether you're just getting started or already running a few crews, water mitigation and restoration work can generate consistent, high-value revenue. With the right systems in place, it’s not just possible to make money—it’s possible to build real wealth.
💸 Why Restoration Is So Profitable
Water restoration jobs are often covered by insurance, which means you’re not chasing low-budget homeowners—you’re billing carriers with set industry pricing (like Xactimate). This gives your business stability and predictable revenue.
Typical job sizes:
Dry-outs: $3,000–$5,000
Mold remediation: $4,000–$10,000
Full-service mitigation + rebuild: $10,000–$30,000+
If you’re booking even a handful of jobs per month, your top-line revenue adds up quickly. And with solid job costing and operational controls, your bottom line can look just as strong.
📊 What Profit Margins Look Like
Let’s break it down with a real-world example for an owner-operator:
Monthly Revenue: $100,000
COGS (equipment, materials, subs): ~35%
Labor Costs: ~25%
Overhead (rent, insurance, software, trucks): ~20%
That still leaves 20% net profit or more—and that’s before factoring in tax strategies or business growth. Some of our clients even see 25–30% net margins by dialing in their pricing, scheduling, and labor.
🔧 What Makes the Difference?
The restoration companies that stay profitable long-term are the ones that:
Know their numbers and track KPIs monthly
Understand how labor, COGS, and overhead work together
Price jobs to cover true labor burden and overhead
Review their financials regularly and make data-backed decisions
That’s where Kiwi Cash Flow comes in. We work with water restoration contractors across the U.S. to help them simplify their finances, see their real margins, and stay cash-positive as they grow.
✅ Yes, You Can Make Money—And We’ll Help You Keep It
At Kiwi Cash Flow, we don’t just hand you reports—we help you understand what they mean, and what to do next. Our monthly financial insights, KPI reviews, and industry benchmarking are built specifically for restoration businesses.
If you’ve ever wondered, “Am I actually making money?” — we’ll show you. And if you’re already profitable, we’ll help you scale it.
📈 Learn more at https://www.kiwicashflow.com
💬 Schedule a call and find out how much more your business could be making.
Can I Make Money Doing Water Restoration?
Short answer: yes — but only if you understand how the money really works.
Water restoration can be a highly profitable business, especially for owner-operators and small teams who know their numbers. But the key to success isn’t just in getting jobs—it’s in knowing which jobs are worth doing, how much they actually cost you, and what’s left over after labor, materials, and overhead.
Here’s what you need to know if you’re thinking about getting into water restoration or trying to grow your current business.
💰 What’s the Typical Revenue for a Water Restoration Job?
Most restoration jobs fall between $2,500 and $10,000, depending on the severity of the damage and the scope of work. Insurance-funded jobs can be larger, but they often involve delays in payment and extra documentation.
Average job size for owner-operators:
Dry-out jobs: $3,000–$5,000
Mold remediation: $4,000–$10,000
Full-service (water + rebuild): $10,000–$30,000+
The catch? You might be working hard but still not making a profit—unless you're watching the right numbers.
📊 What’s Left After Expenses?
Let’s say you bill $100,000 in a month. Here’s a typical breakdown for an owner-led business:
COGS (materials, equipment, subcontractors): 30–40%
Labor (technicians, helpers): 20–30%
Overhead (insurance, software, trucks, rent): 15–25%
That might leave you with 10–20% net profit, if your jobs are priced correctly and your team is efficient. But if your COGS creeps up or your overhead isn't under control, that margin shrinks fast.
🚧 What Can Go Wrong?
Many new restoration business owners struggle because they:
Don’t track job costs closely enough
Take every job, even if it isn’t profitable
Underprice labor or don’t include downtime
Let overhead grow faster than revenue
Wait too long to get paid on insurance jobs
You can be busy and still losing money. That’s why monthly KPI tracking is essential.
✅ What Makes Restoration Profitable?
Profitable restoration companies:
Track KPIs like labor %, COGS %, and net profit monthly
Know their breakeven point and price jobs to cover it
Say no to low-margin jobs or adjust pricing to protect profit
Watch cash flow and billing cycles closely
Invest in tools and staff only when it makes financial sense
At Kiwi Cash Flow, we help restoration contractors make confident financial decisions by tracking the KPIs that matter most—job size, job volume, labor %, overhead, and net profit. With the right insights, you don’t just make money—you keep it.
Ready to Know If You’re Profitable?
If you're running a water mitigation or restoration company and aren’t sure whether you’re actually making money—or could be making more—we’re here to help.
📈 Learn more at https://www.kiwicashflow.com and schedule a call to see how your numbers stack up.