Violand

Violand Management Associates


Strengths

  • Serving people who are experiencing one of the most traumatic experiences of their lives. Providing livelihoods, meaningful work and personal fulfillment for the owners of the companies who provide restoration services.
  • Traditionally, many of the people who both own and who work in the restoration industry have been drawn to it because of a desire to service others, especially in a moment of need. Also, the continuous effort to better understand and use the science and technology behind the work we do.
  • Restorers are some of the best problem solvers. Every project is unique in its own respect. Whether it is the needs of the customer, carrier or other stakeholders in a project, or the challenges of the damage itself, the work they do can be very complex in nature. Restorers do an outstanding job of meeting these demands, oftentimes with limited resources.
  • Leaders in the industry have recognized the need for unity at the top. There are several initiatives from multiple groups to organize and find solutions to existential threats that independent restorers face. I am hopeful that the momentum to protect the industry will continue and grow.
  • Community and adaptation. Restorers find community important, and work to build and maintain it. We share what is working for us and humble ourselves when talking with others in realizing we don’t have it all figured out. In general, restorers adapt quickly to change. It could be the 24/7, 365 nature of our business, but that ever-changing, external business environment also sets us up well to make change internally in the business.

Weaknesses

  • There is still much work to be done to learn to speak with one voice.
  • One of the most glaring weaknesses in the industry is financial accommodations restorers make for their customers and the insurance carriers who provide funding for the projects. In an attempt to satisfy all parties, contractors continually put themselves in financial risk by funding the projects and waiting for payments much longer than they should. This is a unique scenario that does not exist in many other construction and service industries.
  • Restorers fall victim to the trap of recency bias on a regular basis. When an owner or estimator has a discussion with a lackluster adjuster, I often see and hear that they use one interaction to paint a broad description of that type of person in our industry. It never ceases to amaze me that I leave one conversation where someone characterizes a provider poorly and in the very next conversation, the same provider is praised for how well they work with restorers.
  • Focus on being better business people and less on being the most technically savvy. The market is changing and the profits are changing with it. The room for error is eroding.
  • Being the best at drying, having the best equipment, implementing new technology isn’t enough anymore. We need to be better at the business of business in order to maintain and improve. The margins achievable in the restoration industry allowed a poor operator to maintain in the past. Now, as the restorer feels pressure from all sides (carriers, wage burdens, savvy customers to name a few), the margins dwindle down point by point, and the better business-minded operators will be most successful in the end.

Opportunities

  • To learn to speak as a unified voice. To advocate for ourselves.
  • To present the industry as a legitimate career choice in both the trades and in management.
  • A unified effort is necessary to recruit skilled labor into the industry. This should include promotion of the career and vocational training at high school and post-secondary education levels.
  • Thinking long term, the industry should begin preparing for the future of all the mergers and acquisitions that are occurring right now. I believe the companies that have been purchased by individuals will fare well and continue to prosper. However, for the companies purchased by venture capital, I do not predict that they will do as well and will either dissolve or come up for sale in the future. Owners are aware of the risk, determination and leadership that it takes to keep a company moving forward. Once the industry is beyond the earnouts that the owners are honoring, we need to pay attention to how well those companies fare or risk losing the legacy of those operations. This could lead to a regional expansion for savvy owners or a new venture for acquiring entrepreneurs.
  • Maintain some independence. There’s an affinity for the guy who was brave enough to start and keep up with something scary and crazy. While there’s respect for the big players and the role they play, some of the best thinking comes from the little guy (the dreamer). Resist the temptation of the quick and easy dollar. It may be altruistic, but it would be nice to be in a place where there is not someone waiting behind you to do the job at a dollar cheaper. As an industry, it would be nice if we could draw the proverbial line in the sand and see entrepreneurs maintain businesses that turn profits.

Threats

  • Government regulation of the industry.
  • The long-term effect of all the M&A activity, and private equity money flowing into the industry. The long-term impact that money and power concentrated in fewer hands will have on the vitality of small businesses in the restoration industry.
  • Some regulation might be a good thing. Especially if it involves timely payment of claims and release of funds by mortgage lien holders. In addition to impacts of consolidation, wage inflation and pricing competition are two real threats. Both of these things working together could set up serious repercussions for independent restorers who are not well positioned financially to compete in a marketplace with lower margins.
  • Recently, the Environmental Protection Agency (EPA) has made the round in our industry looking for lead-safe practices. Most restorers are lax when it comes to documenting this and other risks. We should be leery of regulations and audits that could lead to restorers closing their businesses due to violations.
  • Commoditization of our services; mergers and acquisitions (big business versus mom and pop). When looking at other relatable industries, there is a worry about the influence of private equity money in our industry. The focus may shift from being the best operator to strictly a return on the dollars invested. Money is invested into XYZ Restoration Inc. to return money, as opposed to taking care of our people, communities and keeping an eye toward innovation. Obviously, labor availability is a concern right now as well — across the entire spectrum of our businesses. From the tech in the field, to the admin staff, to the executive team. It is hard to hire and hire well. Our margins for error are getting smaller. As an industry, we need to be careful about whom we bring on board, how we bring them on board, and how we keep them on board once they are here.