Restoration Affiliates is a group of companies operating in the restoration industry that deals with returning things back to their previous conditions after a disaster. The industry consists of two main clients; insurance companies and property managers, but there are numerous service providers. The key players include national service providers such as Belfor, franchise service providers such as SERVPRO (1500 franchises) and ServiceMaster Clean(3000 franchises), and third party administrators (TPAs). Despite the dominance of these players, there are numerous challenges in the industry that small companies can take advantage of to gain a competitive advantage, and one of these companies is Restoration Affiliates.
How it started
The problems in the restoration industry were manifold before RA was created. Firstly, the big national providers took all the business due to their wide geographical coverage as well as capacity but were not known for consistency in quality. The franchise service providers, on the other hand, provided national services but the individual franchises were restricted to predetermined geographical areas. The individual franchises were thus wary of sharing clients with other franchises for fear of losing business and the lack of cooperation led to poor quality services. On the demand side, large property managers and insurance companies were searching for restoration companies that had a national reach to cater so as to reach all the clients in their geographically expanding base. Additionally, these clients wanted companies with thecapacity to manage large and multiple jobs at once while only having few people to deal with.
Four small restoration firms; ARS, Maxons Restoration, Disaster One, and Restorecore, thus joined together to form Restoration Affiliates (RA) as a way of meeting these demands. The owners of the group had previously collaborated through Business Networks, an organization they founded in 1986 to network non-competing businesses in the remodeling and insurance restoration industry. Business Networks had, however, disintegrated due to overpromising and under delivering by members as well as a general lack of trust. The networks the individuals had created, however, were enough for them to come together on March 24, 2011,marking RA’s kickoff meeting
Ownership
Restoration Affiliates was started as a limited liability corporation of equal shareholders thus members had the same responsibility for the group’s success and failure. The affiliates also had to meet certain criteria. They had to be privately owned, independent, commercially focused, have a staff member dedicated to commercial marketing, and generate annual revenues of over $5 million. Besides the affiliates, the group also allowed in associates who were smaller restoration and reconstruction organizations with revenues of above $1 million.
How it grew
In the first two years of business, RA was operating without an integrated communication and job tracking system leading to numerous challenges. In September 2013, it hired an association management organization whose first job was to streamline operations and enhance communication leading to better collaboration. The collaboration led to the coming up of a unique disaster planning software that could allow customers to find granular information about every single building they managed throughout the nation. The value of the software got the attention of Forest City Enterprises, the nation’s fourth-largest property management company who signed a three-year contract with RA that marked the onset of its growth. What started with four companies grew to 21 affiliates by the fall of 2013. The number has since increased and RA has diversified its product offering as it now deals with restoration and reconstruction as well as remediation, emergency, disaster planning, and ready action plan services.