Category: Starting & Scaling a Restoration Company

Starting a restoration company in 2026 is part trade business, part insurance navigation, and part marketing engine. The market is real — the U.S. damage restoration services industry is roughly $7.1 billion with 60,000+ businesses already operating — but margins live or die on the first 90 days of operating decisions. This is the operator blueprint.

What it actually costs to start

Forget the “start with $5,000” social media posts. A real restoration company opening day in 2026 looks like this:

• Equipment package (water mitigation only): $20,000 – $50,000. Air movers ~$250 each (you’ll need 12-20), small dehumidifiers ~$1,000, large LGRs ~$2,500, HEPA air scrubbers, moisture meters, thermal camera, extraction wand or truck-mount.
• Service vehicle: $40,000 – $50,000 for a used cargo van fitted out, or $60,000 – $80,000+ for a new one.
• IICRC certifications: $1,000 – $2,500 to get an owner through WRT, ASD, AMRT.
• Insurance: General liability + commercial auto + pollution liability + workers comp typically runs $8,000 – $15,000/year for a 1-2 truck shop.
• Licensing, LLC, accounting setup: $1,500 – $3,000.
• Marketing launch (website, GBP, basic SEO, branded vehicle wraps): $5,000 – $15,000.
• Working capital (payroll, fuel, software for 90 days): $30,000 – $75,000.

A bootstrapped 1-truck launch lands around $80,000 – $150,000 cash to be safe. Detailed industry models for fully-equipped multi-truck launches put the all-in number closer to $794,000 — but that’s not what most operators do on day one. Most start lean and reinvest.

The certifications that actually matter

You can legally start a restoration company without IICRC certs in most states — but you cannot work TPA programs, you cannot pass insurance carrier audits, and you cannot bill standard scopes credibly. Get these in this order:

1. WRT (Water Damage Restoration Technician) — the prerequisite for everything else.
2. ASD (Applied Structural Drying) — to actually do drying competently.
3. AMRT (Applied Microbial Remediation Technician) — opens mold work and protocol-driven jobs.
4. FSRT and OCT — once fire and contents work enters the mix.

Insurance, licensing, and the legal floor

Restoration is one of the most insurance-heavy small businesses you can start. You will get audited. Required minimums for most TPA programs and many commercial work:

• $1M / $2M general liability with mold endorsement.
• $1M commercial auto.
• State-required workers comp (not optional once you have employees).
• Pollution liability is increasingly required for any work involving Cat 3 water or mold.

State licensing varies widely. California requires a contractor’s license (B or specialty). Florida requires mold remediation licensure. Texas requires mold remediation contractor licensing for any covered mold work. Check your state contractor licensing board before spending a dollar on equipment.

How you find the first 30 jobs

Nobody hands you work in restoration. The first 30 jobs come from a stack of overlapping moves:

• Plumbers: Walk into 50 plumbing shops in your service area with donuts and a one-pager. Plumbers refer water losses every week and most have no go-to restorer.
• Property management companies: Cold-call, drop off business cards, get on after-hours emergency lists.
• GBP + LSA + emergency-keyword Google Ads: Day-one local search presence is non-negotiable.
• Insurance agents (independent, not just captive): They refer to whoever they trust to make their client happy.
• TPA enrollment: Enrolling in Contractor Connection, Alacrity, or Code Blue takes time — start the applications in month one.

For the full marketing build-out, see the Restoration Marketing Master Guide.

Owner-operator trap

The most common failure mode in restoration startups isn’t going broke — it’s getting stuck. The owner runs every job, sells every job, estimates every job, and 18 months in still has 1 truck and no time to grow. Set the trigger now: at $40,000/month in revenue, hire your first technician. Don’t wait until you’re drowning.

FAQs about starting a restoration company

How much money do I really need to start a restoration company?

For a lean 1-truck water mitigation launch in 2026, plan on $80,000 – $150,000 in cash including equipment, vehicle, insurance, certifications, marketing, and 90 days of working capital. Multi-truck launches with fire and mold capability run $400,000 – $800,000+.

Do I need IICRC certification to legally start a restoration company?

Most states do not require IICRC certification to legally operate. However, you cannot enroll in TPA programs (Contractor Connection, Alacrity, Code Blue), pass most insurance carrier audits, or credibly bill standard scopes without it. Treat WRT, ASD, and AMRT as effectively required.

What licenses do I need to start a restoration company?

It varies by state. California requires a contractor’s license. Florida and Texas require mold remediation licensure. Almost all states require a business license, sales tax registration, and workers comp once you have employees. Always confirm with your state contractor licensing board before launching.

How long does it take to break even in restoration?

A focused 1-truck water-only operation typically reaches breakeven in 6 – 12 months if marketing and TPA work pick up. Operators who add fire and mold capability faster usually break even slower because they spread capital thinner across more equipment categories.

Should I buy a franchise or start independent?

Franchises (Servpro, Restoration 1, ServiceMaster) provide brand, lead flow, and TPA shortcuts — at the cost of $50,000 – $80,000 in initial fees plus ongoing royalties of 5-10%. Independents keep more margin but have to build everything themselves. The right answer depends on your starting capital, marketing skill, and tolerance for slow ramp.

Want the full operator playbook? See the Restoration Startup and Scaling Master Guide.

A restoration business plan exists for one reason: to convince a third party (banker, TPA program manager, investor, partner) that you understand the economics of the business you’re building. Most plans fail not because the writing is bad, but because the numbers don’t reflect how restoration actually operates.

The 8 sections that have to be in it

1. Executive summary. One page. Who you are, what you do, where you operate, the funding ask, and the headline financial outlook.
2. Company overview. Legal structure, ownership, location, service area, founding team backgrounds.
3. Services and pricing. Water, fire, mold, contents, reconstruction. Pricing methodology (Xactimate-aligned, T&M, project caps).
4. Market analysis. The U.S. damage restoration market is roughly $7.1 billion with ~60,000 companies. Identify your local market size, top 5 competitors, and your differentiation.
5. Marketing and sales plan. How you’ll generate work — referral channels, TPA enrollments, digital, fleet visibility.
6. Operations plan. 24/7 dispatch model, equipment plan, technician hiring plan, software stack.
7. Management and team. Org chart, key roles, certifications, hiring sequence.
8. Financial projections. 3 years monthly. Revenue, COGS, gross margin, operating expenses, EBITDA, capex, cash flow.

The financial assumptions you have to defend

This is where most restoration business plans collapse under scrutiny. Bake in real numbers:

• Revenue per truck per month: $30,000 – $50,000 is realistic for a mature crew on consistent water/mold work. Don’t model $80,000/truck unless you can show how.
• Gross margin: 40-55% on mitigation, 25-35% on reconstruction. Blended typically 35-45%.
• Labor as % of revenue: 28-35% for production technicians.
• Equipment depreciation: 5-7 years straight line on dehus and air movers.
• Marketing spend: 5-10% of revenue is realistic for growth-mode restoration companies.
• DSO (days sales outstanding): Plan for 60-90 days on insurance work, 30 on cash work. This is the cash flow killer.

What TPA program managers look for

If your business plan exists to support a TPA enrollment application (Contractor Connection, Alacrity, Code Blue), they care about:

• Service area definition and response time commitments.
• Insurance coverage levels meeting program minimums.
• IICRC certifications across the team.
• Production capacity (number of technicians, trucks, equipment cache).
• Quality systems — photo documentation, scope adherence, customer satisfaction tracking.
• Financial stability evidence.

What bankers look for

SBA 7(a) lenders and restoration-friendly community banks want different things than TPAs:

• Owner cash injection: 10-20% of total project cost.
• Personal guarantee. Non-negotiable.
• Industry experience. 2+ years in restoration is the soft minimum.
• DSCR (debt service coverage ratio) above 1.25.
• Realistic AR aging assumptions. Bankers know insurance pays slow.

The revenue model you should actually run

Most failed restoration business plans assume linear revenue growth. Real restoration revenue is lumpy, seasonal, and event-driven (CAT events, freeze events, hurricane events). Build your model with a base run rate plus a CAT event uplift assumption — and keep enough working capital for a slow quarter.

FAQs about restoration business plans

How long should a restoration business plan be?

20-30 pages for a bank or investor plan. 5-10 pages for a TPA enrollment package. Anything over 40 pages signals padding.

What revenue should I project for year 1?

A 1-truck water-only operation typically lands $250,000 – $500,000 in year 1. A 2-truck operation with fire capability and active TPA enrollments can hit $750,000 – $1.2M. Don’t project $2M in year 1 unless you have signed referral agreements to back it up.

Do I need a business plan if I’m self-funding?

Yes. Even without a banker, the business plan forces you to confront equipment costs, insurance levels, marketing budget, and the math of when you can hire your first employee. Self-funded operators who skip the plan tend to run out of cash in month 9.

What is the typical EBITDA margin for a restoration company?

Mature, well-run restoration companies operate at 12-18% EBITDA margins. Owner-operator shops often run 5-10% because the owner is undercompensated. Multi-location regional players in good markets can push 18-22%.

Should I include reconstruction in my year-1 plan?

Most operators add reconstruction in year 2 or 3, not year 1. Reconstruction adds licensing complexity, longer DSO, lower gross margin, and dramatically more capital requirements. Lead with mitigation, build cash, then layer reconstruction.

For the full operator framework, see the Restoration Startup and Scaling Master Guide.

Equipment is the line item that surprises new restoration operators the most. The catalog photos look cheap. The package quotes from suppliers look expensive. The truth is somewhere in between, and the right answer depends on whether you’re outfitting one truck or three.

The line-item equipment list (water mitigation)

Item	Per-Unit (2026)	Qty (1-truck)	Subtotal
Low-profile air movers	$200 – $300	16	$3,200 – $4,800
Axial air movers	$200 – $350	4	$800 – $1,400
Small refrigerant dehumidifier	$900 – $1,200	2	$1,800 – $2,400
Large LGR dehumidifier	$2,200 – $3,000	2	$4,400 – $6,000
HEPA air scrubber (500 CFM)	$700 – $1,000	2	$1,400 – $2,000
Truck-mount or portable extractor	$3,500 – $25,000	1	$3,500 – $25,000
Moisture meter (pin + pinless)	$300 – $600	2	$600 – $1,200
Thermal imaging camera	$1,500 – $4,000	1	$1,500 – $4,000
Hygrometer / data loggers	$200 – $500	2	$400 – $1,000
PPE, hand tools, hoses, generators	—	—	$2,000 – $5,000
1-truck equipment subtotal			$19,600 – $52,800

Add fire and mold capability

• Fire/smoke: Ozone generators ($800 – $2,000), hydroxyl generators ($3,000 – $7,000), thermal foggers ($300 – $800), HEPA vacuums ($600 – $1,500), chemicals/cleaners. Plan on $8,000 – $15,000 added.
• Mold: Negative air machines ($800 – $1,500), additional HEPA scrubbers, containment poly and zipper doors, full PPE program. Plan on $5,000 – $10,000 added.
• Contents: Pack-out boxes, content cleaning station, ultrasonic cleaner ($2,000 – $8,000), storage racks. Plan on $5,000 – $20,000 added.

Vehicle costs (2026)

• Used cargo van + basic shelving: $35,000 – $50,000.
• New cargo van + custom buildout: $60,000 – $90,000.
• Box truck or step van: $70,000 – $130,000.
• Vehicle wrap (branded fleet visibility): $3,000 – $6,000 each.

Industry models for fully-equipped multi-truck launches put the initial fleet investment at ~$80,000 for two service vans, with total capital expenditures including specialized equipment around $172,000.

Three realistic startup tiers

Tier 1: Lean Owner-Operator ($80K – $150K total cash)

• 1 used van
• Water mitigation only
• 16 air movers, 2 small dehus, 1 LGR, 1 HEPA
• Owner-only crew

Tier 2: Mid-Tier Multi-Service ($250K – $450K total cash)

• 2 vans
• Water + mold + entry-level fire
• 40 air movers, 6 dehus, 4 HEPA, 2 negative air, basic contents capability
• 2-3 technicians

Tier 3: Multi-Truck Production Shop ($500K – $1M+ total cash)

• 3-5 vans + 1 box truck
• Water + fire + mold + contents + light reconstruction
• 80+ air movers, 12+ dehus, 8+ HEPA, full negative air kit, content cleaning station
• 5-8 technicians + dispatcher

Equipment pitfalls to avoid

• Buying everything new at launch. Used dehumidifiers and air movers from auctions or other restorers can cut equipment cost 40-60%.
• Underbuying air movers. 16 is the practical floor — large losses eat 30+ on day one.
• Skipping the thermal camera. It pays for itself in scope defensibility on the first 3 jobs.
• Cheap moisture meters. Insurance adjusters notice. Buy Delmhorst or Tramex.
• Ignoring asset tracking. By job 50 you’ll lose track of where your equipment is. Plan tracking from day one.

FAQs about restoration equipment costs

How many air movers do I need to start?

Minimum 16. A typical Cat 1 water loss in a 2,000 sq ft home requires 12-20 air movers running 3-5 days. Underbuying means you can only run one job at a time, which kills revenue per truck.

Should I buy used or new restoration equipment?

Air movers and small dehus: used is fine if you can verify hours and condition. Large LGR dehumidifiers: buy new — refurb risk on compressor failure isn’t worth the savings. Trucks: used with a real PPI is the budget winner.

What is the cheapest way to start a restoration company?

Lean owner-operator with $80K cash: used van, 16 air movers, 2 dehus, 1 HEPA, water mitigation only, owner does all production for the first 6 months. Add capability as cash flow allows.

Do I need a truck-mount extractor?

For pure water mitigation, a portable extractor ($3,500 – $5,000) is enough for the first year. Truck-mounts ($15,000 – $25,000) become worth it when you’re running 5+ jobs/week or doing significant carpet cleaning.

What software should I budget for?

Xactimate ($150-200/month base + per-estimate fees), Encircle or Magicplan ($50-150/month), DASH or Restoration Manager ($200-500/month), QuickBooks ($30-90/month). Plan on $400-800/month in software once you’re operational.

Full operator playbook: Restoration Startup and Scaling Master Guide.

Most restoration companies plateau at one truck and one owner-operator burning out at 70-hour weeks. The jump to two trucks is harder than it looks — and the jump from two to five is what separates a job from a real business. This is the operator’s version of how that scaling actually happens.

Why most restoration companies stay stuck at one truck

The 1-truck plateau isn’t a marketing problem — it’s a structural one. The owner is the estimator, the dispatcher, the lead tech, the QA reviewer, the AR clerk, and the salesperson. Every additional job adds load to all six roles simultaneously. There is no room to grow until at least one role gets unloaded.

The hiring sequence that actually scales

1. Hire #1: Lead Technician (~$40K monthly revenue trigger). Frees the owner from production. Pay $22-32/hr depending on market and certifications.
2. Hire #2: Helper / Apprentice (~$60K monthly revenue trigger). Fills out a 2-person production crew. Pay $17-22/hr.
3. Hire #3: Dispatcher / Office Coordinator (~$80K monthly revenue trigger). Owns scheduling, photo intake, customer communication. Pay $18-26/hr or $40-55K salary.
4. Hire #4: Second Lead Tech (~$120K monthly revenue trigger). Enables a second crew, second truck.
5. Hire #5: Estimator (~$150K monthly revenue trigger). Owns Xactimate sketch, scope, and supplements.
6. Hire #6: Project Manager / Operations Manager (~$200K+ monthly revenue trigger). Owns daily production oversight across multiple crews.

The dispatch problem

One truck is easy — you go where you go. Two trucks is the hardest dispatch challenge in the company because the owner is still mentally dispatching from the field. Three+ trucks demands a real dispatcher and a real software system. Restoration Manager, DASH, Encircle, or Job Nimbus are all viable. The wrong answer is a whiteboard in the office past truck #2.

Equipment cache scaling

The naive math is “double the trucks, double the equipment.” The real math accounts for utilization:

• 1 truck: 16-20 air movers, 2-3 dehus, 2 HEPA.
• 2 trucks: 40-50 air movers, 5-7 dehus, 4 HEPA. (Not 32-40 air movers — concurrent jobs eat more.)
• 3 trucks: 70-90 air movers, 10-12 dehus, 6+ HEPA, asset tracking system non-negotiable.
• 5 trucks: 120+ air movers, 18+ dehus, dedicated equipment tech who handles cleaning/maintenance.

Working capital as you scale

Insurance work pays in 60-90 days. Payroll runs every 2 weeks. The faster you grow, the more cash you have tied up in AR. A useful rule:

Cash on hand should equal 60 days of operating expenses + 30 days of net AR.

Operators who scale without honoring this rule end up factoring receivables at painful discount rates (often 2-5% per invoice) just to make payroll. Build a line of credit before you need it.

The org chart that supports 5 trucks

Once you’re past 3 trucks, the org chart is the company. A typical 5-truck shop has:

• Owner / President
• Operations Manager (production oversight, equipment, safety)
• Estimator(s)
• Project Manager(s) — 1 per 2-3 crews
• Dispatcher
• Office Manager (AR, billing, supplements)
• Lead Technicians (one per truck)
• Technicians / Helpers
• Equipment Tech (part-time at 3 trucks, full-time at 5)

That’s 12-18 people running ~$2-4M in revenue.

FAQs about scaling a restoration company

How much revenue do I need before hiring my first employee?

$30,000 – $40,000 in monthly revenue, sustained for 60+ days. Hiring before that level usually means the owner is still on the truck and the new hire is an idle expense.

How many trucks can one dispatcher handle?

A trained dispatcher comfortably handles 4-6 trucks. Beyond 6, you need either a second dispatcher or a project manager / dispatcher hybrid model with crews assigned to specific PMs.

What’s the right truck-to-technician ratio?

2 technicians per truck is the working standard for water mitigation. Fire and contents work often pushes to 3 per truck because of pack-out labor. Mold remediation runs 2-3 per truck depending on containment scope.

When should I add reconstruction services?

Most operators add reconstruction in year 2-3, after mitigation revenue is stable at $1M+ annual. Earlier addition spreads capital and management attention too thin. Reconstruction also extends DSO from 60 days to 90-120 days, which strains cash flow.

Should I open a second location to scale?

Not until your primary location runs 4+ trucks profitably and you have a proven Operations Manager who can be promoted to run location #1 when you focus on launching #2. Premature multi-location expansion is the most common reason 7-figure restoration companies blow up.

Operator playbook: Restoration Startup and Scaling Master Guide.

The single biggest reason restoration companies stall at 5-10 employees isn’t sales, marketing, or capital — it’s role confusion. When everyone owns everything, nobody owns anything. This is the org chart and role definitions that scale.

The four functional buckets

Every restoration company, no matter the size, operates through four functional buckets. The org chart is just how those buckets get assigned to humans.

1. Sales / Estimating: Get the work, scope the work, price the work.
2. Production: Do the work to scope, on time, with documentation.
3. Operations / Dispatch: Schedule the work, deploy people and equipment, monitor progress.
4. Admin / Finance: Bill the work, collect the money, run AR/AP, payroll, compliance.

In a 1-truck shop, the owner does all four. In a 50-employee shop, each bucket has 3-5 people. The transition between is where companies break.

Role definitions that hold up

Owner / President

Strategy, banking, major TPA relationships, key insurance carrier relationships, hiring, culture, financial oversight. Past 5 trucks, the owner should not be on jobs unless it’s a CAT event or a VIP customer.

Operations Manager

Owns production across all crews. Responsible for safety, equipment, training, technician performance, and quality control. KPI: jobs completed on schedule and to scope.

Estimator

Owns scope and pricing. Sketches in Xactimate, builds estimates, writes supplements, interfaces with adjusters. KPI: scope accuracy, supplement approval rate, estimate cycle time.

Project Manager (PM)

Owns 8-15 active jobs end-to-end. Customer communication, photo documentation, scope adherence, schedule, billing readiness. KPI: customer NPS, days to invoice ready, scope-vs-actuals variance.

Dispatcher / Coordinator

Owns the schedule. Receives intake calls, deploys crews, tracks equipment, handles afterhours rotation. KPI: response time, crew utilization, equipment turn time.

Lead Technician

Runs a 2-3 person crew on the truck. Owns documentation in the field, daily moisture readings, safety, customer experience on site. KPI: drying days, photo completeness, customer feedback.

Office Manager / Bookkeeper

Owns AR, AP, payroll prep, compliance filings, vendor management, certificate of insurance management. KPI: DSO, AR aging, on-time payroll.

How the chart evolves by employee count

Size	Org Structure
1-3 employees	Owner does sales/estimating/dispatch/AR. Lead Tech + Helper run production.
4-7 employees	Add Office Manager (AR/AP/intake). Owner still estimates and dispatches.
8-12 employees	Add Estimator and Dispatcher. Owner moves to sales relationships and oversight.
13-20 employees	Add Operations Manager and PM(s). Owner exits production decisions entirely.
20+ employees	Multiple PMs, dedicated equipment tech, marketing role, possibly second estimator.

RACI for the most common breakdowns

The biggest role conflicts in restoration org charts are around: scope changes mid-job, supplement responsibility, customer complaints, and equipment loss. Document RACI (Responsible, Accountable, Consulted, Informed) for each:

• Scope change mid-job: Lead Tech responsible for surfacing it, PM accountable for approving and updating estimate, Estimator consulted, Customer informed.
• Supplements: Estimator responsible and accountable, PM consulted, Adjuster the recipient.
• Customer complaint: PM responsible and accountable, Operations Manager consulted, Owner informed unless escalated.
• Equipment loss: Lead Tech responsible for reporting, Operations Manager accountable for resolution, Office Manager informed for asset register update.

FAQs about restoration org charts

When should I hire an Operations Manager?

When you have 3+ active production crews running daily. Below that, the owner can still maintain quality oversight personally. Above that, things slip without a dedicated ops role.

Should the estimator and PM be the same person?

In small shops (under 8 employees), yes — one person handles both. Past 10 employees, separate them. The skillsets diverge: estimating is a pricing-and-defense role, PM is a customer-and-schedule role.

Do I need a dedicated dispatcher or can the office manager dispatch?

Office Manager can dispatch up to 2-3 trucks. Past that, dispatch demands too much real-time attention to combine with billing/AR work. Split the roles.

What’s the right pay band for an Operations Manager?

$70K – $110K base + 5-15% performance bonus is the typical 2026 range for restoration Operations Managers, depending on market and revenue size. Multi-location regional ops managers push $130K-$160K.

How do I avoid hiring my way into bloat?

Tie every role to a revenue trigger and a documented KPI. If a role can’t be tied to a measurable output, it’s not yet a role — it’s the owner offloading anxiety.

Operator playbook: Restoration Startup and Scaling Master Guide.

The restoration M&A market is the busiest it’s ever been. Private equity has deployed $6 billion+ across 50+ platforms since 2018, with notable exits like HighGround (13 acquisitions in 5 years to Knox Lane) and American Restoration (an 8-brand roll-up to Morgan Stanley) proving the playbook. If you own a restoration company, understanding the exit math is no longer optional.

Current 2026 valuation multiples

Restoration company values vary widely by size, mix, and quality of operations:

• Sub-$1M revenue shops: 1-2x SDE (seller’s discretionary earnings). Often sell asset-only.
• $1M – $3M revenue shops: 2.5x – 3.5x SDE typical.
• $3M – $10M revenue shops: 4x – 7x EBITDA range, with quality operators commanding the high end.
• $10M+ regional platforms: 7x – 10x EBITDA on PE platform deals.
• Industry average: Average EBITDA multiples across restoration companies range 3.24x – 4.31x; the broader observable range is 3-8x.

What PE buyers actually want

The typical PE acquisition strategy is to pay 3.0x – 3.5x SDE for a $2M – $5M revenue shop, bolt it onto a platform, and exit in 3-5 years at 4.5x – 5.5x to a larger PE platform or strategic. To be the kind of shop they’ll pay for, you need:

• Clean books. 3+ years of clean P&Ls, balance sheet, and tax returns. No commingled personal expenses.
• Diversified revenue. No single TPA, carrier, or referral source over 30% of revenue.
• Recurring relationships. Long-standing TPA enrollments, multi-year property management contracts, sustained referral patterns.
• Documented systems. SOPs, training program, software stack, KPIs being tracked.
• Owner-replaceable operations. If the owner is the rainmaker and the technical lead, the multiple drops because the owner can’t transfer.
• Working management team. Operations Manager + Estimator + PM(s) in place, not just the owner running everything.

What strategics want (different from PE)

Strategic buyers — Servpro corporate, BluSky, ATI, BELFOR, large regional players — care about:

• Geographic territory (do they want presence in your market?).
• TPA enrollment status (programs they don’t currently service).
• Specialty capabilities (large loss, biohazard, document recovery).
• Contracts and relationships (commercial property management portfolios).
• Trained workforce (especially in tight labor markets).

The 24-month exit prep checklist

1. Months 1-6: Engage a CPA to clean books. Recast personal expenses to show true SDE/EBITDA. Build a 3-year P&L deck.
2. Months 6-12: Document SOPs, formalize org chart, name an Operations Manager who can run it without you. Diversify referral sources to cap any single source under 30%.
3. Months 12-18: Engage an M&A advisor (industry-specific is much better than generalist). Build CIM (Confidential Information Memorandum). Stress-test working capital.
4. Months 18-24: Run buyer process. Multiple LOIs preferred. Negotiate structure (cash at close, earn-out, rollover equity).

Deal structure: what’s actually offered

Most restoration deals are not 100% cash at close. Typical structures:

• 60-80% cash at close.
• 10-25% earn-out tied to revenue or EBITDA targets over 1-3 years.
• 5-15% rollover equity in the acquiring platform — often the highest-return component if the platform exits well.
• Owner consulting/employment agreement for 1-3 years to support transition.

FAQs about restoration acquisitions and exits

What multiple will I get for my restoration company?

Realistic 2026 ranges: under-$1M revenue 1-2x SDE; $1M-$3M revenue 2.5x-3.5x SDE; $3M-$10M revenue 4x-7x EBITDA; $10M+ revenue 7x-10x EBITDA on PE platform deals. Quality of books and management depth move you within those ranges.

What’s the difference between SDE and EBITDA in restoration deals?

SDE (seller’s discretionary earnings) adds back the owner’s salary, benefits, and one-time/personal expenses — used for owner-operator businesses. EBITDA is earnings before interest, taxes, depreciation, amortization — used for businesses where the owner doesn’t run daily operations. Most sub-$3M restoration shops trade on SDE; most over-$5M trade on EBITDA.

How long does it take to sell a restoration company?

From engaging an M&A advisor to closing, plan on 9-15 months. Including the 12-24 months of pre-sale prep work, the full timeline is often 2-3 years.

Should I sell to PE or to a strategic?

PE typically pays slightly higher multiples but expects more rigor (clean books, management depth, growth story). Strategics may pay less in cash but offer faster close and less due diligence intensity. The right answer depends on your goals — maximum dollars vs. maximum simplicity.

What kills restoration company sale value?

Customer concentration over 30%, owner-as-rainmaker dependency, sloppy books, expired insurance, lapsed TPA enrollments, pending litigation, missing equipment records, and undisclosed family employees. Address all of these in the 24-month prep window.

Full operator playbook: Restoration Startup and Scaling Master Guide.