Strengths

• Approximately 900,000 U.S. residential properties in 13 western states are thought to be at high or very high risk of wildfire damage, which has an estimated property value of $237 billion. 
•  Seventy four percent of restoration companies have reported increased earnings the last couple of years.
•  Companies in the industry are successfully expanding their services from just curative to preventative, which include moisture control systems. This expansion relies on customer education.
• The industry covers a wide range of different events allowing companies to expand their area of service.
• The four most common business models are bio-hazard and trauma cleanup, contents restoration, mold remediation and abatement, and water, flood and fire damage.
•  Businesses in the industry are mainly franchises that involve the use of "proprietary products and specialized equipment." The advantage of this is that most restoration and disaster recovery franchises can be operated without the need of renting office space, which allows franchisees to save the cost of renting commercial space.

Weaknesses

• In order to open up a business within the space, an estimated investment of $50,000 is typically needed.
• Restoration training and equipment can be expensive and require constant investments due to the rapidly changing way restoration is effectively done. This involves purchases of air movers, dehumidifiers, air scrubbers, and other tools.
• Only around 25% of work completed in the restoration industry is commercial, whereas, 65% is residential. This infers companies focusing solely on commercial properties are at a disadvantage.
•  Twenty-five percent of restoration business owners report suffering up to two months of insurance payment delays, while an additional 12% report waiting more than eight weeks.

Opportunities

• It is estimated that around a half million structural fires occur each year. Of this, 30% are commercial and 70% are residential properties fires.
• North America is vulnerable to major weather and catastrophic loss events. Recent climatic events include Hurricanes Harvey and Irma in 2017, wildfires in California in 2018, tornado outbreaks, and
• flooding events. It is projected that due to climate change these events will occur more often.
• In the first six months of 2018 alone, the U.S. saw $6 billion in damage from weather disasters.
• The "steady emergence of medical data", mostly due to information accessibility, is leading companies to understand indoor air quality as related to health and are more likely to purchase preventative systems or schedule regular maintenance.

Threats

•  Thirty four percent of all business growth in the industry depends exclusively on weather events.
•  The top threats to businesses, according to business owners, are recruiting, retaining quality staff, maintaining margins and profitability, differentiating their company, maintaining a steady cash flow, and increasing costs of doing business within the industry.
•  Clients are demanding the industry adapt to using less toxic chemicals in the restoration process.

Overview of Immediate Trends

•  Natural disasters like hurricanes, wildfires, and flooding are driving demand for commercial disaster restoration professionals and are a current trend of the commercial disaster restoration industry, as per industry experts.
• Commercial disaster industry professionals also agree that technologies with mold detection, digital documentation, and drones are an immediate trend in their industry.
•  Employee burnout in the commercial disaster restoration industry related to factors like unprecedented busyness, increased demands of insurance companies, and frivolous lawsuits is currently trending as well, according to industry experts.

Immediate Trends

• "The US is vulnerable to a wide variety of natural hazards" including flooding, drought, wildfires, tornadoes, and earthquakes. These natural disasters continue to increase the need for commercial disaster restoration services.
•  Canada is also exposed to many natural hazards, and weather or weather-related disasters account for approximately 80% of all disasters, continuing to increase the demand for commercial disaster restoration services.
• Better mold detection technology has helped the public to begin to become more aware of mold and aided commercial disaster restoration professionals in their mold removal efforts.
• The common availability of smart phone devices and digital technology is streamlining the way that commercial disaster restoration professionals gather and report data.
• Drone technologies are currently being used as a damage analysis tool for properties and structure exteriors by commercial disaster restoration professionals in the US and Canada.
•  Employee burnout is a growing concern within the commercial disaster restoration industry, and a study is now being done by Middle Tennessee State University to better understand this disturbing trend.

Overview of Future Trends

• Increased professional credentials and licensing for commercial disaster restoration professionals of natural disasters is a controversial future trend that may impact the commercial disaster industry, according to industry experts.
• Commercial disaster restoration professionals also agree that increasing public awareness of and sensitivity to materials that are hazardous such as mold and chemicals will also be a future trend that will impact standards and practices in commercial disaster restoration industry.

Future Trends

• Professionals in the commercial disaster restoration industry are currently debating whether more professional credentials and licensing is needed to handle natural disasters. Some believe that is definitely necessary, while others believe that it could "bog down the restoration process and make fast-acting responders potential violators. "
• The public is becoming increasingly aware of and sensitive to hazardous materials in their body and environment that may require the commercial disaster restoration industry to make changes to their standards and practices in the future to effectively respond to public concerns.

Research Strategy

WEATHER EVENTS

•  Every state has experienced at least one disaster event that totaled more than $1 billion in losses since 1980, which demonstrates the need for disaster restoration companies that can help large-scale businesses.
• In 2017, there was a spike in weather events, which has shown no sign of slowing down. The worsening severity of storms is leading to an expanding market for home and commercial restoration.
•  Weather events such as cold weather, spring rains, summer storms, and the resulting floods are predicted to remain as strong in the foreseeable future.

• There are 170 million commercial losses every year, but they vary in costs. For example, it may cost a commercial building $20,000 to dry out after a flood or $1,500 to dry a residential kitchen.
• There were more than $195 million in flood-insurance claims from more than 4,000 national flood insurance programs.

• The 2018 campfire in California destroyed more than 18,500 buildings alone, not including the other wildfires such as the Medincino Complex Fire, which burned more than 450,000 acres. The 2018 wildfires were exacerbated by conditions of extreme drought, another climate condition that contributes to the necessity of restoration companies.
• Wildfires carry a total cost of $5 billion per event.

• In Florida, Hurricane Irma led to 689,000 residential property claims and 51,396 commercial property claims, resulting in a shortage of restoration workers for both homes and businesses.
• Hurricane Florence impacted over 80,000 businesses.
• Hurricane Michael saw $624 million in small business disaster loans for more than 12,000 people, which included more than $112 million in damage.

CATASTROPHIC EVENTS

•  Catastrophic events and large losses are the biggest challenges for major client groups such as property managers and insurance companies, which contributes to the increasing demand for commercial disaster restoration companies.
• There have been continued calls for national credentials for those that restore disaster zones following major disasters, a trend that has been increasing since Hurricane Katrina due to the rising legislative challenges.

NEW TECHNOLOGIES

• New technologies have made it possible for professionals to detect environmental dangers such as mold in homes and commercial properties. New energy-efficient structures tend to be conducive to mold growth.
• Some restoration companies are educating their customers and offering moisture control solutions instead of just emergency restoration. TOMI/SteraMist is given as a new technology that works for both emergencies and regular use for indoor air quality and disinfection in hospitals, schools, and other industries.
• The rise of events in school such as mass shootings, has contributed to the demand for bio and trauma cleanings, and other bio-concerns in everyday locations.

RESEARCH STRATEGY