Good afternoon, and welcome everyone to Ready, Set, Scope with, myself, Leah, and, my colleague, Shaun Coghlan, our Director of Product Management. We have several hundred people registered for this webinar today. Super exciting. Perfect. So like I said, my name is Leah. I’m the Director of Product and Content Marketing here at �Թϲ�����. And I’m joined by Shaun Coghlan, our Director of Product Management. He is the the man, one of one of the people responsible for bringing our �Թϲ����� Scope products to market. So �Թϲ����� Scope, this is a continuation of a webinar that we held back in November where we gave everybody a preview of what was to come. But at that point, it was in very early development stages. We are showing you sort of things on the back end. Nothing was built or plumbed into the �Թϲ����� app yet. That is not the case today. We have been working really hard behind the scenes. And as of yesterday, we now have a production version in the app in beta that is ready to show everyone at this webinar today. So we are so excited. The future of scoping really is taking shape, and we don’t want anyone to get left behind. We want everybody to take this journey with us. So Shaun, if you can go to the next slide. What we’re gonna do today, we’re gonna give you an overview of what Scope is. If you missed that webinar back in November or if you’ve missed any of this the conversations we’ve had around Scope, we’ll give you an overview of that. Shaun’s gonna give you a live overview walkthrough of a real a real job where real scopes were produced and give you a walk through of that in the app. Like I said, it is in production in the app in beta today. But the bulk of this the bulk of this webinar today is going to really talk about documentation excellence. AI is amazing. AI has so much incredible potential to drive efficiency in the business, but AI is not magic, and AI relies on really good data. And the data that that relies on is the documentation that you’re collecting in �Թϲ�����. So that’s a lot of what we’re gonna talk about today is how can you get set up. That’s why we call it Ready, Set, Scope. How can you get ready and set for Scope through your documentation? How can we make sure that your teams are doing the things that they need to do to make sure that you’re ready to take advantage of Scope when it goes live? And then, of course, what I’m sure everybody is here to to hear about is the launch details. So we’ll cover some of those details including when and how much and all of that good stuff, and then we’ll wrap up with q and a at the end. So I’m gonna stop talking, and I’m gonna throw it over to Shaun. Alright. Thanks, Leah. As Leah said, we’re super excited for everyone to join here, and this has been, quite a journey for us, you know, �Թϲ����� over thirteen years serving yourselves and providing the best app for data collection and documentation on jobs. And we’ve spent and devoted the last year to creating this product, both from the back end perspective. And then as Leah said, it’s now in our product, and we’re starting our testing. And with �Թϲ����� Scope, our whole goal was, you know, how can we help you and on the work you need to do to create those defensible scopes. We’ve heard the line over and over again. You know, when you’re if it’s an insurance claim and you’re talking with an adjuster, you know, you’re not really arguing over the price or, you know, the cost that’s on the estimate. You’re actually arguing against the scope of work, which is the what and the why and and the how of things need to get done, not necessarily how much it needs needs to cost. Right? That’s kind of a byproduct of all the things that you need to do. And to create that scope of work and what people do today is leveraging �Թϲ�����, adding in all that information into �Թϲ�����, all the photos, all the notes, reports that you generate that then helps yourself, your project managers, your estimators understand what happened on that job, and then turn that into, you know, things for the team to do, create an estimate on the back of that. And with, the advent of AI and accessible AI, it’s been around for a long time, but now services that we can pull together, not just one, but multiple services in the background to take the data that you’ve entered in the �Թϲ����� and using this technology saving yourselves hours of work to transform it into something usable that can then you use on downstream workflows. So going right from documentation to understanding what happened on the job, what needs to be done, and then getting you to that estimate. All within the context of us restoration, restorers, IICRC standards. It’s all validated and verified, and we have aimed for accuracy in what we wanna do. Really, the goal is turning, you know, your team from authors where they need to spend hours, understanding what happened to job to create this information to share with whoever they need to share it. Let’s turn them into editors where we can get you ninety percent of the way there, and then you can just take what you need to and and run with it. And what we’ve really focused on beginning, because there’s many types of scope of work, we’ve really honed in on the mitigation scope. So focusing on, you know, water damage, fire, mold, impact, those types of jobs. You know, we know there are content scopes of work and estimates that need to be done and rebuild scopes and estimates that need to be done. We will get there, but we really want to focus on the mitigation, the start of that property loss and how you need to do it. And the whole purpose and what we wanna do, like, it’s great when technologies come out, and they can help you. What’s not great is when they force you and force your teams to completely change your processes. We did not want to do that. Your team is already in the field leveraging �Թϲ�����, you know, the best app in the field to create and collect the documentation of what actually happened on the job, that source of truth, and you don’t need to change anything. Continue to document the way you document. Use �Թϲ�����. All the data is already in there, and we’ve built this application on top of our infrastructure and that data that transforms it into the scope with a click of a button. So don’t worry about change management. We’re not disrupting every anything or interrupting your work, but we wanna change how you use your time going forward. We really think that’s one of the most powerful things that we’ve we’ve done here. And the way we’ve done that is, as I’ve said, kind of through innovation that we can provide interruption to how we do things normally without disrupting how you things do things normally. So we already collect the data in �Թϲ�����. And to date, we’ve done really great jobs of taking that data, turning it into a report that you can then share to justify the work that you’ve done, to justify why you put line items x, y, and z on your estimate. Now what we’re doing is going before you need to create that PDF report and using the data, whether it’s photos, transcripts from the videos that you take, notes, floor plan data, which has all the measurement information, we will take that and transform that into a scope of work document. And from there, you can tell your teams in the field what needs to be done in the kitchen, in the bathroom. Have your PM or your estimator, depending on your workflows, take that scope and turn it into an estimate in Xactimate or whatever software that they use. So you can create tasks out of that. So and then from there, with this starting with the automation of of generating a scope, over time, we’re gonna build on top of that and help add more innovation to other workflows that you have. But it all really starts with what data’s in the job, how can we first transform it into what is the scope of work. And then from there, right now, you can take it and do what you need. The future, �Թϲ����� will take it and help you do more of what you need to do. So how does this engine work? We’ve kinda touched on it a bit, but the �Թϲ����� AI that we’ve developed kind of in the background is not simply a LLM that we’ve made a really fancy giant prompt for. We’ve we’ve architectured and designed an application that sits inside the �Թϲ����� platform that takes the data that you capture, which is really the first step. Liam mentioned this in the beginning. AI is great, but it’s only as good as the inputs. So really strong comprehensive data and as much context as you can. So with �Թϲ�����, we give you the ability to say, here are the rooms in the property. We have a kitchen. We have a bathroom. We have a bedroom. Allows you to put data inside of each of those rooms, photos and notes specific to that. We let you take a a video of the the entire loss, and then we’ll take that transcript and use it to validate and connect it with the information. And then any readings and any floor plan data, all of that data that you put in there, we use and move into step two, which is kind of the analysis phase. So this is where we have used, again, not just LLMs because we produce the scope that’s output that is leveraging generative AI to write it. But we have many nodes and many other technologies in there that that solve the problems for us. So we have image and computer vision with image recognition. We have spatial calculations looking at, the floor plan that then helps us derive equipment calculations and quantities for tasks that we may list out in the scope. We have data analysis and cross cross referencing. So what does that mean? You record a walk through video that that you say what’s happened on the job. We take the transcript from that, connect it with the photos that we see in each of those rooms to help validate, yes, there’s carpet in the bedroom. It is wet. You know, what are the tasks that need to create from that? You mentioned there’s you know, baseboards need to be detached. We detected baseboards in the photos. Let’s make sure we call that out in the task. And then after step three is where you come in, where your expertise comes in, is we create this scope that provides you a narrative, a breakdown of room by room task, and then you can take that and review it, add things to it that makes sense for your own SOPs or anything specific to that job, or remove things that if the right context wasn’t there, we may have provided some information, and it can all be corrected. But everything we put in there is justified against the IICRC standards, whether that’s the S500, the S520, or the S700. So all those standards are used to validate and justify our scope output. And we’ve really, really focused on accuracy. So AI is super good. If you attended our webinar last week and our AI boot camp, we really talked about kind of, you know, accuracy versus completeness. And normal LLMs, the generic LLMs that are out there really go for completeness, and they have confidence in what they wrote, but it may not be accurate. Our approach that we know you need, which is accuracy over completeness. So based on the information that we have, we’re gonna ensure that what we write is accurate. And if there’s some missing information, then we’re not going to fill in the blanks on your behalf. We may call out where more information could be added to help the scope, and I’ll show you what I mean by that. But, really, we’ve gone for accuracy within within our scope. Before we move on, just one other thing. I wanna touch on something that’s really important when we look at technology, particularly with AI and everything that’s out there. So data security and privacy. We’ve talked about this before in previous webinars. But at the end of the day, the data is your data. That’s our contract with you. It’s in the �Թϲ����� terms and conditions. We store your data. You capture photos. You enter notes. You run reports. You own that data, but we store it on your behalf. So we are not the owners of the data. We can’t do anything with it without your permission. Right? When we do use AI and do use the data, we are stripping out PII information. We are not sending over your customer’s information, the addresses, your company information. We’re not sending that over. We’re just sending over information from the claim. The name of the room, the photos associated with it. The name of the note, the data in that note. Not, hey. This was a note from Shaun’s house that flooded three weeks ago. It’s really contained to the data that we’re sending over there. The other important thing is because you own the data and our contracts with the technology that we use, we are not training foundational models. And your data does not get used to train foundational models. While we may use ChatGPT image analysis software, services in the background, that data cannot be taken by those companies or services that we use to train their fundamental models. It stays within �Թϲ�����. You own your data. And, of course, at the end of the day, everything is end to encryption. We’ve always had that break from the mobile to our servers to the web. We ensure as best to our abilities that that data is secure and encrypted and no one can access it except for you and those that you want to have access to it. So let’s see a scope. Enough of enough of this slide, Shaun. Let’s just get right to the the heart of the presentation. So here’s a job that we did here at �Թϲ�����. Really simple kind of category one, water loss. I’m gonna highlight kind of the data that we have in this claim before I go right right into the scope. So if I jump over to a general note so what we did on this job and this is kind of a complete job that we’ve ran through. And you can kinda look at this time stamp. This was done in late January. But the loss started kind of on the Sunday. We got there on the Tuesday. So we created a note that gave us the job description, the damage description. We kinda outlined a whole bunch of information on it. As the job progressed, we added general notes to this job to talk about the things that have been done. So some of this is standard practice for some of our customers. Some of this is best practice to help track how how the job goes. From a core data perspective in terms of what happened on the job, we did do a floor plan of the space. So this was a single level house. Kind of this is the property. For your benefit, what happened in the loss was the supply line here burst into the into the bedroom here and kind of affected the back half of the house. So that’s kind of the loss that we’re describing we’re describing here. With that, these are all the rooms that were in the property, including rooms that were unaffected. We did document that. That’s not something that always has to be done, but we did document that for for our benefit. But, really, if I go into kind of the primary bedroom, this is where the most of the damage was, and it seeped into those other rooms, the bathroom, the hallway, and the back bedroom. But we took photos throughout the job. So these are photos towards the end of the job where we had equipment on the project. But, really, we did the initial inspection. We did our overview photos from from each room. We did do a three sixty photo, of the room, which is a great way to provide overview data and kind of other other information. So with that, we’ve kind of repeated that process for each of these rooms. We added notes in each of the rooms both on day one and throughout the job. So once you’ve done that, once we’ve done kind of we did this, we did initial inspection, we did a final inspection. I’m gonna show you the scope at the end of the job. But in �Թϲ�����, what we’re doing now is on web, you can see here that we’ve now exposed a new tab where you’ll see a new tab, which is �Թϲ����� Scopes. And we have a page that will list out all the scopes that are generated. To, to generate a scope, when we talked about, we didn’t want to disrupt and interrupt the work that you normally do. So all you need to do now to generate a scope both on web and mobile, and I can show mobile in a minute, is once there’s data on this claim, you essentially click generate a new scope. Here, you can see all of the structures and rooms that are on the job. If you have multiple structures, we will highlight multiple structures. We preselect everything on the job. But if you wanted to remove some of the rooms that weren’t affected or you may use a room for instructions, you can deselect and remove them from from the job itself. We won’t take any of that data. And if there’s general notes that you put in there, sometimes you may have a note in there around here’s the garage code, or information about other contacts on the job. You can deselect that, and that will go into it. So once you’ve done that, once you’ve selected structure in the rooms and you selected the general notes, all you do is hit generate. Of course, you have to put a title. Our UX, make sure there’s a title. So let me put this in here. It should scope. And then generate. And then it’s off and generating. So this and we’ll talk about this later, but this job had a video walk through on it as well. And what’s happening is we will pull out the transcript from that video, and it gets used to reinforce everything that we put in the scope. Once the scope comes back, and what we’ve been seeing is less than ten minutes on our jobs, those scopes will be returned. Now let me jump into what it actually looks like. So this new section, we have this new item called the �Թϲ����� Scope, which is essentially a document within within �Թϲ����� that will outline, the core project information that we wanna talk about. Before I get there, just so you know, this is a completely editable document if you need to. So you can review it, but you can actually go in and edit this document. So if there are things in here that you need to add or you need to cross reference or you need to change or you want to remove, you can go in here and simply start adding text in there. We’ve introduced tables in the �Թϲ����� so you can actually add additional rows if you wanna add additional rows. So you have the full ability to take this scope and manipulate it as you need to for that job. Now I’m not gonna go through how we how we edit it, but I just wanna let you know that you have complete control over the output of this. Review it. Change it up as needed. So the outline of the scope is pretty straightforward. In the beginning, we have this narrative project section. We talk about the timelines on the job. So when was the, loss date? When was the time since intrusion? When work started, you know. We pull all this information from whether using job events or from the time stamps and and metadata on each of the photos and videos and notes. We have a quick summary of the project information, what was the source, what was the class and category of the water, and some of the spatial and dimensions, like, what was the square footage? And on square footage, I’ll talk to that. If if there isn’t a floor plan on the job or if you haven’t noted down dimensions, that’s okay. You can continue to use Scope. We’re just gonna highlight that there were no dimensions. And if you add dimensions, you’ll get a more robust scope. You can see here I got a little toast. That scope that I just started generating about two minutes ago has already completed. So we pretty quick to generate these things based on all the data in the job. The next thing that we have is kind of a narrative of the project itself. What’s a quick summary of based on the information from your notes and what we’ve parsed out from the video transcript, from all the photos, from Hydro information, you know, what happened on this job? And this summary is really good that if you need to produce a twelve hour or twenty four hour report to send to a carrier, you can simply copy and paste this and add that to your report or add the scope itself to a PDF report that you can use. Next, we get into what we think is the most important part, which are the tasks. And we’ve broken this down into project level tasks. So So if you’re used to using Xactimate and you create kind of a general folder for kind of the high level tasks that don’t belong in any specific room, these are the tasks that align to that. So whether it’s was this emergency service or are there after hours? Did you need floor protection? Kind of all these gen general things that you should and could apply to your estimate in the project. Then the language that we use, while it’s not a specific Xactimate code or anything, we are using kind of the right language that you and our industry are used to when we talk about these line items. So when you need to go and create that estimate, these line up perfectly with what you would actually use in Xactimate or other software. Now we get into the heart of the scope, which is the room by room breakdown of all of the affected rooms. So we provide a quick summary of what happened in this specific room. We call out any dimensions that were specific to that room and where they came from. We have affected materials that we pulled out from not only notes in the photos, but from Hydro data. If you created a moisture point, we use that information to cross reference and validate and verify materials that we call out here. And then for each room, we call the specific tasks based on the narration and all that data that we feel need to happen in this room specific to the mitigation of that of that job. And then we go and repeat that for every single room that was identified as affected within the within this project. And if this isn’t a simple copy and paste, each room is analyzed independent, and you’ll see very specific details. So for instance, in this one, this is the primary bedroom where the loss happened. In the launch in the video, we talked about, oh, we need to detach the big sports from from the job and use it. We parse that out looking at floor plan. We saw the square footage of that room, and we added detached baseboards, and here’s a linear square footage from that from that information. So really synthesizing that data and producing this output to help you, you know, tell your team what you need to do. Hey. Make sure we remove those baseboards, and then use that for your estimate once you go to create it. And, again, we repeat this on and on for each of the rooms that were on that job. We also list out any unaffected areas as well just to highlight based on the information whether they were only in the floor plan or we’ve pulled it up from other sources. Here’s other data that was on the job that we don’t feel is impacted by this loss. And if you provide us dimensions and we know it’s a water loss, we will do kind of the s five hundred equipment calculation for you. We will group the rooms in the drying chambers. If you use Hydro, that data goes in to help us organize the rooms into drying chambers as well. And we really call out, you know, how much how many dehus and air movers are needed at the project level, but then we go and break down the air movers per room based on what we need what is calculated from the S500. We highlight placement suggestions on how to place the equipment in there. And then the kind of last section is really the IICRC references. So whenever we’ve quoted and calculated the category loss or water loss or other information, we call out the specific sections of the s five hundred or the s five twenty or s seven hundred and highlight this here. So you can use this information maybe as F9 notes in Xactimate to justify certain line items that are there as well. And lastly, we have a data quality note section, which will kind of information from our system to you on here’s where we pulled some data, here’s some data that we may think is missing. So for instance, if there was no plan and there’s no dimensions, we’ll highlight, hey. You were missing some floor plan and dimensions. So this is really, like, incredible that within three minutes based on the work you already have to do, which was calculate or which was document the room, we’ve produced and provided this scope. And this all lives on mobile as well. So if I go into mobile, you can see this scope. Here’s the one that I just generated, and you can review and edit that. So if you wanna do it in the field, you can do it in the field as well. Now I think I’m done for a few more minutes, and I’ll pass it back over to Leah. Great. Thanks, Shaun. So one of the things that Shaun has talked about is and and I mentioned it at the beginning, is that the scope output the the quality of the scope that you get is really dependent on the data that is available in the file. We prioritize accuracy. If the data is not available, we will not make assumptions about that project. The people on-site capturing the data and the context of that project, that is key. They are the ground truth for that project, �Թϲ����� Scope is never going to invent things. It is going to call out in the scope where data was missing or unavailable. That is a key differentiator for what we’re doing here versus doing something in a in a traditional, like, ChatGPT or a chatbot where you’re asking it to produce a scope. It’s priority like, ChatGPT’s priority is a complete answer, and it’s really good at writing. So chat it’s gonna give you a really beautifully written scope, but it’s gonna throw it it might throw a bunch of details in that it’s made assumptions about based on data that was unavailable. So all that to say, how you get the most accurate data starts in the best app for field documentation, which for for almost fourteen years now, �Թϲ����� has been the most trusted field documentation platform for restoration contractors. It is easy to use, it’s reliable, and it contains all of the possible tools that you could need to document that the context and data that needs to be documented on that job to justify your scope of work, which is what we did in the past. We would create really great reports with all of this data that helped you justify your scope of work. Now we’re taking all of that data and putting that data to work for you, and actually creating that scope of work for you. That using this app that actually works in the field, it’s a field first solution, it’s easy to use, Technicians love it. That’s why we’ve, you know, been around for for as long as we’ve been around. And it includes things like all your photos, your videos, including three sixty that we introduced last year, all your water mitigation, so moisture readings, drying chambers, dry standards, psychrometric, all of those things in Hydro, Contents, all of your notes, your floor plans. Shaun talked about measurements. Measurements are critical to to finding scope and adding those quantities and square footages to to the scope. So you want we have floor plans in there. Obviously, we can create detailed reports, and we have additional platform, things like payments, custom forms, and the ability to talk to your to your end users. Shaun, if you wanna go to the next slide. But I I think it’s really important that we talk about what is the critical documentation, that key documentation to produce an incredible scope. What are those sort of the the bare minimums? What are the standard operating procedures, the SOPs that your team should be doing on every loss so that you can get the best scope possible? And then it really boils down to four things. The first one is a description of the loss. And what Shaun and I are gonna do over the next ten or fifteen minutes is go through each of these four items and talk about how the different ways that you can get that data into �Թϲ�����. It’s not, oh, it’s not a specific process that you need to follow. There’s a couple of different ways depending on what works best for you. So the first thing that we need is a good description of the loss. The second thing is measurements. Getting measurements into the app or into the scope is is important for generating equipment calculations and for quantities and things like that. Without measurements, we won’t do we won’t provide those things. We won’t make them up, but we just will will leave them sort of blank with a caveat that we didn’t have measurements. We can’t do this. Photos, of course, are important important. We’re gonna look at photos. We’re gonna use our image analysis to verify and validate against the description and make sure that everything makes sense. We’re gonna use gonna extract materials and identify different materials. We’re gonna identify fixtures that are that are in there and just make sure that everything is cohesive and synthesized and makes sense. So photos, of course, are are important. And then that room specific information. When you get into writing your estimate, the estimates are written room by room, and we wanna make sure that we’re breaking down those tasks into into room those that room specific information. And so the most helpful thing is to use the �Թϲ����� app as as intended and create those rooms and put all of that room data into into those rooms specific in into those rooms specifically. So let’s go through each of these one by one. Before we get to that, we have put together an incredible resource for you. So we’ve put together this page, a documentation excellence resource for restoration teams. It includes a whole bunch of really great checklists, templates, cue cards, everything that you need to really level up your team’s documentation in �Թϲ�����. I wanna point out specifically the template for the documentation excellence workshop. It’s linked from this page. It’s a really great, workshop that you can run on a production meeting or a, you know, a weekly meeting with your team and just assess where you’re at. See where you’re or at with your baseline documentation today. Implement some new things and see where you’re at a couple of weeks from now and see if you can improve the the documentation. There’s also a link to register for some live trainings, and we’ll provide that link, at the end of this course as well. So just a really great resource if you want, to help your team level up their documentation. So we talked about providing a a good damage description or a description of what happened on that property. And the gold standard, the way that we really encourage everybody to do this is through video. Do a video walk through. Now I should mention, we’re not gonna use the video itself, as part of the scope. We’re not using any sort of video analysis. What we’re gonna do is extract the the transcript from that video. But why we encourage a video walk through is show and tell. We’ve been doing show and tell since we were in kindergarten. Right? So you wanna walk the property, provide your expert narration. Tell tell the phone, tell tell the tell everyone what’s going on in that property. What do you see? What do you hear? What’s going on? And provide that additional expert level of context and detail, and that’s gonna we’re gonna take all of that rich contextual information and improve the scope accuracy. So make sure you’re giving an overview of the situation, the source of loss, describe how the water migrated throughout the property. Go into each of the the rooms that were affected, and talk about the resulting damage, give an overview of how the room was affected, the impacted materials. One of one of my colleagues, he talks about, you know, AI is again, it’s an it’s an amazing tool, and image analysis is so great. And you can, you know, use Google Lens, and you can use your iPhone to, like, identify flowers and stuff. But when it comes to water mitigation, dark carpet in a picture looks the same whether it’s wet or whether it’s dry. AI can’t know if that’s wet or dry. The person on the site is gonna be the one that can provide that information. So if you go into the primary bedroom and it has dark carpet, you wanna say the carpet is saturated. That’s a that’s a key piece of contextual information along with other things that are in the file that are gonna help build that build that scope. Other things to include in that in that walk through, safety considerations, so any potential hazards that need to be considered like mold, asbestos, lead, anything like that. And then describe the next steps. Describe the initial steps that are needed to mitigate the loss. So to get that damage description, best practices is a video walk through. There’s other ways to do it. This is just the one that that we would encourage you to use. I’m gonna Shaun’s gonna give an example of of one that we’ve that we really like. Yeah. I think we should, you know, do what we say and do a show and tell us. This is a this is a video of that we have on that file that I just showed you that Joe and our team walked this job and narrated it. So we’ll play it’s a two minute video. We’ll play we’ll we’ll just play a portion of it. But when creating this video, it’s important where we think best to do that is find the room where the source happened, where the loss happened, and start there when you start your video. And then you can leave that space and then start walking. You’ll see Joe do that kind of in this in this job. Alright. Let’s go ahead and capture the damage. So we’re in the primary bedroom. Source of loss is gonna be this wall over here. What we have is we have the supply line that has become damaged in the wall, wet the carpet. As you can see, we got baseboard, drywall, and some contents. Scope of work, we’re gonna need to extract the carpet, lift the carpet out, potentially remove the padding. We’re also gonna have to detach the baseboards and manipulate this furniture. In the next room, we have a little bit of hardwood floor in the hallway, and it appears that the wall So I’ll pause there in the video. So we talked about as he left the primary bedroom so when he entered the room, he called out the name of that room. And that way, we can take that transcript and that data. So when Joe says primary bedroom, we can align that with in the file, we had a room called primary bedroom with a whole bunch of photos. So that allows us to match these things and increase our confidence as we justify and validate the scope. And he said the same thing that when he left the primary bedroom and entered into the hallway, he called out the hallway, and then everything he speaks about that we can then use. So it’s pretty pretty powerful. Like Leah said, this is one of many ways to add the job description. You can create a note. You can use the speech to to text part of iPhone and Android or do a video. We think the video works works quite well. And moving on, I think I think we got that one done, Leah. We can move on to measurements. We did. I just I do wanna answer one question that was in the chat before I before I lose track of it. I just wanna remind everyone, if you do have a question, please throw it into the Q&A box, or I will lose track of it. But I think there was a question asked specifically about video, and I wanna address it now. So are the video is the video analysis only in English, or can we also do it in Spanish? I think it’s important that you can and, Shaun, correct me if I’m wrong here, but you can do the video walk through in English, French, or Spanish. That’s correct. Yep. And we will we will and and we will absorb that information into �Թϲ����� AI and into the scope, and you will get that info that insight into the into the output as well. So walk in your walk and talk in your in your preferred language. And and just following on language, so that’s completely correct there. We detect the language of that video. The transcript is done in that language. We will bring it into, you know, the computer language that it needs to parse it out and then produce the output. The scope can be done and produced in English, Spanish, or French similar to some of our other functions in �Թϲ�����. Depending on the browser language of your Chrome browser is set to French, the scope output will be French. If it’s set to English, then you’ll get you’ll get English as well. K. Okay. One of the next key pieces of data that we need for scope is measurements. Now, again, it’s a key piece of information to get an incredible scope. If you don’t provide measurements, you’ll still get a good scope. They just won’t have those quantities and and square footage and and measurements, and you won’t get equipment calculations and things like that. So best practices to get an incredible scope, a really useful scope, is to provide those measurements in the app. So there’s a couple of ways you can provide those measurements. The gold standard, the fastest and easiest way to do it is to use to do an �Թϲ����� Floor Plan. And Shaun’s gonna talk through some of the best practices for capturing and making sure you’re getting a really good floor plan. But some other ways that you can that you can get measurements into the app, if you’re using Hydro on a water job and you’re and you’re adding room dimensions into into your drying chambers, we’re gonna we’re gonna take that information in. If you have a floor plan and hydro, that’s just extra data. We’re gonna we’re gonna look at that information, and we’re gonna compare and contrast and synthesize and make sure that everything makes sense and matches up and aligns. So you can use Floor Plan, can use Hydro, or you can put it in a room note. Room dimensions into a room note. So go into that room, throw quick a quick quick room note and enter the dimensions, and we’ll add we’ll add the that that information into the scope as well. So measurements, not absolutely required to get an output. You still get an output without measurements, but to get, you know, the best version of Scope and the most useful version for you is to make sure there’s measurements in there in some form. Yeah. And think as Leah said, like, Floor Plan is is the gold standard. I’ll I’ll show a video of it quickly. So here’s kind of a best practices that we have on how to get the most accurate floor plan possible. So this is one of the videos that we have in our learning hub. Please go out there and get lots of information on not only how to do a floor plan, but how to use �Թϲ����� and all the features that we have. But here’s a quick walk through of, like, the best practice of performing the scan and walking the property. When it’s time to scan, remember, your phone can’t do all the work on its own. You need to move your feet. Don’t just stand in the doorway and pan your phone around. Step fully into each room and walk along the perimeter. Move around beds, furniture, and obstacles so your camera can see every wall and corner. Think of it as taking your phone for a walk. You’re showing it the space. Here’s a simple mental check. Make sure your right shoulder has walked past every wall in the room. If your right shoulder hasn’t passed it, your phone probably hasn’t seen it. Try to stay about three to six feet away from the walls. That’s the ideal range for capturing accurate data. Right there, I think the biggest trick when, you know, we’ve launched this is it three years now, Leah? It’s been quite a while since we’ve put Floor Plan out there. But that keeping in mind, if I can just walk the perimeter and keep my shoulder against the wall, and if there’s a couch in the way, go around the couch and kinda try to get back to that wall. If there’s a bed in the way, that will essentially kind of paint the entire space with the video and allow us to then take that video and analyze it and produce produce the floor plan. And that I think that’s like, that has really helped me ensure that every floor plan that I do has, like, high high high accuracy to it. And as Leah said, like, dimensions are really important to get a, you know, as accurate and more complete scope. But, you know, to do the floor plan, know, think we’re under six hours that you’ll get the floor plan back. If you wanna get a quick scope of work done on that day one after the initial generation, run that scope first. Do it and get that kind of initial scope without the dimensions. Once that floor plan’s back, you’re able to run it again on the job, create a second one, and and make it more, more complete. Next, we’ll talk about photos, our core bread and butter of �Թϲ����� photos. Right, Leah? Oh, you’re muted, Leah. Alright. There we go. Okay. Yeah. Photos. It’s our bread and butter. Butter. Everybody knows if you didn’t document it, it didn’t happen. Photos are so important. And in �Թϲ�����, we give you the opportunity to capture as many photos as you need, including three sixty. So that visual documentation provides the justification of what’s been written and said about the job. We are not going to make assumptions, though, based on just the photos alone. So, again, I’m gonna continue to reiterate that providing your expert human commentary, your restorer expertise, what you see, feel, hear, smell on that job needs to go into that into into the job. So but photos are are critical to providing some of that that visual evidence and validation for what what is being written and said on that job. So definitely create those rooms in �Թϲ�����. By creating the rooms, that’s gonna help to keep the data organized and match what’s happening in the real world. We highly recommend integrating your Ricoh three sixty three sixty cameras with �Թϲ�����. It’s included in your subscription. You don’t have to pay any extra for it. So to cap, it’s a really fast way to capture an overview of each room. Then capture those detailed photos of specific damage provided. Show the equipment in place. Show the baseboard. Show any mold that you find behind the walls. All of those things are going to provide the validation to what you’ve already provided in the context. You can mark up your photos. So if you want to highlight a specific area, �Թϲ����� Scope is gonna look at the markup that you’ve done on that, and and and it’s gonna flag that, oh, there’s something extra important in this photo that I need to that I need to look at. So to provide even even greater amount of detail and context. Yeah. And if we look at, like, the the sample job that we’ve been walking through for this entire job, I’ll show it up on my phone here is so this is the primary bedroom, and we have photos throughout the job as well. So remember, you can run the scope as the job progresses. So do that initial scope on day one, understand what happened. As you can see here, we had photos of the meters as well as photos of the meters within Hydro. We have three sixty is a great way to show the overview of each of of each of those spaces. You can do that right here in �Թϲ�����. And one thing that I like about kind of using our app for photos is when I’m taking photos, we’ve tried to make it really easy for you to to not break what you’re doing. So within the camera, you can take photos of each of the rooms. You don’t actually need to leave the camera as you move the space. So if you wanna focus on, I need to take all the photos of the affected spaces. As you leave that primary bedroom and walk into the hallway, simply select the hallway. You can see it’s highlighted at the top. As you take photos now, it goes straight into that room. So you don’t even have to leave the camera to, you know, stop what you’re doing to take photos. And the same thing with three sixty. You can bring your Rico with you, put it in the middle of the room, capture that photo, go back to taking overview photos, damaged photos, and then move all that equipment to the next room without leaving the screen. You can just switch rooms. Again, we’ve just tried to make it really easy and efficient for your team to capture those that data and those photos for, for the job. Great. And last but not least, our Notes and Note templates. So we I talked about the the video walk through as sort of the gold standard for capturing that description of the loss, the providing that damage description. But Notes are another great way to do that as well as note templates. So giving those clear and consistent notes, whether that’s upfront at the beginning or daily sort of progress updates throughout throughout the job. You can provide extra room date details, so information about, you know, how the closets that were in there, windows, doors, safety hazards, things that help reinforce what you’ve provided in the video walk through. I’m not gonna go through all of these, but I wanna specifically hone in on the the note templates. So this is a feature that we introduced several years ago now, but it gives you this an ability to create sort of a standardized template for your team of things that you might want them to provide on every job. So maybe it’s a daily progress update. What did you do at the end of the day? And you provide specific list of things, and they they just need to fill in the blank. So Shaun’s gonna show you some of these things, but leveraging Notes, again, it’s gonna give us that opportunity to ingest that that really rich contextual information that you provided from your, you know, human in the loop expertise to generating a a more robust scope. Yeah. And I think the the power of Note templates, similar to the power of Scope, is providing consistency from every job and whoever is on that job. So, you know, here’s an example of kind of the general notes on that job where we have a note template for a daily checklist that needs to go through. So for somebody to use it, they can go into general notes or go into the specific room that they want. They can create a note, hit the template, and then they’ll pull from all the templates that you’ve set up in your job. We introduced rich text last year, you can create, checklist. If I look at kind of a completion checklist that who did that final walk through of the job, did they remove all the equipment, was the COC signed. Super easy for someone to know what they need to do on that final checklist. Or if they’re trying to, you know, start the job and do that initial investigation, we’ll just replace that, you can see here that we’ve added that information in here, and they can just, they know exactly what they need to fill out for that job description in addition to everything else we do. So it really just helps drive consistency and ease of use for your teams in the field. I think the last thing, Leah, that we wanna talk about is, is Hydro. Yeah. And, Shaun, I’m just looking at the time. We’ve only got twelve minutes left. So I think if we just I’ll give an overview of Hydro, maybe add some context, maybe you don’t show show the app. But Hydro data is is additional context that can be used by Scope to drive accuracy and validation. So if you are using Hydro, it’s the it’s the water mitigation tool, the checklist to documenting water water jobs, so psychrometrics material readings. We have an equipment calculator in there, gives you alerts and notifications. But Scope is gonna use this to validate the the other things that are seen in there. And, again, if you put measurements into Hydro, it’s gonna take those measurements in. If you put the source of loss into there, that’s that extra context that it’s gonna provide. I talked about that, like, wet carpet, dark carpet being wet versus dry. If if the if you didn’t mention it in your damage description and there’s only a picture of carpet, the visual analysis isn’t gonna know if that carpet is is wet or dry. But you may have entered a moisture point in Hydro that shows that the carpet is completely saturated. So it’s gonna give that extra level of detail and information in that room, in that drying chamber to validate where things are affected and what needs to be done. Anything else you wanna add there, Shaun? No. I think you’ve you’ve topped it. It’s just, again, it’s additional context to help create the most accurate scope that we can create based on the data on that job. Awesome. So that was a a quick overview. And, Shaun, I don’t know if you’ve seen it. We have, like, thirty five questions in the Q&A. So I’m trying I don’t wanna rush everything, everything, but I wanna be able to try and get some of these questions. I know we won’t be able to answer all of them, but there’s a bunch that I do wanna get to. But I just wanna wrap up and reiterate that �Թϲ����� is the best tool for restoration contractors to document in the field. What once was used to just justify and defend your scope of work is now actually being used through the incredible powers of AI and how we’ve implemented it within our platform and our architecture. It’s actually creating that scope of work for you. What we’re seeing with the people who have tested this in our alpha program and then as we head into beta cut dramatically cutting the amount of time that’s spent on these on admin tasks, specifically this sort of, like, forensic deep dive investigation into figuring out what happened on the job, writing scope notes, translating that into an estimate. What we’re seeing, people are saving anywhere from an hour to four hours per job and significantly reducing that cognitive load and that cognitive time that they are required to sort of write out scope notes. And and so it’s really taking them from being authors and authoring the scope and writing out those notes to just being an expert strategic reviewer. So from an author to an editor or a reviewer. What we’re also seeing is it’s capturing invisible revenue. So AI doesn’t get tired. That’s the beauty of it. It’s it doesn’t care that it’s got four hundred jobs on the go. It’s gonna do the things that you ask it to do. So it’s gonna be be able to identify line items and tasks, equipment or safety measures that might get missed, if people are overworked or tired or in a cat situation and just, you know, we’re we’re human, and we miss and we miss things. So it’s gonna provide that those missing line items and that invisible revenue. It’s gonna ensure what people are really seeing is it’s driving consistency. Scoping is not a a process that has a lot of consistency across the industry right now. What we’ve learned from from the market is scoping looks different across every business and even within a business. Somebody might write scope notes, in a note on their phone. Somebody might write it in an email. Somebody might not write it at all. They might just go from memory directly into an estimate, there isn’t consistency. And that results in inconsistencies in estimates as well. So what what the people who are testing this is this is providing consistency not only across jobs, within within jobs and within within their across their teams. So what from one PM to another PM, as as long as the data is there, the output is the same. And it’s giving us the ability to kick start estimating and estimates and work orders right from the get go, right from day one. So improving this the the turnaround times and improving your SLAs with whether it’s with a TPA or a carrier to get those estimates to to carriers faster with line items that are, you know, organized and and most importantly, justified by the scope of work backed by the IICRC. So speaking of feedback from people who have tried this and seen this, we’re just gonna play. It’s a one minute video with some feedback, initial reactions from from restorers. It helps us to explain the narrative, provide the information, and not have to spend four hours typing. We just read, edit, and sent so much quicker. It it came out pretty dang on the money, really. So it’s got attention to detail that I wouldn’t have even probably put in there. The two things that really stood out to me about the AI scope was it, quoting the S500, pulling those up because we’re independent restoration company, so we have to defend our estimates all the time. So inserting those into the scope really helps. I will say that I really like the idea of our project managers being more consistent because we are all over the place, not only with our scoping, with our pricing, and so on as well. You know, all details are so so amazing, very easy to understand, and I love it. Fantastic tool. I mean, this is crazy that that scope, was produced with the square footage of removals and recommendations and equipment and yeah. Good job. I think that this is a this is a piece that might really change the whole landscape for restoration people. Amazing. Shaun, thank you so much. Thank you to everyone who joined. I think we we had around four hundred people join today. So many questions. Probably should have booked this for longer. Shaun, any last words? I think we did it. Covered a lot. So thanks, everyone. Can’t wait for everyone to try it starting March eighteenth. We’re really excited. Alright. Thank you, everyone.

Welcome, everyone. My name’s Leah. I’m the director of product and content here at �Թϲ�����. I’m so grateful for you guys joining us today. Alright. So like I said, welcome to our first ever AI boot camp at �Թϲ�����. Like I said, we had over twelve hundred people sign up, so we’re so grateful that you took the time out of your day, your busy day, to join us for this three hour boot camp. Why we’re here? If you are anything like me, you’re probably feeling a a certain way about AI at this point in time. It’s very I find it very noisy. Every time I open up LinkedIn or open up an email, I have another I have somebody reaching out from an from a company offering this service, offering me new software. And just overwhelmed by the amount of new solutions, big promises, everything that’s out there to make my life easier. Or I’m I’m seeing big warnings about the dangers and the risks of AI and why I shouldn’t use them. So it’s all just it’s it’s a lot. And I joke about needing an AI solution to help me understand all the AI solutions that are out there to just help me cut through the noise. So that’s really why we put this webinar together today. It’s really a mini conference. You can see here we’ve got seven incredible speakers lined up for you today. They all come from different backgrounds, different experiences, but they all share the same passion for turning down the noise in AI when it comes to restoration. We’re gonna stick to facts. We’re gonna teach things that are really meaningful, give you some real tangible takeaways and learnings so that you aren’t as confused about AI as I am today. So, I’ll just switch slides here. Like I said, it’s a mini conference, seven sessions, with some really great speakers. My first guest is always on time, always a professional, and always ready to go. So I’m going to welcome Taylor Carmichael. It’s just well, she there she is. Welcome, Taylor. I will do a quick intro, and then I’m gonna throw things over to Taylor. So Taylor is the director of systems for Southeast Restoration. Many of you might recognize her face. She’s been on some �Թϲ����� webinars before. Southeast is a full service contractor specializing in insurance repair and restoration. Founded in nineteen ninety nine, Southeast has seven locations across Georgia, Alabama, South Carolina, and Tennessee. But specific to Taylor at Southeast, she leads the integration of technology and operations across the cleaning and restoration industry. She’s got a master of information systems and over a decade of industry experience. Taylor focuses on building practical, scalable systems that reduce friction, improve communication, and turn data into meaningful insights at South Beach. She is a frequent contributor contributing author with CNR Magazine, and she is a speaker at the upcoming RA convention. So Taylor is super passionate about helping restoration teams sharing her knowledge and helping them adopt technology in ways that strengthen day to day execution while laying the groundwork for long term business growth. Alright, Taylor. I’m gonna leave you. You got twenty minutes. Take it away. Alright. Hello, everyone. Thank you, Leah. And hello, �Թϲ����� community. Thank you for having me today to talk about a subject that I am passionate about. But before we talk about all things AI and AI doing some really impressive things, I do want to ground this conversation in a real moment from our organization at Southeast Restoration. And early on, we started experimenting with AI in preproduction in our sales department to help us move faster from summaries to scope narratives to better loss descriptions. And on paper, yes, it was a great use case. Where could we go wrong? But we learned very quickly was that AI didn’t fail because of the technology itself. It failed because our inputs into that AI, they were not consistently defined. Handoffs to other departments, they weren’t always clear. And ownership across next steps, it was not clearly defined. The AI output, it certainly sounded confident, but it wasn’t always accurate. And instead of saving time, our preproduction sales team had to stop and validate what the AI produced. And really, that’s worse than not using AI at all. And last year, that experience, it taught us something very important. AI does not create clarity. It exposes the lack of clarity. If the process isn’t defined, AI is going to make assumptions. If ownership isn’t clear, AI is going to fill that gap. And if the data isn’t trusted, AI is just going to amplify that problem but amplify it even faster. And that’s why we here at Southeast, we lead with this principle, clarity before capability. AI is not the starting point. It’s the reward for doing the foundational work first. And everything that we are going to talk about today, it is going to build from that specific lesson. Now next, I wanna start with this because it usually does get a laugh. But if you or a loved one has suffered organizational chaos from unmanaged AI, you may be entitled to financial compensation. And it sounds like one of those late night class action lawsuit commercials, but if you slow down to think about it long enough, there is real truth in that. What we’re seeing across the industry isn’t that AI doesn’t work. It’s AI without intention creates chaos. A lot of organizations, they just jump straight to the tools. They may automate the wrong workflows or layer AI on top of unclear processes or even expect technology to fix discipline issues and habits. And instead of removing friction, AI has a potential to create more of it. But the reality is, again, AI, it’s not the starting point. It’s the reward for doing the foundational work first. When the foundation is solid, AI can be incredibly powerful. And when it’s not, AI just makes the mess move a whole lot faster. And today, we’re not going to talk about which tools to buy. We are gonna talk about what that foundation actually looks like in restoration and how we can decide where AI truly belongs. When people say that AI fuels overwhelming and restoration, they’re not wrong. Our reality is that our work is unpredictable. It’s time sensitive. Every job is different, and decisions often have to be made before all of the information is available to us. At the same time, our data lives in too many different siloed systems. So when we talk about AI needing good data, leaders are already wondering, well, which data and from where? Our field teams are stretched thin. They’re asked to move fast, document thoroughly, and now learn new tools on top of that. If AI adds even one more step, it certainly can feel like a burden, not a benefit to them. And leaders are being asked to decide faster with less confidence using fragmented information. So when AI is introduced to an organization without that clarity, it does not feel like progress, but it feels more like noise that we it was talking about earlier. Now let’s talk about some common mistakes or assumptions. This is where most AI efforts go sideways. We automate broken handoffs instead of fixing them. So the same confusion just moves faster. We add AI on top of unclear processes expecting intelligence to compensate for a lack of definition. It can’t. We cannot well, we expect the technology to fix discipline issues. It can’t. We expect the technology to fix documentation gaps, inconsistent inputs, or missteps. That’s a leadership problem, not a software problem. We roll out tools without clear ownership, or maybe no one’s accountable for the output, the accuracy, or the outcomes. This is what happens when we skip the very important decision discipline. When any of these on your screen are true, AI doesn’t reduce friction. It’s only going to amplify it. And if you remember nothing else from today, I want you to remember this one slide. Before you apply AI anywhere in your organization, you have to slow down just long enough to ask these questions that you see on your screen. Is the process documented? If it only lives in someone’s head, AI will guess, and it is likely going to guess wrong. Is the ownership clear? If no one owns the input or the outcome, AI is not gonna fix that either. It is just going to make the ambiguity faster. Is the data trusted? Not perfect, but trusted because AI will confidently amplify whatever you give it, good or bad. Would I make a decision from this output? If the answer is no, you should not automate that. And finally, this is important. Would I defend this in a courtroom? In restoration, that question matters. If you wanna stand behind it with a carrier, an attorney, or a regulator, AI has no business touching it yet. If you can’t answer yes to these questions, the right decision isn’t better AI. The right decision is better clarity. And here’s what that looks like for us at Southeast Restoration. We certainly did not start with AI everywhere. We started with sales and documentation where friction and quality and consistency, it was already high. Was already elevated for us. One of the biggest wins last year was loss descriptions. AI helped us produce more complete, well structured documentation that answered adjuster questions before they were asked of us, that reduced unnecessary back and forth, and it helped claims get approved faster. We also saw stronger documentation overall from both carriers and customers and cleaner handoffs between departments. Scope voice dictation was another key improvement. Field teams could speak notes on-site and instantly convert them into structured documentation instead of spending hours typing a leader on into the evening. Because we were intentional about where we started and we had that foundation, AI improved clarity instead of adding noise. We focused on the problem first, not the tool. And we definitely did not get this right the first time. One of the biggest roadblocks was that temptation to chase shiny AI tools before we had fully closed our process gaps. The tools looked promising, but without a solid foundation, they created more questions than value. Governance and security also slowed us down. And in hindsight, that was not a bad thing. Those pauses forced us to be more intentional about where AI had access and how it was being used. But what I wish I had known earlier is that AI, again, is only as good as the foundation underneath it. Clean data, clear workflows, defined roles, those have to come first, and there’s not a shortcut around that. And, honestly, the hardest part wasn’t creating technology and artificial intelligence agents. It was the change management behind that. Helping our team to trust the output, adjust bad habits, and adopt new ways of working. That took more time and leadership than building the technology itself. If there’s one practical takeaway that I do want to leave you with today is this. Build something AI can actually help you with. Before you implement any AI solution at your organization, start by identifying where friction really exists. Where is time wasted? Where is information lost? Or teams forced to rework the same things over and over? Then document those processes clearly and consistently in a way that systems can understand, not just people. Clarity here is what makes automation possible. Organize your knowledge base so information is findable and accessible. If your team can’t find it, AI can’t find it either. And only after you’ve done that should you explore AI tools to enhance what you have already improved. When you do the work in this order, AI doesn’t feel overwhelming. It feels supportive. It reinforces good systems instead of exposing broken ones. And AI works best when it is invited into something that already makes sense. Thank you, guys. Thank you, Taylor. We had a couple of questions come through. Just a quick I’m just gonna reiterate quickly before I throw some questions over to you, Taylor. There’s some questions about getting the recording and copies and stuff. Yes. We will be sending a recording after this with you’ll get a link to a website that has all of this on demand. And there was a question about IICRC credits. You’ll get a link at the end as well that you can fill in a form, and we’ll get you those certificates. Okay. Taylor, I’ve got some questions specifically for you, now that we’ve got those ones out of the way. How how do you or your your business how do you know when you’re actually ready for AI? That is a fantastic question. We are ready for AI when we can clearly and confidently answer the question, is the process clear? Because if that process is not clear and defined, When we automate something last year, it was documentation, lost descriptions, scoping. And at the time, our process wasn’t clear. And AI, it guessed, and it guessed wrong several times until we realized that we had internal process gaps. We had internal documentation issues and bad habits that we had to clearly define at the leadership level. And once we did that, we realized that we were ready to tackle certain AI challenges. But, really, we had to slow down long enough and ask ourselves, what is the problem that we’re trying to solve? That’s the first thing. It can’t it cannot be everything. Everything cannot be the answer. And once we define specific friction points in our organization, is the process clear? Is there documentation? Would I trust the output? If you answer yes to those questions, then certainly give AI a try. That’s so just to paraphrase, it sounds like you’re saying that AI is not a is not magic. It’s not a magic silver bullet solution to all sorts of of of bad habits. Is that is that fair? That is absolutely fair. We get a lot of questions on is AI gonna replace our people? No. I’m a firm believer that it’s not. Even as a technologist and someone that is researching and deploying AI solutions at our organization, I’m a firm believer AI is not gonna take our jobs. Our people are our greatest asset. And artificial intelligence, if you think of it like this, our people, they are our thought leaders, and artificial intelligence is purely just your thought partner to come alongside of you. That’s great. You talked about how you, like, you’re a leader in your organization, and your your role is to bring these technologies and solutions to the table. How about in a smaller a smaller company, that doesn’t have, you know, seven locations across the southeast south u southern US? Where should a small company start? They’re probably feeling like me where it’s, like, bombarded with, like, this tool and this tool and this solution. So where do you think they should start? I I genuinely feel like you have to look at your your department. Okay? I’m sure you have market development, sales, emergency service, preproduction, accounts receivable. You need to be looking at those specific areas of your business and just defining your friction points. I know I keep saying the word friction over and over, but that’s just because I’m a firm believer. And once you look at your broken processes throughout the life cycle of a claim, that is when you can say, okay. I have a sales problem. I have a problem with getting claims approved. I have a problem with getting claims approved timely. Then start drilling into why is that. Is that an internal issue where we need to define what does the handoff look like? What does the documentation look like? Can our documentation be better? Maybe your documentation isn’t the best, and that’s why you are experiencing elongated claim cycle times. But I just encourage you, look at the areas of your organization and really start defining those friction points. At a recent leadership team meeting, I asked our general managers, what is one friction point at your location, and how could AI come alongside that? Because, yes, I know. I don’t necessarily live in the real world. I’m behind my computer, but you just need to ask the question, where can AI help you, general manager of sales? Where can AI help you, person responsible for finances, and just slow down long enough to find that friction and make sure that it’s well documented and that you have clear processes around it? Right. That was a question that just came in from Carlos. And, Taylor, you may not be able to answer this, but I can probably answer it a little bit too in the context of this overall session. But I’ll ask it to you first. When you’re talking about AI, are you mainly referring to generally the LLMs, like Clo, ChatGPT, or Gemini for, like, client emails, or are you talking about field specific AI systems as well? So I’ll let you answer that, and then I’ll give some additional context for what’s to come. Talking about both in a sense, but my brain is really more so focusing on artificial intelligence agents and creating those at your organization. When you have defined your documentation or your knowledge base, I’m sure you have SOPs, wouldn’t it be nice if a field team member could go to a chatbot, ask it a question, and it’s referencing your well documented SOPs or friction points that you’ve already defined. And you can build AI agents around that where it’s just referencing your organizational information. But as it relates to generative AI, yes, use use that to for adjuster communication to help you write emails better. If you’re just getting started, I I do think that that’s a great place to start. But with that, I would just encourage you to think about governance. Don’t copy and paste sensitive information and do free versions of any AI tool. You don’t want any of your data getting used to train the large language model, so that’s just something to pay attention to and be mindful of. That’s great. And, yeah, Carlos, really great question. And just as we go through the the rest of our speakers today, we’re going to reinforce this message that that AI does not just equal ChatuchPet or an LLM. There’s a whole there’s a there’s a whole lot of AI, branches of artificial intelligence, and and we’re gonna talk about each of those specifically. Some of our speakers are gonna give you tips and tools for how to interact with LLMs in a better way, how to do better prompting to get a better output, how to validate and test those prompts. So we’re gonna hear from people, who who have more have expertise in those specific areas, and we’re also gonna look at what Taylor talked about is how do you go from, like, a, interacting with a chat with, like, with ChatGPT, for example, to building an application or building something purpose built, whether that’s local to your business or whether that’s something at �Թϲ����� building a more enterprise grade AI solution, which leads into the next question, Taylor, which I think is for me. But I’m gonna throw it over to you after I answer the question because I know you have an answer. Will AI be implemented within the �Թϲ����� platform, and are there any future plans to program it within �Թϲ�����? Great question. Love to tell you about it. Yes. And you’re gonna hear from three of our AI experts from �Թϲ����� today. They’re not gonna be telling you about any specific product. They’re gonna be talking about how we’ve responsibly built AI into our platform and give you a bit of a sneak peek of sort of the things that were come that are coming from there. But, Taylor, we’re we’re almost at time, but I would love it if you could just talk because I know Southeast is testing testing one of our features for us right now. So if you wanted to just talk about how you’re piloting. Yeah. Absolutely. One, I’m I’m very thankful to even be a part of this conversation as a restorer that is utilizing or piloting rather the �Թϲ����� AI scoping tool for field dictation, structured narrative, documentation summaries, and that is helping our field team members do voice dictations as they navigate the property. What are they seeing that’s capturing their narrative? And then also looking at the documentation that they are entering into �Թϲ����� Hydro, and it’s producing documentation summaries at the end of that that has been incredibly impactful and beneficial and helping our team members just really be more effective and more efficient all at the same time. Amazing. We’ve got a couple more minutes. Jason asked and, Jason, I’m gonna throw this question to Taylor specifically for her perspective, but we are gonna get, more in-depth into prompting with Joe who’s coming up in a little bit. But Jason asked, do you have any good prompts for AI to help with mitigation and restoration? I I personally don’t prompt it in that way. However, we do have defined prompts that we have instructed our teams to utilize specifically for our five function departments, market development, sales, mitigation, and emergency services, etcetera. And what I encourage them to do if they’re unsure of the prompt, instead of, like, say this better, say this nicer, say this more firm, those are very just high level. I like to really encourage you to develop a persona. And what I mean by that is in your prompt, act as a proficient mitigation and emergency services professional that is triple IICRC certified and write this email, reply to this adjuster in this way. So it is already developing that persona for you of like, oh, okay, this is how I should respond utilizing this persona that I’m adopting essentially. So I encourage people that are new with AI and new with prompting is just to develop a persona. Who do you want to be today? That’s great. Thank you so much, Taylor. This was so helpful. I think my biggest takeaway is that you you need clarity before you can, before you can apply AI on top of that and get your get your ducks in a row, get your documentation in order, get your data organized. That’s gonna be the foundation because AI is not is not magic and is not going to, you know, magic wand you out of bad habits and bad processes. So thank you so much, and I’m sure we’ll talk soon. Thank you. Our next section is, with Nick Hindle. Nick is the chief information officer for PureClean. Welcome, Nick. Good to see you again. Pure Clean is celebrating its twenty fifth anniversary and just surpassed five hundred locations across the US and Canada. And I just saw today that they’ve been named the twenty twenty or a twenty twenty six top franchise by Franchise Business Review. And Nick is leading the IT or information and technology at Pureclean. He is an experienced technologist with degrees in computer engineering and postgraduate certifications in software engineering, computer architecture, and operating systems. In addition to that, Nick has fifteen years of experience over fifteen years of experience serving the technology needs of restorers. He’s held senior positions, not only at Puroclean, but, at Nexgear at �Թϲ�����, and now, of course, as the CIO of PureClean. So Nick is going to talk to us about evaluating AI vendors. So Taylor Taylor looked at how to make sure that you’re ready and what to get your your foundations your foundations right. And Nick is now gonna talk about how in his role at Hero Clean, he evaluates AI vendors and how to make the right decisions. Thank you, Lee, and good morning to everybody. I’ll actually just follow on with something that Taylor mentioned, and I think it’s really important. You must know what problem you’re trying to solve. If you don’t, you won’t ever realize that you got to the end. So and and I think think that was a very good point that she wanted to highlight. So let me just start off with this. There’ll be a hundred what ifs that you go through, And it’s very important that you don’t get overwhelmed by trying to solve everything in one pass. So I I often like to use these three items when I’m going through any evaluation, but just in in general also. So I always say, and I like to say, every decision has a half life. And that’s because as we make decisions, we make decisions based upon the information that we have, but we have to recognize that that decision only has a lifespan. And if we find more information that now negates that decision, we should change that decision. So what if I get more information when I’m evaluating a vendor? Take that information and make a better choice. Indecision is the worst decision. I’ve learned this many, many years ago from somebody who said, there are three decisions, good, bad, and indecision. And indecision is the worst decision that you can can have. As as a leader within PURACLEEN, I’m I’m surrounded by lots of people that are looking for direction, and creating indecision leaves people in an unknown state. So they don’t know which which software vendors they that they should be working with and if they’re the right software vendors. So sometimes we have to make decisions. And knowing that that decision may not be perfect, I’ll refer you back to the first item. Every decision has a hard one. And then the last one is don’t rush. When you’re talking to your AI vendors, they will want to close the deal. That’s their job. But your job is to make the best decision that you possibly can within a reasonable amount of time after knowing, going back to what Taylor said, what is the problem that you’re trying to solve? And once you have all of these things together, you can make a more informed decision. The important piece that you need to think about is where is your business? And a decision for for me and the one that I make on behalf of PURACLEEN may not be applicable to somebody like Taylor in in in her role, at Southeast or somebody else that’s a a local or somebody else that’s a larger organization. But what I would think about, I would think about these time frames. Twelve months out, you can generally predict, what directionality is going to be. Thirty six months out, you’re thinking about growth strategies and ensuring that your business is on the right trajectory. What kind of things do you need to pivot? And then if you’re thinking seventy two months out, it’s probably very, very difficult to predict where you’re going to be. So don’t pick a partner that is tying you in to a timeline that you don’t know what’s going to happen. Okay? It’s really important, this piece. Know where your business is at, know where you’re going, and know what is going to be necessary for you to be successful in each of those phases. So these are questions that you just will go through. Okay? Ai is a technology. Okay? AI is a is a segment of technology. And you’re going to ask these questions. What should I buy? Who am I gonna buy from? Why should I buy it? But the important questions are, will my life be easier? Will this help me grow? Is what is being told to me just, you know, just the sales pitch, or is this reality? Can you show me? When you make a decision to follow through on a software vendor, that vendor needs to be a partner to you. If they cannot be a partner to you, they’re probably not the right vendor to purchase from. Because you want to realize that when you have that relationship with the vendor, it’s not that they just got you to sign an agreement. You need to have a partner as you go through that twelve, three year, five year cycle, potentially. Okay? And the areas that you are probably focused around when it comes to a a restoration provider are these that are on the screen. I’ll go back to what Taylor said. Know your problem. Know where you want to attack it and incrementally. She actually said pick a department, and she’s a hundred percent right. Pick the area that you want to tackle first and be successful and incrementally propagate that success through the rest of the business. If you try to to do everything, you will absolutely fail. You cannot do it all, and that’s just not a good sensible decision. So, I’ll give you an example here at at, at PureCloud. We do evaluate all of our vendors. We use, some criteria around this. We have actually built essentially a vendor management program. We call it SPAR, standard partner approved and restricted, and these are the different categories that we place our vendors into. Whether you have one formalized or not, you probably will go through an evaluation process for your vendors. That is vendor management. You may have a platform that you do it with. You may do it on a piece of paper. You may sit around the table and say, what did you think? That’s a thumbs up. That’s a thumbs down. Let’s let’s go. But I would highly recommend that when you make a decision that you document it and you know what the reason is that you went forward with that partner. So, again, here at PureClean, we actually have a a very formalized process, and we evaluate people from everything from what are their support capabilities, what are their road maps looking like, what is their delivery, have we have we got not just testimonials, but we actually know people that have been using this product, can we pilot it. Taylor is actually in a pilot with the �Թϲ����� team around scoping, and it’s I I I’m actually incredibly aware of what that, functionality is, and I’m I’m quite excited. But when it comes time, I will probably pick up the phone and call Taylor and say, what did you think? Not, hey, Leah. Tell me what you think I should be reading. I’ll actually pick up the phone and go, hey. Do that. You’ve got peers in the network, and you’ve got experience that is out there, and you should take advantage of that. And you should always, always, always make sure it’s the right fit for you. It might be a great fit for Taylor, but it’s not a great fit for Nick. Every every every decision has that half point. Okay? But think about doing some actual vendor management and set the criteria, live by that criteria, and ensure that your vendors meet that criteria. One of our fundamentals, this is a nonnegotiable. Every vendor will be SOC two certified for us. If they aren’t, we say, you’ve got a fantastic problem solution to a problem that we have, but you aren’t certified. I’m sorry. We just cannot move move forward with that. We define those criteria and ensure that your vendors meet those criteria. Okay? So, lastly, everybody should be able to go away with something in my mind. So I I put these items or what we think about. I have a a wonderful team that helps ensure that we can be successful, But we do follow these very simple but very useful items as we do the evaluation. What problem does it solve? That’s the fundamental. If you don’t know what the problem is to solve, you cannot find the right partner to help get that solution. Technology is changing so rapidly. It’s wonderful. It’s actually wonderful to see. The problem there is this. If I sign on a five year deal with somebody, in one year’s time, am I already behind? And in five years’ time, am I five years behind? Don’t get tied into a lengthy agreement where you can see other opportunities run by you that you should be able to get access to. So don’t sign a five year agreement is is is the basic there. This also is we we often call this the hidden cost. When you take on a a new technology or you are transitioning out one technology to another, There’s a hidden cost, retraining, you know, the onboarding of that, getting everybody familiar with it, and ensuring that it’s actually gonna help you grow your business. A partner is very different to a vendor. A vendor sold you something and then said, you’re on your own. Good luck. A partner is somebody that will help you overcome the hurdles that you will absolutely experience in the first three, six, nine months of that of that rollout. So ensure you pick not just on the technology, but how that vendor will be a true partner to you in your business. And I I am not saying this, by the way. I am not saying change every twelve months, but you will know in twelve months if you’ve got the right partner, and the right partner will deliver year after year after year. So as I said earlier, ask others. Don’t just go for, for the testimonials, but actually pick up the phone. Go to I’m I’m actually at the convention, this week. I ask other people that are in in in the same space as us, what do you think of? And we we share that that that that experience with each other so that we can make better decisions. Hey. I was looking at this tech. What did you think? I thought it was good, but it didn’t help me solve this problem. And I I can go, I actually don’t have that problem. Maybe it’s a good fit for me. But speak to people, get their input, and make the best decision that you can. And finally, this is the last one, I think. Does this vendor support your growth? It might you you you may only be looking twelve months out, as I mentioned earlier, or thirty six or or even five years. But does this vendor support a three year growth for you? If they do, think about it in these terms. Are they a good partner, not just the vendor? Are they a true partner? Do they have a product road map that aligns with where you are going? How frequently do they hit the milestones for that road map? You will make a decision probably on a promise. Hey. We will deliver x in twelve months. Okay. I really need x, so I’m gonna sign the deal. What if they don’t? When they don’t, did they just negatively impact your three year growth plan? So go back and ask others. How often did they hit the metrics around their road map? How often did they, in quotes, pivot? I love the phrase pivot. Some ways, I think of it as, yeah, we didn’t deliver on time, so we’re going to come up with a different reason. Pivot. I know I’ve been there. I’ve said those words myself. But make sure that you’ve got a true partner, and that’s really the fundamental. And this is another phrase I like. I’m not sure who said it, but they said, any fool can make it sound complicated. If they cannot express to you in terms that you understand and can comprehend so that it fits into your business plan, probably is the wrong partner partner for you. So if it doesn’t make sense to you and you need more time, then wait. And if we go back to the three items right at the beginning, every decision is a half life. You can make a decision, but if you are willing to make a decision and know that you could get it wrong, but you’re ready to make a better, more informed one as you learn more, that’s good for you. That’s what you should do. But don’t be indecisive. Your team will not appreciate not knowing what the direction is and the time frame for it. And then the last one is don’t rush. If it doesn’t make sense to you and you need more time, then wait. Find a partner, not a vendor. Thanks, Leah. Thank you, Nick, and very much appreciate you taking the time out of out of your day. I know you’re, right in at the Verisk show right now, so excited to hear what you what you learn learn there. I do have a couple of questions for you. You talked about, a nonnegotiable at PureClean being SOC two compliance for a vendor. Can you can you explain what that means to the audience? Just Sure. And so SOC yeah. So so SOC two is essentially, a demonstration of a commitment to security. Basically, that’s it. SOC two is an AICPA compliance certification that demonstrates that you meet certain elements within your organization. This is important because the the the clients that we have, predominantly TPAs and insurance carriers, it’s a nonnegotiable for them. They require us. They require PureClean to be SOC two certified. We are. But there’s always that element, and the most fundamental one is around security. They will always ask this question. Is my data secure? That’s it. Is my data secure? That’s gonna be one of the fundamental questions. Now our franchisees are putting data into a partner’s platform. I am accountable for that platform. So if there’s a breach in that platform, I need to know, and I need to know that that partner will communicate. Things happen. They always do. But any platform should have a SOC two certification for us. It’s a nonnegotiable element, and it’s for that reason because our clients expect it from us. We expect it from our partners. And ultimately, policyholders’ personal data is held in those systems, and it needs to be secured. And, Nick, how does that, or have your requirements around the around SOC two or around your vendor selection, have they changed or shifted with with AI vendors and and AI solutions? So so the the fundamentals have not. We do take a look so the fundamentals have not because as those underlying technologies change, the requirements in SOC two in particular are changing to support that as well. So we get audited every year. Our partners get audited every year, and they get audited on different things. And there are five principles. I can’t remember them all. Perhaps I should. But the the important thing is, are you continuing to keep up with the changing pace of technology and also the changing pace of regulation? That that that’s really important as well. So that’s so it’s a it doesn’t change as a fundamental, but the granular elements within those components will have to adapt over time. One more question I have for you, Nick. You you at PureClean, you have a lot of relationships. I mean, you’re at the very store right now with TPAs and carriers. What’s the temperature like around between, you know, restoration shops and TPAs and carriers around the use of AI? Is everyone just is it everyone cool with it? Are there is are there any, you know, red flags or risks that carriers, TPAs, are are looking out for and maybe cautious or wary about the use of AI to for a restorer? I I think the majority are very excited by it and excited by the fact that it can bring a lot more efficiency. As Taylor was saying, you know, the collection of notes and, you know, having more comprehensive information collected in a more rapid cycle, I think that’s really good. I think areas of technology where where they are going to be very interested is is around scoping and estimating. Having the ability to get better quality estimates is really important to them, and it’s really important to them for this reason. The efficiency, of their claim cycle, their claims review, is increased. When that efficiency increases, their costs actually go down. And believe it or not, I think insurance carriers like to have money. So anything that helps them keep money in their pocket is a good thing, and anything that helps them increase value and reduce cost at the same time is also a good thing. So they’re actually very, very interested in certain areas, not just, you know, image recognition and stuff like that, but, you know, areas around estimating contents and so on so so that you can be far more efficient in in that collection of information. Okay. Great. We’ve come to the end of our time, Nick. So is there any any final words, anything you wanna make sure that people take away from your your conversation today? I I I think, as I say, be willing to make a decision and ensure that you get a partner, not just a vendor. Make sure that you know what you’re getting into. And as always, let I wanna thank Leah and the �Թϲ����� team. What a a tremendous team that they are. And if you have any questions, you can get those through Leah to me, and I’ll be happy to respond as well. Appreciate it. Thanks so much, Nick. And Thank you. We’ll talk soon. Next up, we’re gonna move we’re gonna move into some an �Թϲ����� more specific �Թϲ����� conversation with our with Ronuk. Ronuk, I don’t I I’m terrible. I have a I have a hard to pronounce last name, so I just never even try. Is it Raval or Raval? How do I say that? Raval, I think, is what I go with. Alright. Yeah. Alright. Well, just a quick intro of Ronuk. He is the chief technology officer and cofounder of �Թϲ�����. Ronuk has been programming and building for as long as he can remember. He’s a graduate of a very prestigious program, the computer science program at the University of Waterloo up in Canada. Immediately after graduation, Ronuk met Paul Donald, who’s the CEO of �Թϲ�����, and they founded �Թϲ����� in August of twenty twelve. So for nearly fourteen years, Veronica has been overseeing the architecture development and engineering of the �Թϲ����� app. Over that time, Veronica has seen the company grow from the three employees that were working in Paul’s garage to where we’re at now, which is over a hundred and twenty five employees. And from our early beginnings as a contents inventory tool to what �Թϲ����� is today, which is the industry’s most trusted application for field documentation. And now, Ronuk is is leading the team to build �Թϲ����� AI, and that’s gonna bring our team and our and our platform to the next level to transform it into greater workflows, greater efficiencies for the restoration industry. So Ronuk is going to take over, and he’s gonna talk to us about how to think. And I use the quote think because that’s part of Ronuk’s presentation, to think like AI. So I’ll pass it over to you, Ronuk. Cool. Thanks, Leah. Thanks for everyone for, you know, coming to this webinar and giving us this platform to try and do this with vendor neutral presentation and really try and spread, good information across our industry. So, yeah, I wanted to talk about think like AI. Really, my life has been AI for two two two and a half, maybe three years at this point, and I’ve been heavily immersed inside AI. And what I wanted to do was try really hard to build an intuition for how AI works and try and give you a working knowledge so that you can effectively use, deploy, debug AI, and then maybe even understand why or what kind of struggles you might run into scaling AI as as you scale your deployment across your organization. There’s a thing that Nick said in the previous presentation that I’m gonna harken back to. He said something along the lines of any fool can make things complicated. And if they can’t explain things to you in a way that you understand, then what do they know? I’m paraphrasing there. But, hopefully, by the end of this presentation, I won’t be the fool. I will be able to explain things in a way that you can understand. And so very quickly, we’re gonna cover analogies to describe the LLM behavior, how LLMs can actually generate a response, how errors creep in, and what you can specifically do about it. And the last thing to highlight on this slide is that picture there with the robot. The pictures here are gonna be very essential to my explanation, so pay attention to them. So, yeah, let’s jump right into it. So to start, my the presentation is titled Think Like AI, but that’s a lie. It uses the word AI there, but AI means a lot of things. Specifically, I wanna talk a lot about large language models, which are LLMs, which are the key innovation in this wave of AI. So someone had asked about what are the kinds of AI that we’re talking about, and then you mentioned ChatGPT and Gemini and Grok and Cloud. And those are examples of the sort of low level models that we’ve unlocked new capabilities in in this generation of AI. But and they’re driving a lot of innovations, and those are the large language models. There’s also applications, and we’ve talked about scoping, which is a thing that I’ve been very heavily in deeply involved with. But applications can use other kinds of AI, perhaps some older techniques, perhaps some techniques that are more reliable or more robust, things like classifiers or, yeah, all sorts of things. I’m not gonna get get into the technical nitty gritty here, but I wanna talk about the kinds of AIs that are currently dominating the new cycles, which is these large language models. So not not all AI. Let’s talk about LLMs a little bit more specifically. The title also lies because it talks about the word think. And one of the key takeaways I want people to have is that LLMs don’t think, at least not the way you do. We use words like think, reason, plan because they adequately communicate the idea or the approach the LLM is taking. So when something when when we say, oh, you know, the AI is breaking down the task into smaller subtasks and it’s making meaningful progress against those subtasks, we kind of liken that to reasoning because that’s how a human would reason through a complicated task. But that’s an analogy. And analogies are useful, but they have limitations. Right? Taylor, in her presentation earlier, one of the tactics she was mentioning was, like, give the AI a persona. You know? Tell it that, hey. You are somebody that has ten years of restoration experience, and that works. And we found that improves the quality of the AI response, but it’s absolutely not how you would talk to a human. Like, I’m often reminded of the the matrix scene where, like, he downloads all of the information and then comes out of it with I know Kung Fu. That’s that’s how the AI is working there, but it’s not how a human would be cast into that role, and they would absolutely say something like, no. I don’t have ten years of experience. You can’t just tell me I have ten years of experience. But AIs are shameless. They will absolutely take on that persona and off they go for better or for worse. So takeaway here is be careful when applying the analogy the other way. AIs we use the words think, reason, plan, but if you approach your model with the way humans think, reason, or plan and then try and use that to predict AI behavior, you’re gonna run into some issues. So be careful. Alright. But analogies are useful. They are a way to make technical content more approachable. So I’m gonna start with my own analogy, and I wanna talk about chat. Chat is the fundamental interaction paradigm that these large language models operate under. Essentially, they take the dialogue that has been presented so far. They see the very last thing that the user asked them to do, and then they generate a response, a completion of what the next sequence in that dialogue should be. And if you do that back and forth, you get a chat. And the analogy I wanna drive is that a chat response, any single chat response is kinda like asking the large language model to cross a river. And the picture here is the has the robot on one riverbank, and it needs to cross this river. And it can take some steps along the way. There are some stones there that to help it along. And it’s trying to get to this riverbank at the bottom there. And the LLM needs to choose a path and what steps it step on along the way to cross this river. So a chat is a river. If we go to the next slide, if a chat is a river, a a single step is a word. Technically, technical jargon would say it’s a token, but I’m gonna use a word here for simplicity. And every the every step that the AI takes, the large language model, it’s a permanent part of the output. That word is now part of the output. And most importantly, a large language model cannot step backwards, and you’re gonna see how that single insight explains a lot of the errors that creep in a little bit later in this presentation. So a chat is a river. A step is a word. The width is the complexity of the task. So a simple task is a small stream. LLM models might often be able to cross it in a single step. And there’s no harm if, you know, the LLM kinda stumbles a little bit or steps in the water. It can still make its way across the district. So simple tasks might be summarize this piece of text or tell me the sentiment of this piece of text. Is it positive or negative? Like, what does the user think? Those are simple tasks for LLMC states. Whereas complex tasks, we talked about scoping and estimating. That’s a complex task. It’s a raging torrent. And so an LLM might have to take many steps to cross that river or and if it goes down the wrong path, it it can may not be able to recover. So Chad is a river, steps are stones, and task complexity is the what whatchamacallit? I lost my train of thought. It’s the width. There we go. And then lastly, model quality is the stone size here. Better models have bigger stones. Bigger stones make it easier to cross wider rivers. So we’ve seen a the rate of model quality increase has been accelerating. It seems like every day we hear of a new model, and it’s really hard to keep track of the current state of things. There’s Gemini three, which used to be two point five. There’s Claude Opus four point six, which is somehow different than four point five. There’s who knows what. They’re coming out faster and faster, it seems like every week. But they are improving. And what was hard for a model a year ago might be easy for a model today, bigger stocks. Finally, the last thing in this analogy is good guidance is kinda like prompting. A good prompt nudges the LLM into picking a better goal, avoiding pitfalls by picking the going down wrong paths or thinking that, like, a stone that it thinks might look good in the moment and is worth stepping on is act you know, with the right prompt is actually not the path to go on. So in the picture here, you know, there’s some signposts that say, this stone’s wobbly and this stone’s slippery, and that’s the value of a good prompt. It reinforces what good steps look like so that you can ex get some predictability out of the large language model. Okay. That’s the analogy. Let’s talk a little bit about how things get wrong. And the word hallucinations gets thrown around a lot. And what in in reality, as the models are getting bigger, hallucinations are becoming less and less likely. There’s not so much that things hallucinate. There’s actually we’ll talk about the next slide called misalignment where things are starting to become a bigger problem. But to talk about this briefly, large language models are trained to take the next step even if they are at a dead end. And so because once they’ve taken a step, once they’ve put a word in the output, they have to They are trained and incentivized to generate the next word. They can’t go backwards. And so I have an example here of a sentence fragment, the first man to walk on the sun. And that let’s say that the LLM has already decided to take those steps to say walk on the sun even though it’s impossible to walk on the sun. It’s very hot. But the first completion that I got, and I had to go back to a model almost two years ago to go down this path to get a true hallucination, was where the model generated was Arthur Burns, a totally made up name, a totally made up person, and then concluded with in nineteen sixty nine, which is the moon landing. So it got it made up a person, which is a hallucination, and then it kinda tried to tie it into a real fact, but in a completely wrong way. So that’s a true hallucination. But as the models have gotten bigger and the other two examples are much more recent models, you can see that the second model tried to kind of walk backwards by putting out more words. It’s it’s backpedaling a little bit by saying, oh, actually, no one can walk on the sun. Forget I ever said that. And the the last example is is going in the in a direction of, oh, I’m just gonna make this sound like a joke. So, you know, they walked they did so at night. The sun wasn’t there. So be it. So that’s hallucinations. Let’s talk about misalignments. And so this really connects really well with something Taylor said in the AI readiness test. If where she said, if the process isn’t documented, then the AI will guess to fill in the gaps. And in this example, I’ve asked the AI to tell me a good story in one sentence, and the the AI spat out a story. I’m not gonna read it all you can, but I personally don’t think that this is a particularly good story. I don’t think it’s compelling. I don’t you know, it’s not what I look for in a story. And by virtue of me just, you know, relying on the LLM to know what I mean when I say tell me a good story, the LLM is gonna fall back to whatever good they were trained on. That’s not necessarily what you’re looking for in good. So by virtue of not having a process, by virtue of not knowing the persona you wanna give the AI and what you expect in the response with concrete examples, you’re relying on the training data and, you know, these off the shelf LLMs are trained on copious amounts of data to fill in the gaps, and those gaps might not be what you expect in the output. So that’s misalignment. And the last part of this presentation, what you can do about it. Specifically, you, the the individual that is interacting with this large language model. You might be trying to automate a part of your workflow, or you might be trying to come up with a prompt that you could share around with your organization to try and build a repeatable process or an automated process to to do things better. But and I will caution, though, that the you here is easier to do as an individual, and the amount of engineering and the amount of testing that you’ll have to do to try and scale it up, to try and navigate the rivers that have to be crossed over and over again consistently becomes harder and harder as you try to scale the use of any AI tool across an organization. So it’s really for the individual you, not the collective you. But what can you do? You can make better prompts. You can give better guidance. There are some best practices. I have listed some bullet points here of things you can Google to make better prompts. There’s a lot of guidance out there. But in summary, giving AI examples of dos and don’ts, good examples and bad examples of the kind of outputs you’re looking for is really effective. Giving the AI as a persona, as Taylor put it, what’s called mixture of experts, giving them a set of personalities to adopt when formulating the response works really well, and then putting ground truth in the prompt itself. So saying, here is the relevant sections of the IRC RCS five hundred that you should consider. Instead of relying on the AI to pull it out of its training data, putting it in the prompt itself is very, very effective. And then the last tip I’ll I’ll leave you with is try and reframe the task in ways that you would be that you know would be represented more in the training data. So these like I said, these AI models are trained on datasets essentially the size of the Internet. And across the Internet, if the standard unit of drywall sheets is four by eight sheets, try and ask your question or your prompt or, you know, align your prompt to what would be frequently show up in the training data. So don’t ask for it in square meters in this example. Alright. And then the last set of of things to talk about. As I said earlier, the complexity of the task is the size of the river. What you can do is you can try and break down the task into smaller sets. You can make it make make the task itself smaller, make the river smaller to increase the probability that the AI can cross it reliably and correctly. And so planning is the idea that you ask the AI to generate a plan first, which is instead of going off to generate the response, let’s just iterate on the plan where you can review it, and you can make adjustments to the plan before it goes off and starts to do the thing. This is also the where a human in the loop comes in, which is something that we’ve spoken a lot about and is a consistent theme that you if you come to �Թϲ����� webinars, you will hear a human in the loop a lot. And reasoning, aka thinking, is something that is built into newer models where they they as part of generating the response, they will have an implicit step where they do subtasks. And, usually, there’s a little drop down where you can, you know, unfold it and see what intermediate steps it’s taking. It’s internally deciding how to break up the river into smaller rivers to cross, and you can kinda see how it’s coming crossing those smaller rivers to come up with the final response. Okay. I think that’s all the slides. Let’s just do a quick recap. Okay. So in recap, analogies aren’t perfect, but they are useful to build an intuition. LLMs generate responses word by word. They can’t go back, but they do have an overall goal in the response. They are taking into account what you’ve said so far, and then they are getting to a point. Hallucinations and misalignments are more likely. They the more complex the task gets, the more likely they become, the more divergent the response will be, especially at scale. So even if you get it working for a small set of examples, if you try and deploy it at your organization in uncontrolled environments, you have to really be concerned about that. And then finally, we covered some tactical approaches to get the most out of your usage of Ella. That’s all for me. Thank you so much, Veronica. There’s a couple of questions, that have come in. Carlos, I’m gonna ask that one first. When using LLMs, is it better to create an agent and feed it IICRC training data and then use that agent for a while to continuously answer questions until the next big update or version or to use specific paragraphs? I think probably prompts and use it in a single chat interaction with the LLM. Depends on the use case. I would say that the big difference between a sort of what I what I consider agent and workflow is who’s driving the conversation. If if you’re in a workflow setting, it’s you, the human, that is driving the conversation to a specific goal. Whereas in an agentic setting, the agent is sort of taking over and it’s deciding what to ask you next. It’s pulling data out of yourself, but also various tools that it may have access to. So it’s like the the first level of answering this is the is the like, who who has control here? Second to that, the I would say that, like, grounding the LLM in with whatever, you know, standards or other things, whether that be SOPs or, you know, rules that you follow in your organization or just things that are unique to your context. The more you can put that in front and center, the more effective the response will be. Great. Right, as as CTO at �Թϲ�����, I think you’re the most qualified person to answer this question. And I think it’s called I’m gonna say it’s complicated, but I’ll let you answer it. Has �Թϲ����� selected an AI platform to work with, or are we, and I, we, the restorer, expected to choose one ourselves? No. We would not expect our restorers to bring their own AI to it. I think the magic of �Թϲ����� is focusing really deep on what the people in the field need, and then knowing that restoration contractors are there for a job to do, which is not wrangling with technology. And so I think that, I like, I’ve been there since day one. Things like offline mode, which were unheard of, when we built it, are part of our DNA because we recognize that fieldwork is messy, and we can’t make our users jump through hoops, because of technical constraints. So having them try to bring their own AI, I would certainly be opposed to. I think we would rather engineer do the hard engineering work ourselves, and then package that up in a way that’s easy to consume. And I think I think you’ve answered that there is that �Թϲ����� isn’t choosing a specific AI LLM to work with. We are we have built what we’re calling �Թϲ����� AI, which is a fully engineered system of a bunch of different AI tools that we can reach to to solve problems and and provide applications. Is that fair? And and that’s and that is touching upon one of my first slides, which is that, like, we will use the best tools to solve the specific problems that that that that we have. And sometimes that means working with a vendor. Sometimes that means going in there alone. Sometimes that means combining two approaches and making a hybrid. I will say that and Diana is gonna talk a lot more about this, but we do have we do understand that we work in a very regulated industry. Confidentiality and privacy are, you know, top of mind for everyone. We are SOC two certified, and all of that. So even the vendors that we choose, will have to go through a rigorous selection process. K. I think I have time for one more question. Zach asked, if he has or if his business has very clear SOPs or processes, what are some practical ways that he can insert AI into that workflow to automate a process? Oh, depends on the the specifics, really. The there’s there’s so much there’s so much noise in in terms of, like, what people will tell you all sorts of ways that it could work. Like, there’s low code builders these days that you can kind of try and talk your way through a problem. There’s the models keep getting better and, like, things like and the model companies keep trying to come up with new ways to integrate themselves with their workflow, most recently with Claude Cowork comes to mind. So it’s very dependent on the exact process itself. Oftentimes, the challenge becomes not that the AI can’t do it, but how to connect the AI to the relevant systems in a way that’s secure and not patched together. And that’s also very important. So, yeah, I have nothing like, this would be a a conversation over a beer or something and not I think not a webinar. Zach, I think I can give one example that specifically that Taylor mentioned at the the beginning was what Southeast Restoration is doing. They looked at a very specific problem, which was doing a a a summary of a of a walk through. So doing a damage description and dictating that into their phone and then injecting AI into that to create a summary. So a very specific problem with a very injecting AI into that very specific workflow to create an output that saves that saves them time. And, coincidentally, that’s that’s a tool that we happen to be about to release in the �Թϲ����� platform, whereas you can summarize summarize videos to to really reduce that time, things like scoping and estimating as well. Ron, this was amazing. I feel like there’s a lot of people on here who would love to have a beer with you and and pick your brain about about AI and LLMs. So thank you for sharing your expertise. Laura, you asked a question about hands on training. We can get we could definitely get back to you about specific �Թϲ����� training and how to use �Թϲ�����. We have lots of we have our customer success managers. We have weekly live training sessions. We have our learning hub where you can learn asynchronously. So we have lots of ways to get you trained, so we’ll we’ll reach out, Laura. Alright, Ronuk. Thank you very much, and I’m sure I’ll talk to you tomorrow. Yeah. Thank you. Great job. Alright. Next, I’m going to bring in Joe Ledbetter. He is a restoration consultant and AI architect. He’s also a thirty year restoration veteran and a self taught agentic engineer. Agentic engineer, those are not words that I knew went together until the last twelve months, but here we are. So for the last year, Joe has been working alongside Ronuk and our entire development team at �Թϲ�����, creating and building �Թϲ����� AI, a fully engineered enterprise grade engine that’s gonna power some of our truly game changing features and applications, over the next months and years. So after a year of hard work, we are at the precipice of seeing some of the first applications to emerge from �Թϲ�����, including automated mitigation scoping, instant item descriptions, video summarization that I just mentioned. So these are tools that will save restorers hours of time without disrupting how they work in the field. And when I think of the Venn diagram between somebody who is really passionate about restoration, and somebody who’s equally or really passionate about AI and technology, Joe Joe’s Venn diagram is a circle. They are overlapping. Joe is so passionate about restoration and bringing AI solutions into restoration workflows. And he’s going to, share the restorer’s guide to AI and share some lessons from thirty years in the trenches. So, Joe, I’m gonna hand it over to you. You are muted, Joe. We’ve got an audio issue. Say it again. Go ahead. All set. There we go. Thanks again. Welcome, everybody. As Leah said, thirty year plus veteran in restoration. Right? So I know the pains that all of you deal with intimately. They’ve kept me sleepless at nights most like much of you. And I did that for, you know, my basically, my entire life up until AI started to become commercially available. And I had played with machine language and some other, you know, automations prior. But, you know, around twenty one, twenty twenty one, twenty twenty two, all of sudden, we had got commercial viable, like, LLMs. And I was like, wow. These things are really cool. Man, I wonder if they can help solve these problems that we have as restores. And it then led me on in a massive journey to where we are today. Right? And I started off as a hobbyist, and and now I’m responsible one of the key people responsible for developing our AI tools here at �Թϲ�����. But, man, I learned a lot of things on the way, and they were really painful. And as a restorer, I know that all of you are going to AI tools, and you’re, like, trying to solve these problems. I know you are. That’s what I did. And most of you, if you already haven’t, are gonna find some of the same failures that I’ve that I found, that I struggled with, that I dealt with, that led me in difficult places that didn’t actually create a solution. They created more problems. Right? And so it brings us to the point now of twenty twenty six where, as Leah mentioned, I’m a self taught agentic engineer. No formal education. But I took the problems that we had as restore so seriously, and I wanted to solve those problems. And the AI gave me the capabilities to start to solve those problems. Funny thing, though, and just, again, just not being a technologist, I had no foundational understanding of anything that Ronuk had spoke about in his prior conversation. And I was just trying to cross the river, as you can imagine, with a prompt. Right? So here I’m trying to solve this big complex thing. Like, how do we develop a scope? And I was trying to do it with a prompt. And, like, just so you know, like, that doesn’t work, like, at all. So I’ll save you all the hours and hours of trouble. Like, you’re not gonna build a scope with a prompt. It’s not possible. It’s not even, like, obtainable even by the best technologist. Right? However, there’s a whole lot of great things you can do with prompting very specifically. And so but here’s, like, the big things that I was, like, failing at. Right? First and foremost is leakage of data. When you’re using, like, the free tools and even sometimes paid tools, but when you’re using the free tools, like, you’re exposing your customer’s information if you start uploading things like estimates. If you start uploading your SOPs, well, guess what? I hate to say it, but they’re no longer your SOPs. Like, now that ChatGPT has your SOP in it, every restorer, anybody who goes to search anything or get an answer about anything restoration, your SOP start to become present. And here’s how I know that. I was trying to do a simple task where I wanted to compare two estimates. Right? No big deal. I put them into chat GPT, and outcomes is what, at the time, was a great, you know, output. It wasn’t for about a year later while I’m doing other research. That file showed back up in an output of a nonrelated search. That scared the crap out of me because it was, like, instantaneously realizing, woah. Woah. This isn’t, like, anything we’ve ever used. You can’t just put stuff in there. Another another main issue was that, like, when we get into prompting, we’re gonna talk about it in a in a minute, is you start to build these things called guardrails. And when you build so many guardrails on your prompt, meaning levels of instruction, you actually end up making a box. Like, you you end up you don’t know it because you’re restorers. Like, you’re not a technologist. So you don’t really realize what you’re doing, but you make this box for the AI to work within because you’ve given it all these parameters. But now the AI can’t actually do what it’s intended to do, And your output now will often be a failed output. It may look and read and appear correctly and seem logical, but it’s actually not the actual answer. And that’s a that’s a big, big problem that, again, as a restore, you wouldn’t even understand that you’ve just put all these instructions in place. You think you’re getting better answers, and you’re actually getting farther and farther and farther from the truth. That’s a really big issue, a really big mistake that I made myself equally. So, again, when we get into prompting, we’re gonna talk about it, but don’t use too many guardrails and instructions because it’ll actually work against you. The other thing that’s really scary is and, like, listen. I’ll just be honest. Right? Like, I’m a horrible speller. You know what that means? That means I don’t write that well. Like, I’m not a good writer. So if I read something that is well written, it carries, like, a level of authority in my brain. Like, oh, well, that’s this is clearly written by somebody intelligent or something intelligent. And that builds a blind trust when you’re using large language models because large language models write better than all of us. Like, no competition. And so when you start to ask it things, the responses seem really good, amazingly impressive, and you’re like, dude, if we don’t get on this AI train, like, we’re gonna be left behind. Like, that’s a sentiment that it leaves for all of us. Right? But the problem is is most of us as restorers are not good writers. And so it was really easy for the LLM to fool us all and say, hey. Look at how well written this thing is. It’s this blind trust of assuming that the good writing equals correct facts, and that is the farthest from the truth. The other attribute and failure that I had was the DIY tech. Right? You I appreciate more than anyone else all the restorers who are trying to use AI right now, and they’re trying to do it themselves. Right? That was me five years ago. I completely understand that. However however, building it yourself, here’s the things that you don’t know that you don’t know. You don’t have a foundation in technology. You actually don’t understand how the LLM operates. And more importantly, like, you’re missing a whole lot of education to actually build the thing that you’re looking at and something that Nick had referenced. Most restorers, when they go to do this, they don’t really understand how to explain or that they’ve even identified the problem itself that they’re trying to solve. And so when you don’t know the problem so definitively, when you start to build anything, not only are you a lacking a foundation in technology, but you’re lacking the foundation of the actual problem. And you may say, well, but this is the problem that I deal with. Sure. You may internally understand the problem, but did you are you able to communicate that in building technology? Right? These are the main mistakes that I kept making, not being a technologist, but being a restorer. These are the same failures that you are also going to be dealt with. And I just wanna highlight the data leakage thing for a brief minute. Don’t be the restorer who ends up in court in a year from now because you put missus Wethead’s contents, information, and file into an open LLM. I hate to say it, but one of you is going to be that victim. So please don’t. Like, just don’t put data that’s not yours into an LLM that you don’t have control over. Please don’t. With that being said, prompting. Right? Let’s talk about prompting. Well, prompting, truthfully, was twenty twenty four. What I mean by that is the LLM models are advancing at such a great rate that I would be failing you if I if I sat here and said, hey. Here’s how we build great prompts, guys. And you have to have a role and a definition, and explanation and what you expect is the output, and you have to you no. That’s an entire class and skill set that as a restorer, I don’t encourage that you go develop and understand. The LLMs have advanced so far enough today that the best way to build a truly is to ask the LLM to build you the prompt. Like, don’t don’t try to become a prompt engineer. But here’s the secret sauce. When you’re asking the LLM to build you the prompt, I don’t want you to type. I do not want you to type. I want you to use your voice and talk to the prompt. Talk to what you want built. And the the importance of that is context. And context has far greater value than any sort of prompt engineering you might be able to come up with on your own. See, it’s the context that gives more depth to the problem and solution you’re trying to solve and create. And so how do you build a better prompt? You ask AI to build the prompt. You give it some basic information. Here’s what I’d like the output to look like. Here’s the challenges that I’m focused with. And then give a verbal dump of information. And don’t hold back, and don’t be afraid to be like, oh, I said this out of space, and I said this before that. AI doesn’t care. But the context we get from a voice is far greater than anything you could possibly think you can tell. With that being said, this methodology allows you to be the editor and not the author. So instead of you trying to figure out what the right prompt is to do, instead, you just get to look at the output that it gives you and says, I like this output. I think this is a really good prompt. Right? And then iterate. And then here’s the other here’s a really good tip. When you wanna increase the output to make the output better of any prompt or use of AI, I’m not telling you to threaten the AI, but, like, here’s the here’s, like, a good thing to say in your conversation with an LLM. Hey. I need you to do a better job at what you’re doing, or I’m just gonna go use chat GPT. Or if I’m using Gemini, right, like, I’m gonna position it against another LLM. Now I know on the surface that sounds like really infantile and silly and whatnot, but it’s not. And let me explain why. All LLMs, all of them were trained on human created information. So everything that lived on the Internet, everything that’s in books, everything that’s in music up until a few years ago was created by humans. And you know what comes out of all of that content? The human psychology. And what do humans have? They have a thing called fear. Now I’m not saying that the LLMs have an emotion or feel fear. What I am telling you, though, is that when you bring up that I’m gonna go use this you’re basically using psychological warfare on the LLM, and it understands it. And the output is actually greater. I would encourage that you try that as that respects goes. But more importantly, when you’re working with prompts and you’re building this stuff, do not use the free versions. Please only use paid versions. That’s a good way to protect your data, protect your SOPs, protect your profit processes. Right? And that’s there there’s just a a a simplicity of using the paid version. It’s worth it. Right? The challenge is is how scalable does any of this even become. So, like, someone in your operation could write a really great prompt based on the instructions we just talked about. But is that even scalable? Are you gonna do? Share the prompts across all your technicians? You can’t get your technicians to take pictures. You think they’re gonna store prompts and know when to use them? Probably not. Prompts just don’t scale. They work for a one off task for an individual. Right? But, again, this depends highly on the user skill, an individual prompt, versus a business application that upskills your entire team. A one off prompt has a high risk of hallucinations, like, as Ronuk mentioned. And the worst part about these hallucinations, Ronuk’s examples were very oh, obviously, nobody nobody’s walked down the sun. Right? Like, that’s like, we all kind of understand that. Here’s the hallucination that none of you are gonna understand. When it starts speaking policy language somehow, someway in your assessment that you wanted it to write or in the email that you wanted it to write, and you read it and you’re like, oh, yeah. That’s good. No. It’s not. It’s total garbage. It’s total garbage. It had no reference for it. That’s where you have issues. Unlike an application layer for a business where the validated becomes repeatable and you get good results. A prompt can’t scale, but a process can scale. Right? The other thing that it’s individual prompting is good for is creative writing. Right? It it’s good at creative writing, but don’t be the restore who goes and use ChatGPT to write this email response to the adjuster, attach your file, and then send it off. Wonder why? Because that response that you had ChatGPT write reads as a very professional document unlike the unsupported file that you just sent to the carrier that’s missing pictures, missing two days of readings, missing context. The adjusters will see that, and they’re not dumb. They’re gonna say, oh, what’s the they’re gonna be all interested in your narrative because it was well written. And then they’re gonna go crack open your file and be like, what? This doesn’t match. Like, and then now your file just goes away. It just gets set to the side. Be very careful at how you’re using AI. Right? Because it can be a benefit to an individual. It’s almost impossible to scale those benefits across the workforce unless there’s purpose built architecture. Right? That is the key to repeatable, successful execution of an LLM. There’s an architecture involved. And for all the restores listening out there, we’re not talking about the architect that builds the home. We’re talking about technological architecture. Right? And so the techno technology architecture that has to take place is something far above any restores often understanding. But that’s what’s required to make something work in your enterprise for everybody. It’s very unique and different from a single stand alone prompt. That’s why prompts can be helpful at solving a problem. But let’s look at the problem of scoping. It’s a thousand problems you have to solve, so a prompt’s not getting you a scope. I wanna iterate that again because I know so many of you are out there saying, hey. Write me the scope, and you’re trying so hard, and you’re getting fifty percent hallucination, and you just don’t really realize it. In order to get complicated things done with AI, there must be an architecture in which the operation runs through. Big takeaways at the end of the day, LLM is a writer, not a restorer. You are the professional. You are the ground truth. Ground truth is something we speak about in technology as as a foundational truth. Right? And so you, the restorer, are in the field. You know what is real, what is not. AI does not know what is real and what is not. It can write good, but it it’s again, like Ronik points out, it doesn’t think and it doesn’t reason for the most part as you would understand. Right? The liability is real. Using AI actually increases your liability. Why? Because you are into restore already have an enormous amount of liability. Every time your technicians leave the building, it starts from when they leave the building till they get back. They endanger the entire company with liability nonstop. Right? Like, raise your hand if you had a technician get into an accident with a company vehicle. Raise your hand if you had a technician talk about mold to a customer and there was no mold, or maybe there was mold, but you didn’t really wanna talk about it. Like, we are exposed to liable situations nonstop. If you think that using AI is gonna help you, I caution you to say, hey. It’s totally gonna create more liability if in fact you don’t have somebody like a tailor at least understanding the technology within your business. So that raises, another question. By a show of hands, how many are ready to hire another employee just to maintain technology? Yeah. Probably not. Right? So, again, really need to think through your use of AI. And then the last thing that I wanna bring up and and, again, this contradicting to myself, but it’s all this build versus buy. Taylor’s company has spent an enormous amount of money to have somebody as smart as she is to help create clarity in their technology and their company. Right? Purple Clean has a CIO dedicated to the technology for their company. Right? They these are big organizations investing lot of money to do the things the right way. Okay? But for the majority of restores out there, that’s not us. We’re not the big, you know, hundred million dollar companies. Right? We’re all doing a couple of million. Right? That’s the average restore at best. I would encourage the average restorer to be a restorer and not a technologist. Like, you hire subcontractors for a reason. If you wanted to build a true solution, right, the true solution is gonna be hundreds of thousands of man hours to actually build. It’s like the equivalent of the DIY method for homeowners. By a show of hands, how many restorers tell their customers they could do it themselves? Right. None of you do. Like, that’s not a thing. Why? Because we take pride in the fact that what we do is complicated and difficult, and it is. Like, a homeowner doing this themselves is probably not the best idea for the average homeowner. This applies directly to technology as a restoration contractor. You’re a restoration contractor. You shouldn’t be seeking out, you know, how to build technology. Right? And and I think that’s important to understand. And I’m not discouraging any of you from experimenting or trying to use AI. In fact, I want you to all go and use it as much as you possibly can, but I want you to be cautioned. I want you to be extremely cautioned and understand that the outputs may not be right and often won’t, and that it’s gonna be difficult to scale and and and caution you on how much time you’re about to go spend behind just getting people to use AI because it can actually hurt you more than it will help you. Thank you so much, Joe. I think I I’m gonna reiterate what I said at the beginning about the Venn diagram between somebody who’s passionate about restoration and and passionate about AI, and Joe is they overlap because Joe Joe’s Venn diagram is a is a circle. And I think, Joe, I think you’ve touched on some nerves because we’ve got a whole bunch of questions, but, unfortunately, we don’t have time to answer them all. So one of them that has come up a few times is your golden rule about not putting a customer data into a free version. What can you expand on that is the so the question is subscribing to the ChatGPT business plan the same as what you were talking about that’s safer and better overall and reducing liability? Like, how do you keep your data private in an LLM like ChatGPT? Yeah. So having the paid version of any of the LLMs is ultimately the good solution a simple solution to protecting your data and your customer’s data. However, I would still encourage you not to put customer’s personal information out there in any way, shape, or form. And here’s why. All it takes and this is this is how l l LLMs work, by the way. All it takes is for your one customer who’s quite savvy, who goes to chat GPT in the middle of her claim and starts asking questions. Did my restoration guys do it right? Here’s some pictures of their equipment. Here’s this. Here’s that. It knows who the person is. Like, it knows that it’s Judy Smith. And if you put Judy Smith’s information into the AI, when Judy Smith goes and starts searching and doing her own due diligence on her own claim, her information is gonna show back up in her face, and that’s the explosion of danger. Like, you you you really run a big risk of these things surfacing back up. I I actually and I and I’m not a technologist, so I’m probably not the right person to say, you know, like, where the data safety actually lives. But I can tell you that using an LLM, even in the paid version, you’re running a risk of personal information exposure, and and there’s actual, like, legality about that. Right? And there there’s legal framework. I I wouldn’t suggest that you do that at all at all. And then and then so you understand in our position at �Թϲ�����, we take that so so seriously that we purposely exclude all private information, names, addresses, phones, etcetera, from ever being input into any of our AI solutions. We actually intensively remove all of that stuff before it goes into process with the LLM, And we have very secure LLMs that are not available to the public, that are not being dumped into large language models. Like, even though we know our data is secure, we still remove it prior to moving it forward. I have time for one more question. I’m actually over time, but I’m gonna ask this one. For some of us that aren’t super AI savvy or have only used prompts used prompt chats with, say, ChatGPT, can you explain the difference between that and an agent? And how does one go about setting up an agent? Yeah. I mean, that’s a great question. Unfortunately, there’s just not enough time to really dig in and give you a a good answer. The short is, using ChatGPT is a chat, so it’s a one way thing. I’m gonna ask the query or ask it to do a test, and it’s I’m gonna send it off, and it’s gonna come back. An agent is far more autonomous. Basically, you establish the level of agent and its instructions. So think of making a prompt on how your agent is to act, and then your agent just does. And and some of the most advanced agents today, they actually do so much more without you asking for it. Right? They’re automatically programmatically doing things. And so, again and there’s all different types of agents that you can make and whatnot. I as a as a restore, I would say just stick with your chat GPTs or your Geminis of the world using a one shot opportunity with them. Building agents could actually expose your technology systems to a lot more risk. And right now, there’s just not good safety guardrails around an agent you going over your data in your system. You you run a big risk of exposure there. K. Thank you, Joe. I hate to to kick you off, but the music is playing on the stage after you’ve accepted your award, and I’m gonna have to yank you off because Diana is waiting in the wings. And Diana’s gonna take things take over from Joe and talk about you’ve you’ve got this you’ve created a great prompt. You’ve got this a great solution. How can you test and validate and evaluate that solution to make sure that it is that is good. And we talk we’ve talked a lot about what does good look like, so Diana’s gonna talk about how we validate that. Before before she takes over, I will just do a quick intro of Diana. She is our senior platform product manager here at �Թϲ�����. She joined �Թϲ����� last year as our senior product manager on our platform team. She’s been in tech for eight years, six years in product management. Her experience is in building platforms for automating workflows across different industries like banking, insurance, and media. She is excited about AI driven productivity, but, passionate and committed to responsible deployment of AI and safety first evaluations of technology. So it’s a good balance of enthusiasm and excitement about the possibilities of technology technology, but grounded in, safe deployment and making sure that these are, tools that work for for our customers. So I will pass it over to you, Diana. Thanks, Leah. It’s really great to be here with all of you. I’ve been working really closely with our AI services team with Ronuk and Joe and our product managers the past few months, just spending a lot of time thinking about how to make �Թϲ����� AI reliable and consistent for you all to use. So that’s very top of mind for me. So, before I dive in, let me just clarify kinda what the session is about. We’re talking about validating prompts. So we’re not talking about the one off, you know, chats that you’re having with ChatGPT or Claude, whatever system you’re using, or you’re looking for help on something specific. So we’re talking about when you want to build something reusable. So you are working with a prompt and you wanna reuse it for your own work or for some internal team process or maybe generating documents. Anything where consistency and reliability really matters. I’m gonna leave AgenTex solutions out of this. That’s a whole other beast for from a validation evaluation perspective, but we can get into it. So on screen, you can see we can have a scenario to consider. You’ve just spent an hour crafting the perfect prompt for writing an assessment report. You’ve tested it on a bunch of stuff, and it’s spitting out something really professional and very thorough. The question here is, is it ready to use on all client work tomorrow? So the reality before we jump from there, the reality is, like, most people are gonna say yes. You know? There’s always an excitement and momentum that comes with working with AI because you’re like you’re you can very quickly build a solution, and we all wanna just put it immediately into work and because it’ll save us a bunch of time, and it’s just really exciting. But the smart thing here, it really is to say, not quite yet, especially if you’re using on client work, and to do a little bit of extra validation. So we’ll talk about why testing a few times isn’t quite enough. So next slide. So a problem we all have when it comes to testing our prompts is that we unconsciously pick out happy path scenarios. So this means we’re probably grabbing jobs or data points that are very complete, very straightforward scenarios, what I call clean examples. So if we look at that assessment report scenario, you’re maybe putting inputting data that’s you’ve got all the notes, all the documentation, everything is at hand on hand. It’s a straightforward scenario where it’s just purely water damage, nothing else, and the job went exactly as planned. So the data that you’re providing using as a part of your prompt is gonna be very clean. The issue with this is that we’re teaching our prompt to only handle easy cases. But in the real world, that’s not how things usually go. So what’s the reality look like? The business reality here, go to the next slide, is that there’s likely missing details. So maybe the team hasn’t inputted all their notes yet, and there’s still rooms that are being assessed. And then on top of that, there might be some urgent deadlines that you’re working against, but then, you know, the conditions on the job are still changing, or there are just some really complex requirements where it’s not just water damage. You found mold or there’s some structural issues that you’ve identified. So the gap here is that your prompt was trained on the perfect scenarios, and it might not know how to handle anything that varies too much from it. So the next slide here is, you know, this is a fundamental issue that we need to solve for. Like, just because something worked once or twice or three times, does that mean it’s ready to be used professionally on a daily basis? So how do we bridge the gap of you filled something pretty cool and probably reusable and but then you don’t have the time to really validate it in a way that a company that’s dedicated to building software and technology for these types of things. So I know you’re very busy doing your actual job. You know, Joe mentioned this. Like, we you might not have the time to spend time to do the validation that, like, someone like us at �Թϲ����� would be doing. But there is the some checks that you can put in place that can just help you think about, what kind of problems you can come up with, run run into when you’re building your prompts. So this is where the concept of smoke testing comes in. This is a term boring from, like, development term, a software development term of just checking core functionality. So there’s a few things that you should look for. First one is around consistency. So the question you wanna ask is, did the AI give you roughly the same kind of response every single time? So not an identical response, but consistent quality and approach. So what you’re doing here is you just wanna run it a few times, try some similar examples, and just to make sure that it’s giving you consistent information that you’re looking for. You know, if one output is very professional and thorough and the other output is kinda sloppy, then you’ve got a consistency problem. And, you know, as with any tool, not even just with AI, any tool or service that you’re using, you want to have consistency and predictability in what it’s giving you. The second thing to look for is around real reality alignment. So does this match how work actually happens in the field, like, reality? So compare the AI outputs to what you as an experienced professional would actually do or say or write. So would someone in my position write this? Does it sound like something I would say to a carrier or a homeowner or my team members? So what you’re looking for is that the output should really require very minor edits as opposed to, like, a rewriting. Because if it’s rewriting, then that’s that’s not useful for you anyways. So, you know, for example, if we go back to, like, the assessment report, you’re it’s writing a report, but then everything is kind of generic. There’s not enough information in there. It doesn’t reflect, you know, someone who has been in the industry for twenty years and that the experience that comes with that, then that’s a reality alignment problem that you’re having that you should watch out for. The next piece is around edge case awareness. So this is when things don’t go as expected. So what does this do when things are messy or it’s out of its comfort zone? Like, AI is out of its comfort zone. So how you would test for this is, you know, we tried the examples that are very similar examples in the first around consistency. Here, now you wanna start testing with incomplete or conflicting data or unusual scenarios that it does that you haven’t it hasn’t come across before. So what you’re looking for here is, like, whether the AI know that it’s out of its depth. So this is where a good prompting will really stand out here because, you know, a good response would be that the AI would say, hey. I need more information here for me to complete this accurately. Whereas a bad response might be an AI going out and actually just making up information just to fill in the gaps. So that’s where the hallucination piece comes in. So, you know, depending on your workflow or what you’re trying to achieve with your prompt, making up stuff can be really expensive. You know, it can back impact the work itself. It can impact, like, cost downstream or kinda break down trust with you and your team. So you want to know you want the AI to know what it doesn’t know. And last, around assumptions, visibility, and risk. So this one, what you’re looking for is can you tell what the AI is assuming, and what happens if those assumptions are wrong? What is the risk associated with that? So this can be as simple as you can build it into your prompt of, like, asking it to list its assumptions, or you can even just ask it afterwards after it’s generated the output. And then reviewing them and saying, what is the business impact if any of these things are wrong? So kind of the the piece around, like, risk calibration here is, like, if something is low risk, if you’re using the prompt to generate something just for you personally to use, that’s not going you know, no no other eyes are going on it, probably low risk. So if it is slightly off, it’s probably okay. But whereas if you’re building a prompt to put together an estimate, for example, then if there is anything assumptions are made in there, then there’s probably a lot more that’s a lot riskier for you as an operator. Right? So the more business critical the output that you’re asking for from AI, the more careful you wanna be around the assumptions. So then, you know, I think this could kinda, like, captures the main red flags that you would be looking out for when you’re filling your prompt. One, AI misses important details that you would catch. So if you’re finding yourself reviewing the outputs and it’s missing important information and you have to fill in the blanks for that, then that’s probably not saving you any time and not not something that’s production ready. And then another one would be it requires a lot more editing editing than actually starting from fresh. So in that sense, probably not helpful again. And then this one is is the next couple of ones are very obvious, and you don’t want it to get to this point because it probably should have passed your test before getting to your team or your customers. So if you are sharing a tool with your team and they use it a few times and they say, okay. I I don’t wanna use this anymore because I can’t you know, it’s very unpredictable, then that’s a clear sign that it’s not ready for use. And then, again, going out to customers or external stakeholders that are questioning the quality of your work, then that’s a a big problem. So as Joe mentioned and Veronik, you know, AI is very good at storytelling. It’s very good with words. But in the restoration industry, if the narrative doesn’t match and align with the evidence, then it’s definitely not good enough to go out. So if you’re seeing any of these patterns, you know, some tweaking might help it, but it might just end up being a task that’s too complex. You know, we we talked I think Joe talked about this a little bit. When something is a little bit too complex and requires more systematic evaluation to get it to a point of, okay. This is ready to use across my company. That’s okay. Let my just be say, okay. This is not a thing for me to solve This is something that maybe I should outsource. So everything we’ve talked about so far is really around what, you know, you as an individual might do or a small team might do. But I want to talk about also what an AI evaluation process should look like at scale when a company is dedicated to building AI solutions or what it should look like anyways. So at on at scale, so like what we do here at �Թϲ�����, things kinda shift. So it’s kinda a lot more we’re running our our solutions against a much larger dataset. So rather than, like, ten or twenty or thirty, we’re running against hundreds, if not thousands. And then we’re trying to use real production data as much as possible so that it reflects the, like, the messiness and, like, the true scenarios of what’s happening out there. If we don’t have real production data, we’re very thoughtfully creating synthetic data that can simulate that. And then using representative data too as a part of the testing process. So building the dataset itself is such a critical piece of being able to capture all the variables in which AI could fail in the solution. So being really thoughtful with our product managers and being like, hey. What are the the variables that we should be considering? And then making sure that lives in our dataset is really important. And then analysis at scale, so it’s no longer intuitive. It’s not just like a gut check that you’re doing. It’s really about having something systematic in place. And so at each step, we’re kind of identifying what’s off, and we have a human in the loop labeling what the issues are and categorizing it, and then we build tools to actually look for those issues in an automated way that so that, like, we can do this at scale and also be able to monitor for for issues in production as well. And then the last piece here is that we do have metrics tied to business risk. So, you know, every type of failure that AI can fail with does not have the same impact. So we’re looking at the business impact or the user impact for each failure and then deciding what the threshold is for what is acceptable before it goes into production. So I yeah. I wanna show you high level of, like, what what you would expect a professional AI evaluation process to look like. So this is what we’re doing here at �Թϲ�����. I’m not gonna walk through each of these steps, but there are, we do have a nine step process that we with decision major decision points in place that we follow so that we can ensure that what we’re building meets the, like, success criteria that we’re establishing, and we feel confident in releasing it to you as the users. So, you know, you’ve noticed that, like, we build the solution. We’re not building the perfect solution, but then we start by building the dataset that we can test against. And in that process is where we refine, analyze, measure, and improve on that solution to get it to a place where it it becomes, you know, production ready, so to speak. And then we build out evaluations as well, automated evaluations. There’s there’s a we’re not just building that initial solution. There’s other solutions that we have to build within this in order to for it to even get to production. So there’s a lot of steps involved. And, you know, when we’re building tools to use at scale, like, it has to be something it has to be designed to be reliable. So this is kind of what we’re doing today, and you should expect all your any vendors that you’re using that’s providing you AI solutions to be able to share an evaluation process like this so that you feel confident in what they’re doing and they’re just, you know and it’s not just someone behind the scene putting something together and saying, okay. You you have to pay for this now, and good luck. So let me leave you with a few key takeaways. So good validation takes time, and poor validation will cost you time and money, potentially reputation further downstream. So, you know, put in if you’re gonna build something yourself, like, put in the time to do some good validation around it, and then make sure that you test on messy real world scenarios and not just clean examples so you’re not teaching your prompt just to handle easy cases. And the goal of AI isn’t around perfection. It’s never gonna be a hundred percent accuracy or so it should just be predictable and reliable so that you can trust it to do work that you’re trying to optimize for. And finally, set some clear thresholds of what actually what good looks like for you. So, you know, this keeps keeps you from having to chase the perfect prompt or sharing it with your team prematurely or using it in with client work. So it’s not you know, you wouldn’t give a new employee access to customer files without training, so don’t give your ASLF AI without testing. It’s not about being paranoid or slowing down innovation because it is, like, a really it’s a really exciting time working with AI and seeing what the potential is and, like, optimizing your operations and workflows and all that. It’s just about being taking a more professional lens with it, and it’s it really is a tool that could sell serve a purpose in your organization. So do the level of validation that makes sense to do that. And, you know, start with the checks we have today. And if you’re building something that needs to scale up, then you can consider that in in the meantime. But, ultimately, just test it before you actually trust it. And that’s it. Thank you so much, Diana. That was so helpful, I think, at an individual level, and then just understanding what what we should what we should be expecting of our software vendors when it comes to responsible deployment and, responsible use of AI in enterprise solutions. So thank you so much. I am going to, I don’t think we have any questions, and we’re out of time. So that works so well. I can transition over to our next guest. We’re just waiting for him to join the webinar. Thank you, Diana. We’ll talk soon. I’m gonna move over to James Larosa. So I don’t know if you guys have noticed, but we start we structured this this boot camp, this AI webinar in a in a specific way. We started with sort of those boots on the ground, those restorers who are working in their businesses every day and looking at how they can implement AI into their businesses. We transitioned into some technologists and looking at, you know, enterprise level and how �Թϲ����� is building building building AI and how that can translate into your individual use of AI. And for our last two sessions, we’re gonna transition to actual solutions and and how AI is already being used to drive real improvements for restoration contractors. So I’m gonna hand things over to James. He’s the CEO of Restoration Growth Partners. Restoration Growth Partners is an all in one digital growth partner exclusively for restoration contractors. They’re delivering ROI first digital marketing that helps businesses grow faster and smarter. They provide a comprehensive suite of services including, is what what James is here today, to talk about AI search engine optimization, Google Ads, local service ad ad management, local SEO, and traditional SEO, review generation, and transparent reporting through an ROI tracking portal. Super interested to hear what James has to say. I know from a con as somebody who who does content marketing, everything is constantly changing in SEO and AEO, and I can only imagine what that means for the restoration contractor and how they get visibility in their markets and how people are searching. So really excited to hear what James has to say, so I will hand it over to you, James. Thank you very much. Great. So thank you for, everybody for attending. Thank you for having me here. I’ll, hop into it. I’m gonna try to go a little faster through this presentation because I think we’ll have a lot of Q and As, so I wanna leave some time for that. So the first thing I wanna talk about is really how the way homeowners are finding restoration companies is changing. Right? This is more of a high level overview, but the entire market is shifting. What I first want to start with is we do have all these different AI agents out there. Right? We have ChatGPT, Claude, Google Gemini, Grok, and hundreds of others. The interesting thing about this is there’s a lot of talk that people say, well, Google’s gonna die. Google is dying, and that is not true. Looking at the data from twenty twenty four to twenty twenty five, the amount of searches on Google has grown by twenty one percent. So while these other platforms are existing, Google is still growing. Right? Now on the flip side, with all these platforms, these platforms are also growing. Right? Going from twenty twenty three to twenty twenty five, thirty eight percent of people in the United States are using AI in some way or the other. Right? And it is rapidly growing year over year for a multitude of different use cases, but especially for finding local services, local restaurants, things like that. Right? I think the main point for everybody in here to kind of take away, it’s that digital marketing is fragmenting, and what I mean by that is we still have what I call the king, which is Google, but we have all of these other platforms underneath of it. So this fragmentation is not a bad thing. It’s actually a very positive thing for all restoration companies. The reason being is because all of these platforms are new, you can actually have what I call the first mover advantage. Right? You could submit yourself now, do the things you need to do to show up number one, and reap the benefits of it moving forward before your competitors do it. The analogy that I like to say is, you know, if you were ten years ago or maybe even fifteen years ago, if you invested into Google, if you look at your competitors, a lot of them did do that, and they’re still cemented in the number one, number two spots, and they’re reaping the benefits of taking that first mover advantage. So on the next couple of slides, we’re gonna get into how do you actually take that first mover advantage. Great. So first, we’re gonna cover advertising in the AI area, so running paid advertising. Then we’re going to talk about how do you show up organically without having to pay for it. So again, I’ll reiterate my last point is Google Ads. This is both Google pay per click and local service ads this is still going to be the number one paid lead source for restoration companies, And the reason being is there’s just a massive amount of people who go to Google, especially for home services, so this is still going to be your bread and butter to do right and to get results from. With that being said, with all these different platforms, some of them are starting to come out with advertising options, and some of them are not. The biggest one that is starting to test the waters with running paid ads is going to be ChatGPT. They’re starting to test this on a multitude of kind of more enterprise level businesses, but what will happen is that’s going to trickle down to people like us, restoration companies, so on and so forth. The very interesting thing about chat GPT ads that is completely different than Google Ads or even Microsoft Bing, their search engine as well. Is ChatGPT for right now, this can change, but it is not based on keywords. They are using the AI to understand the customer’s search intent and then map those to the appropriate ads. So it’s gonna be a very different experience moving forward with all these different platforms. Hopefully, it becomes easier, but again, there’s there’s just a lot of opportunity here. Other platforms like Perplexity, they’re already testing, like, sponsored follow-up questions, which are also ads. One of the biggest players in the space is Claude, and they’re actually taking a no ads approach. So again, there’s all of these different platforms, and they’re all taking different types of approaches with paid advertising. And one more point I want to make when it comes to paid advertising is the early mover advantage again. And so because there’s not going to be a lot of restoration companies and also not a lot of marketing companies testing out ChatGPT ads when it first comes out, this is a great opportunity for everybody in here because if there’s less competition, it means your cost per qualified lead is going to be significantly cheaper than running Google Ads, or maybe you’re paying thirty three mile radius or inquiry leave for leads as well. It’s gonna be significantly cheaper on these other platforms. Great. Then we are going to talk about the organic side of digital marketing. Right? Showing up organically, showing up number one without having to pay for it. Right? So there’s a lot of talk between SEO, which is search engine optimization for things like Google and Bing, and then there is AEO, which is for an AI engine optimization. Right? The beauty about this is around eighty to ninety percent of optimizing your business to show up in platforms like ChatGPT is taken care of by traditional SEO. So if you’re doing things like having a very fast loading website, having high quality content on your website, so on and so forth, that is already gonna be the foundation of you showing up in these AI platforms. Right? I think one of the key differences between, like, foundational, traditional SEO and AEO, optimizing for these AI search engines, is the way you write content. Right? When it comes to Google for majority of the history of Google, it’s been kind of keyword based. Right? Figuring out what keywords to use in content, how do you structure it, where do you put it. Right? AI doesn’t necessarily care for keywords. What they care for is high quality information that they can trust because that is how they make their recommendations to the people searching. Right? So an example of this is, you know, being the answer, not just a result, is creating content for almost every single instance your customer could encounter. This is like burst pipes, ceiling leaks, flooded basements, things like this. It’s not enough anymore just to have a water damage page on your website. You have to have all of these subpages talking about every situation they could potentially go through. The third thing on here, and this is, to me, if you can take anything away from this call, this is the main point, is reviews for your restoration business. As business owner, operations manager, no matter what position you’re in in a restoration company, getting reviews is the number one thing that’ll help you succeed on Google and also in these AI platforms as well. Right? And the good thing about this is you might be in a market where maybe you have one hundred reviews and your top competitor has one thousand reviews. Right? And you say, well, James, this is great information, but how am I ever gonna catch up to these people? Right? They’re a bigger company. They have more job volume, so therefore, they get more reviews. Right? One of the main things about the algorithm is the algorithm likes to see consistency and freshness versus a high volume of reviews. Right? So if you’re consistently getting reviews on your business profile, even on things like Facebook or your Better Business Bureau, that is going to matter more than the total number of reviews for your business. And then last but not least is the Google Business Profile. When it comes to Google, this is the most important part of Google. It’s gonna generate the highest amount of leads at the lowest cost. Right? So making sure this is up to date with pictures, with posting, with an FAQ build out on your business profile, and then obviously reviews as well ties into that. But these AI platforms are really putting a heavy emphasis on the Google Business Profile when recommending local businesses, so making sure you’re staying up to date with that is extremely important. Great. So we talked about both the paid ad side and the organic side of things. Now I think it’s important to take it one more step further, which is really capturing the reporting data and the effectiveness of your campaigns and then making decisions to make those campaigns better, Right? So one thing that I like to say is whenever we talk to potential clients is they say, Well, I get, I know, a hundred phone calls a month from my website. My website’s great. And then you say, Well, out of those a hundred phone calls, how many of them are qualified leads? Then how many of those are actually turning into a job? And that’s where a lot of restoration owners, in my experience, that is where the data falls off. Right? A phone call is not a market qualified lead. A phone call could be somebody who’s calling looking for a job. It could be a vendor trying to sell you on something, or it could simply just be a spam phone call. Right? So this is why it’s extremely important to actually qualify every lead using AI. Right? And this is not a super technical thing to do. It’s very simple to set up. But basically, as you have an AI and you train it on the data points that matter to you. As a restoration business owner, what makes a qualified lead? For our system, the way we do it is three main points. Number one, are they in the serve are they in your service area? Number two, are they looking for services you provide? And then number three, is the person calling can they give you the authorization to allow you to start the work on the property? So renters do not count on this. It’s gonna be a homeowner. It could also be a property manager who doesn’t have an established relationship with a restoration company and they need help. They have the authority to give you that authorization. Once you collect this data and you figure out phone calls to market qualified leads, then you can start saying what is your best performing channels, right? What are the pages on your website that are driving the best results? What are the keywords that are driving the best results? And then you can make optimizations on top of that. And then last but not least, if you are running paid advertising, you can feed this data back into specifically Google. You can tell Google that, hey, these are phone calls, and then these are market qualified leads, and then this is the revenue from these leads. Then at the end of the day, once you have enough revenue, you can then start optimizing for dollars in, dollars out, which is eventually where you want to get. You don’t want to optimize for clicks. You don’t want to optimize for calls. At the end of the day, you want to optimize for dollars in and dollars out. Great. And this is everything I said, an example of all this actually put into practice. This is a company we work with based out of Chicago, Romextera Restoration. By us utilizing AI, scoring these leads, getting the revenue, and deploying the optimizations I talked about with the website and the paid ads, we’re able to bring their cost per scope water damage or ESR project to under five hundred dollars. So this is not a lead. This is not a phone call. This is actual projects that are entered into their CRM that cost under five hundred dollars. So when you’re able to get all this data, you can really make powerful decisions to improve the campaigns and ultimately the bottom line of your business. Great. And then here are five quick action plans that I would like everybody to take in here. Number one is running a free audit on your website. You can go to website greater dot com, and it’s gonna tell you a nice general overview of your website. What’s good, what’s bad, is it optimized for AI platforms because there are certain optimizations that you can do. Number two is building answer based content. So again, a great example is, my kitchen ceiling is starting to leak. What should I do? Right? This is the natural way people are starting to search, especially with these AI search engines, is they’re just speaking naturally to it like they would a human, so you need to make content that serves that purpose. Obviously, getting reviews and getting them consistently is huge for both Google and for AI. Tracking market qualified leads, you need to know what leads are real and where they’re coming from. And then last but not least, at the end of the day, you need to use that data and actually action it. An example is feeding that back into things like Google Ads and being able to increase the effectiveness of your campaign based on the data that matters. Cool. And three quick takeaways. We’ll get to the Q and A if we have time. Search market is fragmenting. This is a positive thing for everybody in here. It is not a negative thing as everybody can get the first mover advantage and submit themselves on these new platforms before your competitors do, and then you’re playing catch up. Also, with running paid ads, these new platforms are gonna be surprisingly cheap, is my opinion, for the near term of running ads and getting results, much cheaper than running ads on Google or buying leads from third party lead vendors, and then obviously just tracking your market qualified leads and ROI and making business decisions based on that data. Thanks so much, James. I was definitely learning a lot. I’m deep in the throes of learning about specifically con content and how we can we can show up in these AI search these AI searches. So definitely super interesting. We do have a bit of time for q and a if anyone has questions for James. Oh, one just came in. When do you believe ChatGPT will be doing ads? So it’s rumored they are already testing it. When it’s available to people like us, because it’s currently available to enterprise level, I am not really sure. I’m going to assume it’s going to be at least sometime this year, as they’re they’re a growing business, they wanna increase their revenue, and ads are a part of that. Alright. If James, if somebody wanted to get started on this path to sort of modernizing their lead, their funnel with for AI tomorrow, what what’s the first thing they should do? The first thing they should do, and this is the easiest, is optimize your Google Business profile. So professional pictures. There’s an FAQ section that you can fill out. Get your reviews, and make sure that you’re posting at least a few times per week. A lot of people don’t know it, but the Business Profile section has like a mini blog posting feature. So just putting that high quality content on there, again, along with your website, but on your business profile will really help you in the near future. Great. And I’m just gonna jump back a slide, so if anyone wants to reach out to James to ask any additional questions or leverage his services, his contact information is on the screen. You’ll also be when when the webinar ends at three o’clock today, you’ll also there’ll also be an option where you can check a box to to have James reach out to you if you’re if you’re interested in learning more from him. So yeah. Any other questions before we before we move on? It doesn’t look like it, so I will transition over. Thank you so much for joining us, James. We will transition over to our last but not least presenter of the day, Jacob Cleveland. He is a partner at Breezy AI. I came across Jacob in a recent a r article that he wrote for CNR Magazine. And like I said, he’s a partner of Breezy AI, which is an operating system designed specifically for restoration businesses. He helps contractors eliminate missed calls, deliver consistent multi channel customer communication, and automate the administrative workload that slows cycle time and delays accounts receivable. Before joining Breezy, Jacob served as the CTO of one of the top ten serve pro franchises in the US, so he’s got that boots on the ground restoration experience as well. But he began his career as a consultant to b to b enterprise companies helping align sales, marketing, and product strategy. So today, he brings all of that experience together, the restoration restoration experience to help businesses modernize their operations and compete in a rapidly changing market, which is, I think, one of the key themes from today, which is everything is rapidly changing. There’s a lot of noise out there. We wanna try and turn down that noise a little bit. So I’m gonna turn it over to you, Jacob, and thank you for your patience and waiting around. The floor is yours. Thanks, Leah, and thanks for everybody for sticking around all this time. I really appreciate it. Like Leah said, my name is Jacob Cleveland. I’m with Breezy AI. And about a year ago, honestly, almost to the day, I was exactly where many of you are. I worked at a restoration company, and I was researching how to implement AI into our business. I attended webinars just like this one, and I looked at every tool I could find. Next slide, please. So from smart glasses for remote coaching to AI powered mobile training games, I really did look at it all. But then I realized I was thinking about it the wrong way. So I shifted my focus a bit and started with the outcome I wanted and then worked my way backwards into the technology. And for me, what it really came down to were two things. Next slide, please. Increased revenue capture and decreased labor cost. Alright? So today, I’m gonna walk you through each of these goals, my thought process when I was choosing a vendor, and then I’ll give you some real world use cases and practical tips on how you can achieve these same goals in your restoration business. Next slide, please. And when I started to drill down into how to use AI to capture more revenue, I started with what James just spoke about. Alright? How to make our phones ring. And since our franchise was in a rather competitive market, probably like a lot of y’all, and, unfortunately, some folks in the franchise system can’t control their own website content. So our ability to drive organic SEO was limited. Our main lever to pull to make our phones ring was paid search. For us, a water loss would cost about three hundred and fifty dollars every time that phone rang. So before I started pumping money into more marketing, I wanted to know how well we were doing at capturing the leads that we’re already calling. What I discovered was terrible. I lifted I listened to our after hours calls first. We were using a call center, probably like a lot of y’all, and the customer experience was horrible. And folks were getting annoyed with the a plus minute script that the call center folks were drawing through, and our leads were dropping before they ever even got to us. Then I started listening to our business hours calls. Honestly, they weren’t much better. So the conclusion I came to was before I dropped a bunch of money on making my phone ring, I needed to ensure I could capture those leads when I came in. That’s when I decided I was going to look at AI intake. Around this time last year is when I started to think right. Customer service was one of the first use cases of AI, and AI voice had finally gotten to the point where I felt like I could trust it with my customer interactions. And then we dug into our missed call numbers, and that’s really when I knew I had to do something. Next slide, please. So this slide shows real data that we at Breezy see in almost every customer of ours when they come to us, and it mirrors my experience almost exactly. So Breezy data shows that even in top performing restoration businesses before AI, about twenty five percent of calls go unanswered. They hit voice mail. Right? An average restoration location gets about four hundred and fifty calls per month. That doesn’t include spam or hang ups, which are on the rise. And about twenty five percent of those go unanswered. So that’s about a hundred and thirteen calls a month. And from our data, we see that one in ten calls are for service. Actually, almost right to the point, so ten point one percent. That’s eleven high intent leads per month we were missing out on. And the average water loss is somewhere around four thousand depending on your market, right, and revenue potential. So when you multiply that four thousand by eleven, that’s forty four thousand dollars a month. Over half a million dollars a year, we were losing just by not picking up the phone. And that’s when I realized the fastest way to increase our revenue with AI was rather simple for us, answer every call. At the end of this presentation, I’ll walk you through how we evaluated vendors. And everyone in this webinar will also receive a PDF containing step by step instructions. I know I do agree with all the presenters here about the challenges and the privacy issues of using consumer grade tools. But I also know the struggle of trying to meet payroll. Right? So if you’d like to build a DIY system to automatically log every voice mail and missed calls, summarize those calls with AI, and then alert your team in real time so no leads flips through. Check out that PDF that you’ll all receive. Next slide, please. And it’s it’s not gonna be any big revelation to anyone here that in restoration, our largest expense is our people. A lot of folks, right, in the ether of marketing and AI in the news are talking about how AI is going to replace people. In all honesty, it likely will, some of us. But how I think about decreasing labor cost is more about increasing the efficiency of team members. Right? And there are three main strategies that I’ve seen help dramatically reduce labor cost through increased efficiency. Those are data capture, speed, and scale. Next slide, please. So I’ve already spoken about using your phones and intake to capture more revenue, but another giant benefit we found at the AI intake was clean FNOL data, first notice of loss data, every single time. Every time an employee has to call a customer back to get their correct email address or ask if it’s self pay or insurance, that’s labor cost. Right? And AI can pull in real estate data, so you get your year billed, your square footage, and listed owners. All of these questions that cause intake to slow down and eat up your team’s time. Now in the fields for years, and �Թϲ�����’s great at this, right, good software principles included what was called one thought per screen. Think of this like TurboTax. Right? Instead of giving you a long checklist of tasks, it chunks it up so you have one thing to do per screen. AI allows that linear task list to be driven by more variables than simply what was the previous answer. In practical application, this means AI can help field staff determine complex next steps by a whole bunch of data points, moisture readings, day days the DQs have been in place, right, as the self pay or program work, and on and on. It can also help turn unstructured data, like field notes, right, sentence structure, into structured data. This is important because as more and more insurance companies use AI to approve or deny claims, having your job files structured correctly can make the difference between getting paid today or maybe getting paid three months from now. All of these efficiency gains result in less time spent per employee, and that leads to not just reduced labor cost, but also increased capacity capacity per employee. Now one of the biggest opportunities for efficiency is actually much quieter and happens in the back office. If you watch how an office coordinator or a JFC, a job file coordinator, spends their day, a surprising amount of time is spent not making decisions or helping customers. It’s spent merely moving information, creating a job in one system, copying it to another, sending emails to notify the next person, and on and on. It’s repetitive, and it’s constant. And as your work volume increases, that workload grows almost perfectly in proportion. You double the jobs and you often feel like you need to double the admin support just to keep everything organized. Now this is where AI and better data capture can make a real practical difference in your business. When your job information is clean and structured, the system already knows what’s happening. And once the system understands the state of the job, it doesn’t need person to manually push every step forward. Just like we what we spoke about for field staff, the data itself can trigger the next action. A job gets created and a task is assigned automatically. Right? Drawing hits completion and the next visit is scheduled. A scope is approved and billing prep begins. Instead of somebody typing, retyping, emailing, and chasing, the workflow simply advances on its own. The role of the office team then shifts from acting like human connectors between software to focusing on exceptions, decisions, customer service. It’s not very flashy, but it is incredibly effective. By removing hundreds of small manual touches that quietly eat up every hours every week, the same team can comfortably handle far more job volume without adding headcount. Next slide, please. So everyone on this webinar will likely nod their head when I say about ninety percent of what we do in restoration is communication. We send the same emails, again, back, tell them the same thing that was in the estimate that they didn’t read and on and on. This is where AI becomes really practical because most office communication follows predictable patterns. It’s the same type of updates, the same questions, the same responses. And when something is repeatable, it’s a perfect fit for AI. You don’t need new systems or complicated integrations to do this either. If you’re using Gmail, the AI is already built in. So Gmail now includes a help me write feature powered by Gemini. It kinda looks like some diamonds on there that can draft emails for you correctly inside the compose window. Instead of starting from a blank screen, you click the button and type some simple instructions like write a short friendly update telling the homeowner we’ll pick up the the Hughes tomorrow or draft a professional status update for an adjuster. It can generate clean drafts in seconds, and then your team just reviews and tweaks, right, keeping that human in the loop, as they say. You’re not replacing the person. You’re eliminating the slowest part, which is writing everything from scratch. If you’re not using Gmail, you can use ChatGPT. There’s actually a section on how to do this in the PDF I’m gonna share. And it gets even more useful when you apply it to everyday restoration workflows. Right? You can paste filled notes and ask AI to turn them into clear summaries, right, keeping that personal identifying information out. You can have it clean up bullet points into a professional email. You can ask it to shorten a long explanation, right, into three sentences. Not a lot of us have time to read long explanations these days. A lot of teams also build simple internal prompts for common situations so staff can generate consistent messaging in seconds instead of minutes. Right? And that brand consistency is very important in that communication. And over time, that consistency can actually improve the customer experience because now your messages are clear and professional instead of rushed and full of typos or grammar issues. But what this really does is it shifts your team’s role from typing to thinking. They’re not staring at a blank email writing the same message for the hundredth time. They’re reviewing, personalizing, and sending. Now for storm response. Right? We just got through the, big winter storm. Well, this is a huge opportunity. I was talking to a CEO of a large restoration franchisor, and he told me that after they implement implemented AI overflow in their call center, they captured more leads in one minor storm event than they had ever captured during any storm event in the history of the company. And that’s because AI can scale up well beyond the capacity of any single office or call center. And then beyond capturing the lead AI, and this is actually something we’re rather proud of at Prezi. It can score your leads based on many, many data points and then rank them from most valuable to least valuable. So, you know, during a storm event, you’re capturing the most amount of revenue possible using the finite resources you have ahead. Now I’m gonna shift gears here for a minute and talk about something a little bit less attainable at the moment, but will likely become ubiquitous in the industry over the next few years, and that is AI powered field guidance and supervision. There are already companies like KnowHow that are doing this using pre uploaded content and surfacing that information through a chat interface for field staff. But some of the really cool things that are on the horizon for twenty twenty six, likely in the later part of the year, is equipping still field staff with smart glasses, right, that allow AI trained on millions of job photos and data to then guide an employee with a base level of training to tackle tasks that previously required specialty training. This is already happening in fields like veterinary medicine, and it’ll help owners and restoration leaders tackle the current labor shortage. In addition can you hear me? Are you all having a hard time hearing me? I just saw it hop off. I’ll speak a little louder. Maybe you can hear me now. In addition to guiding field staff, one of the huge benefits of this technology is its ability to record, sort, and tag billable service items. If there’s no picture of that third trash bag, you’re not gonna get paid for it. Right? But what’s been holding this technology back from being in widespread use so far is really two things. Battery life. Right, current consumer grade smart glasses have a rather short battery life, which make them unusable in a real world work environment. And the second is industry specific software designed specifically for our needs in restoration. Both of these challenges are starting to be addressed by some very capable hardware and software manufacturers. So if you’re like me, you’re probably going to keep an eye out for what’s to come towards maybe middle end of this year. Next slide, please. Now I remember on my first day on the job, I was riding out with the crew, and it was a huge shock to me when I realized that the customer had to agree to us starting work before they ever knew how much it was going to cost. It was also a shock to this customer. Restoration is the only industry that I know of where this happens. This creates a lot of downstream friction. Right? Huge outstanding AR. It’s a major problem in the industry. I actually have it in my notes, to talk about how no one had solved AI estimates yet. But after hearing what �Թϲ����� is working on, me, like y’all, I see in the comments, are very excited to see what they built. Now dispatch. Right? AI can create meaningful speed gains in dispatch. That’s because most delays don’t come from big problems. They come from small manual steps that happen all day long and compound. Someone answers the phone, writes down details, checks the calendar, calls the text, waits for a response, on and on. Each step only takes a few minutes, but when you stack those together, they start to slow everything down. Meanwhile, trucks are sitting idle and jobs aren’t starting. At scale, that waiting time is expensive. Right? And but when you pair AI with good data capture, a lot of that coordination becomes automatic. If the system already knows the job type, location, urgency, crew availability, it can instantly recommend or assign the best crew. Instead of a lot of back and forth, dispatch happens in seconds. The dispatcher isn’t juggling logistics. They’re reviewing and handling exceptions now. Ai also reduces downstream delays by making smarter decisions upfront. You can optimize routes, cluster jobs by geography. This is even more valuable during a storm event. And sequence work more efficiently, so crews spend less time driving and fewer trips are wasted. Even shaving twenty or thirty minutes of travel time per crew per day adds up to hours of extra productivity each week. That’s real capacity without needing to scale up your people or buy more vehicles. In practice, AI doesn’t really replace dispatch. It removes the small bottlenecks that slow everything down. So work starts sooner and jobs move faster. Right? Next slide, please. So when we were evaluating AI vendors, we really wanted to look for a handful of major things, right, specific criteria. Our number one was we knew they had to be restoration focused. There are a lot of general AI tools, general AI answering services, likely your telephony provider, right, even offers one. But what we wanted was one that was trained on IICRC guidelines and knew the industry. Next, after listening to our calls, I knew whatever AI we chose. It had to be empathetic, not robotic. Right? When our customers call us, they’re freaking out. Their most valuable asset is in danger. So I wanted that I wanted an AI that could empathize and provide friendly support without sounding like it was reading a script. Next, scale. Right? We asked, can they handle a storm event? Do they only do after hours, or can they handle twenty four seven with intelligent call routing? Right? Can they take it when a storm events hit and we get five, six hundred calls in a weekend? Right? Then we looked at security and reliability. I know that’s been a big topic today. Right? You wanna know how are they handling your data in �Թϲ����� SOC two type two. You really wanna look for something like that. That shows that they are prioritizing security. And then do they have redundancies and failovers in place? Right? Sometimes AWS goes down. Right? Sometimes Google Cloud goes down. Are they reliant on just one vendor, or can they ensure that your business stays stays operational no matter what? One thing we didn’t look for, because we just didn’t know it’s possible, was a vendor that could also offer their own telephony system. So office phones, right, things like that. These days, you can actually bundle your telephone cost and the AI together, and this allows you to record and analyze every call for business insights. Right? So this also includes inbound, outbound, and interoffice. And lastly, this was a big one for us. Do they integrate with the tools we already used? Right? Internal communication tools like Teams, Slack, our job management platform. This was important because this is really where AI moves from being a call taker to an orchestrator, helping move jobs efficiently through our workflows. And it was that exact journey that led me here today. So I personally went from being a Breezy customer and seeing the impact on our business to being a Breezy employee, helping other restoration leaders increase revenue and decrease labor costs. Next slide, please. And I honestly, I love this stuff. Right? I love helping other restoration leaders be successful. So if y’all have any questions about AI or anything that you think I might be able to add value to, it doesn’t have to be about intake or anything like that, please feel free to shoot me an email. I’m always here to help in any way I can, And thank you for sticking around all day to hear me talk, and I hope this has been helpful in some small way. Thanks so much, Jacob. Yeah. Super, super interesting to hear your journey and hear what you think where where you think things are headed and and what the what the benefits are. We do have one one question that just came in. Does the AI have unnatural pauses in conversation? Well, that’s a great question, and it allowed me to talk about something to look for in the next, probably, three to six months. Right? So what you’ll notice in certain vendors, I am very happy to say that ours is not. Luckily, we have some pretty amazing people that have about fifteen million AI voice interactions underneath their belt. They did AI voice for Intuit before. We get people saying, yes, ma’am. Thank you, ma’am, all the time. We love that. But in some vendors and I highly encourage you to to do your due diligence. Right? What you’re gonna notice in that elongated pause is because of speech to text technology, which is really all we have to work with right now in AI voice. And so it takes the speech, translates it to text, then creates the text response back into speech. That creates a latency. Right? And a part of that latency also comes from do they have on premise hosting? Are they using cloud hosting? Right? So all of that creates it. But what was just released a few weeks ago by NVIDIA, and there are some other folks working on it, Deepgram, FABI, things like that, is called speech to speech AI voice technology. And so it removes that middle layer, and we’ve had the ability to try out some of the very, very early alpha versions, and it’s phenomenal. You don’t even know that you’re not talking to a person. So I actually have a demo line. So if anybody wants to shoot me an email, I’ll send you the number so you can try out our AI. We actually got the best the best compliment we could ever believe, which was somebody said, I don’t think it’s real. So, yeah, give you give you that line. Try it out. I don’t know, Jacob, if you saw the comment, but it got the laugh out of me that plot twist, Jacob is AI. You’d you’d be surprised how many times I hear that. So yeah. And that we love hearing that. It just goes to show that we’re doing something right. So, yeah. Thanks, everybody. Well, thank you so much, Jacob. That brings us to the end of the end of our webinar. I just have a few wrap up items. So I’ll say goodbye to Jacob. So thanks again, Jacob. Appreciate it. And I think that is it for us for today. I’m gonna stop sharing. Thank you so much for spending your time with us today. We really appreciate it was three hours of your time. And I don’t take that take that lightly that you’ve spent that with us.

Good afternoon, everyone. Welcome to the twenty twenty six operator webinar. My name’s Leah. I’m gonna hand things over to the CEO of �Թϲ�����, Paul Donald, and he is going to take things away for us. Thank you, Leah. Thank you for all your work putting this together. Welcome all who have joined us. This is a really exciting webinar and something that’s, you know, near and dear to my heart. When I started �Թϲ����� nearly fourteen years ago, it was really to help restorers who care about their communities, give their all, become operators. I think we all know how much the world has changed just in the past four years to five years since since COVID. So we had a massive change in COVID. And then post COVID, what we’ve seen is, you know, things like AI really transform almost every industry. And if you net it all out, no matter what industry you’re in, your being able to be competitive really nets out to operational excellence. And so we felt it was really important to discuss this topic with three of the individuals that I highly respect, and they devote their time to helping restorers build operational excellence. So as Leah said, I’m the CEO and cofounder of �Թϲ�����, and my passion is for serving this industry who’s passionate about serving their their communities. We couldn’t have an effective economy without this industry supporting the rebuilding when bad things happen. And so with that, let me turn it over to Brandon Reece to give a little intro. Yeah. Sure. Yeah. Thanks for having me on the panel. This is gonna be, I think, a really fun discussion. I enjoy hanging out with Lukas and Josh and hearing the things that they have to share. So I’m hoping to play well off of that myself. So I’m CEO with FP Restoration. We’re based in Florida. We got five locations that we operate down there, full service restoration, residential to commercial. And then I also have the honor of being a partner at Floodlight Consulting Group. And so that’s where that partnering with other restoration companies around the nation, comes from. Been in the industry about sixteen years, held almost all those positions that that we commonly have inside our organizations. And and right now, I get to specialize and and focus on scaling up a larger full service firm, and I’m surrounded by some really rad operating partners. So it’s been quite an adventure so far. Alright. And, Josh, over to you. You and I have worked together since your days at JC. So Josh gave a little intro. Paul, I heard you say fourteen years at �Թϲ����� and made me stutter a little bit because I mean, all the time. Right? Yeah. Guys, thanks for having me. I’m Josh Bachman. I I currently work with Veolia, and my background is just kinda like Brandon’s as an operator holding all the different seats both at a company in San Antonio, Texas where I grew up and then more recently here in Chicago at JC, like like Paul mentioned. Four years ago, I had the opportunity to move over, to the consulting side, which means I now have a chance to take my teaching background, which I started my career and and and then use my experience in restoration and really hopefully help some people avoid some of the pitfalls and and roadblocks that I ran into in my career. So that’s currently what I’m doing. Great. Thanks, Josh. And, Lukas, you and I have been, collaborating since the very beginning of time as well, fourteen years ago. So give us a little background on you. Yeah. The same as Josh. I was like, you said the fourteen years, and I’m going, man, I remember when you and I met, and you were starting with the incubator and a couple of developers, and we were kicking ideas around. So, yeah, I’ve been in the industry for just around twenty years or so. Entered the space with my company, Luxor CRM. Some people may still know it, which was sold in twenty sixteen, and then founded Sanctum in twenty eighteen. So the industry definitely near and dear to my heart made great amounts of relationships, friends, and and it’s something that I that I definitely love doing. At Sanctum, for those of you that may not know Sanctum, at Sanctum, what we do is we specialize in assisting restoration contractors in developing highly performing business development teams, which consistently surpass their goals, particularly in the commercial sector. And we do this by implementing our proprietary RIPS process, which stands for restoration industry co selling, the first restoration specific sales process. And, yeah, we do this by either fractional sales management or we have an educational component to our company where we teach how to do this, so you can roll this out on your own as well. So my point on today’s webinar is primarily gonna focus on positioning it from the sales and business development perspective. Great. Thank you very for having me, Paul. Yeah. Thank you. My pleasure. We have a wealth of experience we are going to draw from today, but let’s start with a poll because what we’d like to see is how many of you fall into the small, restore side, which is less than a million? How many of you fall in the one to three million, three to seven, seven to twenty five, and twenty five, and that will help direct this conversation. Even though we are going to touch on each of these points throughout the discussion, this will just help us to know what what the majority of the topics we should cover. So if you fill this out, we’ll, move forward with the webinar. But what you’ve got is you’ve got Brandon, Josh, and Lukas with a breadth of understanding within this industry that we wanna draw from in terms of how do you scale because operational excellence really plays into how your business grows no matter what stage you are. But your available resources will predict where you focus. And so as a small restorer focusing on getting to, you know, two you know, one million, two million, three million, you’re gonna start to change. Alright. So here we’ve got so majority are three to seven million. We’ve got quite a few in the one to three, several in the one million, and a couple in the over twenty five. This is perfect. Thank you very much, Julia. So the strategy. Most people or or most restoration contractors think operations or many think their operations is about winning the job and doing the work, but it goes way beyond that. The best operators know that it’s about building the sales funnel, as Lukas will talk about, selecting the right work that aligns with where your best margins are, and, you know, really building that machine that can manage the process from the initial call all the way to cash collected. Because if you can’t handle the calls and you can’t collect the cash and you can’t keep your customers happy all the way through that journey, your business isn’t gonna scale and you’re going to struggle. So when you’re under one million dollars, and this is a a question to the panel, and maybe Josh will get you to start. When you’re under a million in revenue, what operational processes do you think are most important to establish early and maintain? Yeah. Paul, thanks for thanks for putting that one out to me. I I think, when I think about a smaller company and somebody that’s just getting started, it’s it’s really just establishing those good solid core rhythms around making sure that we’ve got access to what’s going on in our business quickly and efficiently. So it’s really about just building good habit patterns. Like Yeah. Are you paying attention to what’s coming in the door? Are you paying attention to what’s going out the door? And I mean that from all the different areas. Right? Not just revenue and those kind of things, but expenses and equipment. And and you just have good operational rhythm set up to make sure that we’re keeping tabs on what’s going what’s happening in our business. And I think all too often, we allow that to just go by the wayside. We get busy, and suddenly we look down and it’s five o’clock, and we’re just now getting back to the shop. And we’re like, I’ll get to that tomorrow. And all of a sudden, two weeks go by, and we don’t realize what’s happening in our business. So if I could if I could just stop that and get into good rhythms at the beginning and maintain those forward, I think that serves us well as we move into the next stages of our our business. Perfect. And, Brandon, you know, a small operator less than a million dollars says, I can’t afford an operational head headcount. I can’t afford the operations. I just need to do the work. What what do you say? And that’s the I think that’s the biggest hurdle to get out is that first, you know, how do I move out of the truck? I think that’s definitely the biggest challenge. I think, you know, kind of almost piggybacking off what Josh said. I think that first move is determining what it is that the owner’s doing that’s working in terms of retention of that relationship and the satisfaction of the relationship. So one of the things that happens early on in a business, because it’s predominantly the owner doing the work, they have a a real intimate connection to the level of effort and work that it takes to get the client and then do the job well. And so I think one of the very first things that we wanna try to synthesize is how do I do what I do because it seems to be working. And and so I think, you know, that first move out of the truck is you don’t have to build all the systems and processes right out of the gate. But can you synthesize what it is that you prioritize by the way that you think about the client and what it took to earn that client and then what you did to keep that client? And if you can take some midnight hours or burn that candle at the, you know, both ends for for out a few hours and put that into a playbook, that could be one of the most powerful force multipliers that you leverage to continue to get out of that one million mark and start adding staff and production team members. Perfect. And, Lukas, a specific question for you. How does the operational excellence, translate into growth beyond a million dollars? What aspects of that operational excellence are gonna help you really grow? Yeah. I think, you know, at that stage of the business, I I think Brandon, said it really well that, you know, you’re probably doing a lot of things and deciding on what you should be doing and what you could offload onto somebody else that both you don’t wanna be doing or maybe are not the best at and recognizing that early on is really important. But when I look at companies that are under a million and some of the the structure that you wanna put in place early on so that you can jump above that million really quickly all revolves around making sure that you’re capturing specific data. Right? And what I mean by that is when you start your business, somebody starts sending you a little bit of work, and you may have two or three people that you know. Some of them may even be your friends or you know an adjuster or whatever it may be. And that’s really easy to manage. Right? But the minute you get that fourth, fifth person sending you work, you’re now just busy working. Right? So the next step is trying to decide what things do I really wanna be doing and what things do I wanna start saying no to. But more importantly, and a lot of companies don’t do this, and this is precisely why they either don’t get out of that one million or take way too long to get up get above that one million is they do not grab every referral, okay, or every lead or whatever you wanna call it, what they’re doing at that first stage is they’re using the basic systems to only track jobs. They get a phone call. They run to it. They take a look at the job. If it doesn’t transpire to anything, they don’t do anything with them. They don’t actually capture it. And that’s the first mistake. Because when you’re not capturing it, you’re not understanding where it’s coming from. Second is actually knowing is somebody influencing that work to come to you? And if so, capture it. And invest early on. Even if you don’t have a business development route, invest very early on in a system that allows you to understand. There’s six people that now give me consistent work, and this person sends me work on average in every twenty two days, this one every seventeen, this one every eighteen. Add something in place that lets you see those six because you can manage three, but you cannot manage fifteen. And if you do that early on, when you decide to actually put some focus and emphasis on business development, it becomes really easy to grow because you should be going to your existing clients first. It’s the cheapest way to Yes. To drop it. And by the way, that I’ll get through the cyclicality of the industry by able to manage several resources for leads. So this is really critical of the importance of data at every single stage. But even if you’re a single operator with the tools on, you cannot forego the data, whether it’s field documentation, whether it’s leads data, your invoicing. All of that plays into a customer experience and your profit margins. So let’s go straight to the scaler. So, you know, you’re now scaling your three million dollars in revenue. You didn’t expect this because but your overhead costs are skyrocketing because you’re under a bigger facility. You got more people. Your invoices are getting scrubbed. Your head’s spinning. What do I do now? Where what are the priorities, and what are the metrics I’m tracking? Let me throw that over to you, Brandon. Yeah. That one is it’s big. I I think one of the things that in full transparency, our team is recentering around right now is this idea of, can we identify some KPIs or or some kind of performance levers that ensure that what we’re doing is creating a really great client experience? And so we’re looking at things like timetables, time frames, like site inspected to estimate submitted, for instance, as an example. And the opportunity there is to kind of, in the midst of all the chaos, identify the things that we can look at as actively as possible while work’s still in motion to give us an opportunity to have success at the end of that project. Does that make sense? Almost more living in the leading indicators, right, versus this thing I look at when it’s already over. And so right now, we’re just doing kind of a reconviction and a heavy emphasis on all those time frames from the site the time I get to meet you for the first time to how do I get this job produced and closed, paid in full as quickly as possible. Because often, it’s those points that if we’re really strict on those time frames, we’re creating a great experience because we’re not allowing, you know, approvals to go too long. We’re not allowing the client to sit too long without some kind of meaningful communication. And so maybe the simplest answer is try to identify leading indicators more than lagging. And some of those to focus on very early on are time frames that affect the client the most meaningful. Oh, Paul. Maybe I lost Paul there for a second. Yeah. Yeah. The answer was so good it froze him. Right. Yeah. It froze him. Yeah. He’s done the I Oh, sorry. I froze there. Yeah. No problem. Good good old Internet. Internet. Yeah. So, Josh, let me throw this over to you because I got most of what, Brandon, you were saying. But having clear indicators and well defined and well taught SOPs, what does that translate to for this size of group? You know, I I I think at it, when I look at it and I agree with Brandon. If I can get to a point where I’m looking at stuff that’s on the leading side, I’d prefer to do that. But I think there is a value around some of those lagging things that we talk about there. And and I think it’s really important that if we’re gonna be paying attention to things that have already happened, that we do a debrief and see what cause what was the causation behind those things that happened. And and I also like whether it’s SOP or KPI, I like to have a a layered approach there. Meaning, I don’t wanna get to where I’m presenting forty five matrix or metrics to somebody to try to track. It’s the key three, four, or five. And I think they’re a little bit different to every company, so I don’t wanna say here’s the five. I I I think that’s a little bit of a of a of a personality to your company. But what I would say is I’d be prepared with not only those initial five, but then what are the next ones underneath that that you can go grab onto. Something practical I would think of is if I’m looking at gross margin dipping, then what’s affecting that? Maybe what’s affecting is labor. Okay. Then I go down and pay attention to labor. What’s affecting labor? Well, maybe I need to go pay attention to my overtime hours because I’m letting that extend. But if I just throw out overtime hours and say, track your overtime hours, well, you don’t get the reasonable amount. Yeah. To track your overtime hours. Right? It’s really a a subsection of that gross margin conversation. So, you know, I look I look to have that layered approach as I work through things and make sure those aligns with what we’re doing from a process and procedure perspective because, really, I wanna put that overtime metric if I’m gonna use that in front of the people that can affect it. Right? So I’m gonna look at my technician can affect overtime. Not really. He can do where it’s work efficient, but I’m looking for who’s managing that technician to manage overtime. So the metric’s gonna be in front of that manager so that he can, you know, give accountability, ask good questions, find out what’s going on, and and really work to affect that metric. Yeah. I like that. Could I could I just throw something out really quick? Right? Paul, is it okay if I just throw out something really quick? Because, Josh, you’re like, I knew this was gonna happen. You spurred a thought, I’m like, oh. So maybe because you’re talking about kinda like those top three, four, five items, KPIs. Perfect. I love that. Here here are some examples of ones that we’ve kind of always leaned on. I I think one is we establish a revenue goal. I know that sounds obvious, but a lot of times we’re just growing to grow or we just think, well, wanna get bigger next year. When you establish a revenue goal, it forces you to identify what you’re gonna do to actually get that growth. Like, slows you down long enough to say, what it is it that I’m gonna affect differently in the business to actually generate that revenue? I would say GP, Josh, hundred percent. Right? That’s kind of the lifeblood. And then another couple to consider is closing rate or or depending the language you use. I got a call. Was I able to put that into production? And then if you’re full service, you should pay attention to your conversion. So if I’m the EMS responder, I secure the first portion of that relationship. How good am I then, you know, taking advantage of that exposure and turning it as into a much scope opportunity as possible, I e converting that, let’s say, to reconstruction or contents or whatever else that your team does. But I’ve just kinda found, like, if I’m looking at a revenue against a goal, if I’m monitoring my gross profit margin and I’m measuring how effectively I close the opportunities that come in the door, there’s a strong chance you’re failing forward as an organization. You may not have it all figured out, but you’re you’re rocking probably pretty good. You know what I mean? Yeah. That’s great. Thank you for bringing that down to earth for us. Very tangible. If I can jump in, this this is great. And I’m, like, itching here to talk about this as well because you guys are triggering a bunch of thoughts. But I look at it this way. When you get to that stage and I think we’re talking about three million, right, right now? Yep. Is that is that where we’re at? So yeah. So at three million dollars, what I find that the biggest challenge is and, Brandon, you just touched a little bit on this, is that most people end the year. So we finished twenty twenty five, and their immediate intent is to go, okay. We look at our year end. We run our p and l for last year, and we did, you know, three million bucks. We wanna grow by twenty percent. So whatever it is, three six, right, next year, or we wanna get to four point five or whatever it may be. And I think that’s great, but that’s normally where it stops, and that’s not good enough. Where we take it with clients and, again, my spin is always gonna be on business development, but where we take it with clients is take that four point five. And if you can now take your goal and start breaking it down write down to clients, so we our whole process revolves around the concept of predictability and being able to put a forecast on every single relationship, right, where we take every client that consistently gives us business. And if we can expect this client to call us six times, this one seven, this one nine, and we understand what our conversion rate is from leads to jobs and so on, all of this starts painting a picture. It’s no longer a pie in the sky. You actually have an understanding that your existing client base should be able to account for, you know, three of that four point four million dollar goal, which we we gotta go find another four. Now when we get into those KPIs, because what Josh said and and Brandon is is really important, you can’t have fifty things. I think the numb at that stage of the game at two million dollars, if you’re approaching that two million dollar mark, the most important thing you can do is surround yourself with people that you trust and and trust their opinion. That’s number one. Because doing this on your own may be okay at a million. It gets really tough when you get to three million and five and ten, and I think everybody that’s on this call can relate that it’s a lonely place. So surround yourself with people. Next, identify KPIs because you don’t wanna have fifty of them that touch and crossover across the various areas of your business. One of the ones that I like seeing clients do is number of jobs that we start every week. Because I think frequency and consistency and the cadence of looking at something in a in in our industry must go down to kinda weekly. Right? So I like a KPI that says, how many jobs we started? Why do I like this? Because it shines the light on what’s happening on the business development side, but it also shines a little bit on the operations. Right? Because you can’t start a job without somebody responding to it without getting a scope, without getting a work authorization signed. Right? So that becomes, like, a pretty decent KPI that obviously doesn’t touch on collections and cash conversion cycles and so on. There’s other KPIs there. And, again, I’m not suggesting everybody should run with how many jobs we started every week, but it’s a good one. And I think the exercise of sitting down and thinking, what could I measure that touches the different areas of the business and really shows us the pulse of things going well or not well? It’s really, really important. And going from that, hey. Yeah. We wanna grow by twenty percent. But taking that way into more detail, in our case, we do it right down to where we expect the work to come from from every relationship, not just how much from Greystar, but which property manager do we expect expect to call us and how many times in a year. Yeah. So before we move on to the next slide, I wanna ask you, Lukas, to elaborate on. You’ve now built your lead sources, for just really good run rate business. Now you’re in a cat situation and a five million dollar drop drops on your lap. How do you not Yeah. Kill the the years you spent building that lead source? Yeah. So this is a good exam. We in prep, we obviously talked about that that case. So I had a client can name the client, obviously, on the call, but had a client that had a pretty significant business development team, and we’ve worked really hard to solidify a lot of relationships where we’ve received maybe, you know, the first initial jobs. And this was back in twenty twenty three, I believe, was the last cap in December, Polar Vortex, whatever. And another contractor called this client and said, in my in your market, one of my clients has a massive loss, and, you know, it was a five million dollar water loss, I believe, and, they had a choice. They have the resources, but the cactus hit. And you can jump on that five million dollar water loss knowing that tomorrow, phone calls are gonna start rolling in from the people we’ve been selling to for the last, you know, year and developing relationships, right, and told them that we’re gonna be there for them. It’s rare, but you gotta know that these people that you’re developing relationships with, we need to take care of first no matter what’s happening. Right? And in this case, this client made that top choice. And let me tell you, it was the smartest thing ever to do that because, yeah, it would have been great to get a five million dollar loss, but you would have upset a lot of people, and the work that was done by the business development department in the last six, twelve months would have gotten affected by this. Yeah. Plan for the long run. Don’t operational excellence is not short term focused at all. Yeah. Well, it’s like winning any biz baseball game. Right? You don’t win them by just home runs. Right? Like, it’s all the singles and doubles. Right? Like, you gotta get consistent work. Companies that rely only on large loss or large losses what brings them over the profit line where they start making money, it’s a very dangerous place to be. And there’s many I mean, all of us on the call, I’m sure, know many companies that, you know, faced that. Right? And in the last two years, without any cats or major events, there’s a lot of companies that are struggling. Right? And it’s because the base business isn’t the focus, and it needs to be. It’s the base business that needs to make the company healthy. And if you wanna be doing all the other stuff on top of it, great, but that’s great. Right? Yeah. Real real quick, Paul. Before we thought that three million dollar range would be and this, Lukas, goes exactly what you said. I look at yes. We’re we’re talking when we’ve all three of us have talked about top line, but it’s also good to pay attention to that bottom line piece as well because I’ll stay at three million with a growth from seven percent to fifteen percent, and that’s still growth, and that should be celebrated. Yeah. And that and that avoids that avoids that trap that Lukas is in is because I’m, hey. I’m focused on paying attention over here and being more operationally efficient and increasing that. That that still is growth, and that prepares you to take that next step out of three million dollars and become that five million dollars or seven million dollar operator. Yeah. Growth can hurt you just as much Absolutely. As no business. Right? Like and I think a lot of people just want growth, growth, growth. They wanna be able to say that they’re doing twelve, fifteen million dollars in revenue, but sometimes it’s better to be a five million dollar company and Absolutely. Renting out twenty twenty two percent net. Right? Like, than, than be at fifteen and losing money. Right? Certainly makes cash flow a lot easier to to Absolutely. To maintain. Absolutely. And and you can put something away for a rainy day or a dry day in this industry. Right. Let’s move on to the execution. Day zero or day one, whatever you call that first point of of accessing the property, under scoping the job or missing hazards like asbestos, like, there’s no amount of educate or execution that can pull you back from those, deep holes that oftentimes for storage take themselves. How do you, Brandon, leverage the four p’s to try and make it simple for teams to think about what the right priorities are on the job and how not to create these deep holes that really can be tough for companies to dig out of. Yeah. I think, you know, as we were kinda chatting about this idea earlier, it’s this idea that that as our companies are growing, so as we’re moving from three to seven, seven to ten, whatever, the business starts to get more complicated. Our client base is getting more complicated, more moving parts, more file volume. And then probably in that that space too, like, and leaders are starting to breathe more fire into the we gotta be more x. We gotta do this. We need to be more oriented around these systems and these processes. And one of the things that we’ve just found over time is one of the ways that we can begin to create independence in our people’s ability to think live on their feet is we have to create confidence. And that confidence is hard, especially as we’re onboarding new people. You know, the business, again, is scaling, growing in complexity. That confidence has to come from that they understand that if you were gonna prioritize a decision, that their decision making is going to align with that so that they can be free in that decision and not come back and get in trouble, right, whatever the case may be. So we we established this idea of of the four p’s. And it’s just like it’s a way to simplify something so the team can assimilate it and memorize it. Protect the referral source, protect the client, protect our brand and reputation, and finally, protect the profit. And the idea is is that when we talk about this as a team, it requires us doing all to really take care of any one of those items. Right? Like, a referral source really just wants to know we’re taking great care of the client. And if we take great care of the client, there’s a chance we’re creating a lot of profit on the backside. But every once in a while, we get placed into a position on a particular job in a particular moment where I need my team to make the same prioritization in their decision making as I would. And so I want the team to understand that we’re gonna prioritize relationship over profit in that moment, at that one job, right, in that scenario. And so this idea of presenting the four p’s, teaching it, preaching it, and grading integrating that into our cadence of activity, it allows them the freedom to make those decisions in the moment independently and confidently, and then we get the win because they’re making the similar decision that we would. Yeah. And, Brandon, I know you, and Steve put a lot of emphasis on training your team on on being educated restorers so you’re not winging it. You know, these four p’s guide an education that you’re constantly reinforcing. Josh, one of the challenges in the industry is oftentimes a restorer starts out as a single proprietor, hires a couple people on, and we all have bad habits. And they don’t take the time to get rid of those bad habits by getting trained by somebody like yourself to how they implement good operational processes. And then you get this downward slide of bad habit after bad habit as you hire more people. How do you avoid that or overcome that, and what are you coaching, companies to do? Yeah. Paul, I appreciate the question, and and I think I’d actually go back and piggyback a little bit. We we’ve never defined it as the four p’s, but, Brandon, just a yes, no question to you real quick. Are those four p’s in order? Is there a hierarchy of those four p’s? Right? Yeah. Exactly. Exactly. Right? Because you notice and and, Paul, this speaks to your question. Profit is at the end of these four p’s. Right? And that actually goes back to those good habits and those processes that you can put in place at the beginning that then trickle down and lead to profit. So I think I think I’d actually kinda answer it from that perspective, Paul. It’s it’s really just setting that stuff up, and and the beginning of Brandon’s four p’s is kinda defining the why of what you’re doing what you’re doing. And and that why helps inform a decision that needs to be made that needs to be made in the field. So rather than force people to say, hey. Listen. I need you to go into your software and take a picture of a photo when you walk off a job. That sounds great, and I could probably, by brute force, hold some people accountable to that, by beating them up. But I’d rather have them a definition of why we need that. And then they’re they’re coming alongside me in making a good decision because it leads to kind of the directive of the company. We we define it very similarly to what Brandon does into mission, vision, core values, those kinds of things. I know those sound like buzzwords, but, really, what they do is they define the funnel with which every one of our activities in our company needs to kinda go through. Yeah. And it’s very similar kind of structure to what Brandon’s talking about there and and really kind of helps, help somebody in the field at whatever level they’re operating to make the right decisions is gonna be in line with where we’re going as a company. Yeah. If I’m looking at this, I’ll use to you. Yeah. Let let let me put a nuance here for you because I know we’ve talked about this years ago about you need to have operational processes established and trained so that everybody’s doing it the same way with a high degree of consistency. So sort of add that into the comment that Josh and Brandon made. Because I I hear well well, my one PM does it this way. My other does it this way. I’m a one sale guy, and now you’ve got nothing to really manage and and drive. Yeah. I look at it this way, and we’re talking about seven million and up. And this is, the sweet spot in my opinion at the for restoration contractors that are just above that five million between five and ten million dollars. I think you’d be doing yourself a lot of benefit if you stop for a second and recognize that the more narrow you make your focus at that stage. Because at the beginning, when you’re starting your business and you’re growing, you pretty much wanna take any jobs and everything because you need to pay bills and the you don’t want people sitting around and doing nothing and, of course, you wanna get busier. Right? But when you’re at that seven million dollar mark, the more you can narrow your focus and what I mean by that is the more you can narrow your focus on who your client is, what work you want, what work you don’t want, the simpler and easier it becomes to come up with your SOPs, training. Right? Because at that seven million dollar mark, turning your company into the McDonald’s model is kind of the key, right, to be able to actually replicate easily because the people that are out there that are responding and doing these things are not coming with the same level of passion. If anybody here thinks that we’re gonna be hiring people, and they’re gonna be as passionate about everything as the owner was at the time when they were a million bucks, it ain’t gonna happen. It’s very rare. Right? And, I mean, you can you should be trying to get there. But if that’s what you rely or building on the company on and hope that that’s what you’re gonna do, it may take a very, very long time. So it’s easier to narrow your focus. And the example that I can use is when you know, I had a client on the West Coast that hasn’t done a residential job in over twenty years. They were a very large company, strictly commercial. And as a result, they didn’t actually spend a lot of time in our industry at the various trade shows that we all see each other at because they were very focused on commercial clients, specific work. They knew exactly who they are, and they knew how they do that work, and they were better than most at that those jobs. But they didn’t realize how powerful that was from a sales standpoint. As a business development rep, when you can get in front of a client and go, we don’t do anything else other than you being our client. The carrier is not our client. You are. We don’t do residential work. Even if your house is burning down, that’s not our work. Go somewhere else. Right? Like, we do commercial. Right? So the more you narrow your focus, the simpler it becomes to develop the processes that you can replicate. And the less decisions we need to make when you’re doing the job and the clearer is the path, the more success you’re gonna have. It’s simple. And seven million is literally the precise mark where where I think every company should be going. How do we define our client to be even more narrow and say no to more people? Like, that literally should be what we should be doing. We did this at Luxor, Paul, in the in you know, back when I owned Luxor, we weren’t the restoration comp this specific company. Right? We were providing CRM services to everybody. We had mortgage companies. We had airlines. We had everybody. We were competing with Salesforce dot com. And the second we narrowed in on restoration and I sold off the other divisions and got rid of everything else, then we could we were able to provide even more value to that client because the focus was on that client. Imagine if you do that specifically in our industry as well. Scary Yeah. But necessary. Yeah. No. Technology. So, Brandon, I’ll go to you. Driving that execution, layer, how important is technology to get you there and continue to maintain that consistency of execution? It’s it’s massive. And and, you know, one of the things that I’ve kinda personally made a commitment to is just being honest about where I’m winning and where I’m losing in these particular battles. And and I would just say that it’s easy mentally for me to be committed to the fact that these tools and resources are absolutely critical for success. And I also recognize just how difficult it can be to get your teams to fully buy in to the value of of what you’re presenting. And even as leaders and operators, like, it’s so difficult to not get swept up in the emotion of the things happening around us that we forget to continue to invest time and energy in developing these critical backbone systems. And we’re no different. Like, FP’s in this battle every day just like everybody else. But to answer your question specifically, the the faster your organization can get into a position where you’re talking about tomorrow, the next day, the week after, the closer you are to winning. And so the reality of it is is that technology, the the backbone that we use to guide the client process and communicate to our differing teams what’s happening in that client experience, the better equipped we are to look out on the future and make those decisions today versus having to make one and react at one as it’s hitting us in the face. You know? So it doesn’t matter. Like, whatever system you choose I mean, we obviously, as a team, leverage the the living heck out of �Թϲ�����. It is a a primary resource that we use every day. It synthesizes the chaos. It takes some of the the reaction out of things and starts to tell a story. Where are we winning? Where are we losing? Where are the holes? Where are the opportunities to shore things up? And then what does this mean about, tomorrow? So, again, easy to say, difficult to live out. You know? I agree. I’m in technology, and, I live and breathe it every day, and it’s tough. It it is. And it’s ever changing. Josh, how do you guide your clients from that perspective? Yeah. I think I think I’ll go back to what Lukas said right at the beginning of the call. He said that data was paramount so that we can make decisions. Right? I I’ve gotta get that good data. And for if we’re gonna start to scale as a business up from the million to three to seven, I I just don’t see any way that we can’t leverage technology and leverage new technologies. Right? It’s kinda like you always have to have your feelers out to see what’s going on. Paul, you could you could release the greatest new feature. And if I don’t knew know about it and adopt it and investigate it and see how it can work, it makes no difference to what my company can be doing and the decisions going back to what Brandon says of, you know, making those decisions water in the moment. I think technology allows us the opportunity to be proactively reactive. Right? Which kinda sounds kinda cultural, but or, counterintuitive, but it is you know, it gives us the opportunity to make that decision right there in the space that it’s happening and influence the outcome before the opportunity is gone. Yeah. Yeah. Absolutely. Paul, didn’t you what? Sorry. Go ahead. Go ahead. No. Go ahead. I was gonna say that an AI is helping. So AI doesn’t take away the need for these data collection and finance systems. It’s an adject on top of it to take away some of the administrative burden. But if you don’t have these systems in place well utilized, then AI is not gonna be a benefit. And, again, you’re gonna be further behind the eight ball on, you know, competitive, situations. You know, operational excellence means you’re collecting the right data, but in insurance, AI can’t make stuff up. It’s gotta have the action you know, auditable, actionable data behind it to substantiate. Yeah. Paul, you and I have had this discussion, I believe it was you that always said you can’t take somebody that’s, you know, tactical and swings a hammer and and so on and give them a freaking pile of technology to become better. And I think it’s a similar challenge. You know, I watch sometimes companies make decisions buying technology on its functionality. Right? It’s the most common thing where if you go to a large organization, they’re like, we’re looking for a CRM. They put together a, you know, spec of what the features and functionality they want, and the IT department manages that. There’s a lot of technology that can do everything you’ll ask for. That does not mean it’s the right technology for you. Because Yeah. What I’m finding is and, obviously, from a CRM perspective, from business development perspective is that just because the software can answer all the questions and do it all, doesn’t mean that the user is actually gonna go and access that information and find it. Right? The success happens when you, again, narrow the focus, right, even within the technology. Get them to live in a very small piece of the software that is repeatable, and it becomes part of their DNA. I think people underestimate this. Like, when we manage business development reps and we have a CRM system that that we’re utilizing and, you know, there’s number of systems that you could be using, yeah, of course, they can run fifty reports to figure out how to prioritize their day. But if every single rep was able to do this, then there’d be no issue having five million dollar reps. We do it for them. We actually go through the noise, and we say, focus here. Here’s all the noise. We already assessed it and looked at it because that’s our expertise. You can trust that if you go and focus on these three things this week, you’re doing the right things. Yep. Right? And it’s a key within technology, I think. Hey. Hey, Paul. Can I just throw one more thing at this? Is that okay? Yeah. Go go ahead. I was just thinking about it. It’s like, as as you were talking, Lukas, I’m thinking in my mind, like, how many times I’ve onboarded a software solution or suite, and I’m doing it in the midst of chaos. Right? Running the Yeah. Running the business. And I’m like, that’s gonna be a great idea. That’s gonna make so much you know, our business so much better. And we throw it out. We we get the team all hyped up about it, and we’re like, k. We’re now whatever x y z software users. And then I I realize how often teams onboard software solutions and never actually get any of it to be operating to its full capacity. And then you almost end up growing more frustrated with the false attempt at adopting the software solution. So and again, it’s like your comment. Right? Look, it’s like, at least get one part working the right way. Just do one thing and do it right. Just do one thing. Yeah. I think my encouragement is is that and and I’m again, we you know, this is lived experience as it as much now currently as it was back in the day is owners and key leaders have to care enough about that software adoption that they hang in the trench long enough that the team actually works through the full onboarding process to the point where behavior has changed. And I think, Lukas, just to affirm what you said, it’s difficult to do that with the entire solution. So even if, you know, in a quarter, you say, we’re gonna be monster at this one feature inside this software solution, that’s a win in strategy versus, yeah, we’re gonna adopt tech because it’s just very different. And on top of that, if you make a selection and let’s and let’s just you know, let me put this out there. I remember, you know, I know a number of companies that were making decisions on buying job management software, and the decision hung on the fact that they wanted to be able to do job costing, but also purchase orders and and all that other stuff. Yet they didn’t have the discipline to take every single call that came into them and make sure that it was created as a potential job. And if it didn’t turn into a job, lose it in a sufficient amount of time, not wait two years to clean up that data. Right? Like, you’re trying to drive here, yet you’re not doing the thing that is the most basic. So I would always say to people, like, select what you’re gonna do just like you just said, Brandon. Right? This quarter, we’re gonna focus on making sure that this becomes part of our DNA. And at the end of it, if you’ve achieved it, all you gotta do is put in the right checks and balances that monitor that whatever we’ve been doing for a quarter continues to happen. And if it goes off the rails, we need alarm bells. Somebody needs to be checking it, whether it’s the software itself or an individual or a human being. Right? Then you move on to the next piece. It’s not easy. I know everybody thinks it is that we’re gonna buy software that just does everything, and that’s gonna be great. But exactly what you said, Brandon, happens. Ninety nine percent of the time, it fails. Maybe not ninety nine, but call it ninety percent of the time, it fails, and it’s utilized for the most basic one thing that you could have gotten away with using something else. Right? Yes. And you’re not getting any of the value. Yeah. You’re not getting any of the value. So and, Paul, you nailed it because you’ve always focused on that usability and the the the person that is actually interacting with that application and that being the focus, not just the overall feature functionality. Oh, yeah. So it’s too many times a a a technology platform is decided on by the administrative folks saying, want this data, but they don’t realize they can’t actually get the data into the system because it’s too hard to use in the field. So yeah. It it it’s a it really has to be a prioritized list of what is most important, and then is it usable where I make and lose money, which is for restores in the field? Got a question here that, I think maybe Brandon, just a quick answer on. When scaling, do you hire the resources before the sales come in, or do you focus on building the sales funnel and then hire the people to do the work as it comes in? I’m gonna give you the answer I wanna say, and then I’m gonna tell you what reality feels like. Correct. This is a world that we’re engaged in as we speak. It is a you want to pre spend because you wanna leverage the talent to get you where you’re trying to go. And yet reality says that cash can give you a much different decision making factor. And and so I think it is a combination of both, unfortunately. And so, like, you know, when when you consider something like this, it’s can you assess the staff that’s with you right now and identify what would it take to get some lift out of their capacity and capability. And you’re likely gonna have to invest in that first to create some growth in your revenue or your profitability that then you can reinvest towards hiring those those additional players or maybe those skill sets that the team doesn’t currently have in the roster. What I wanna do though is go pre spend for all the talents to make my job easier. But it’s hard. It that that balancing act is hard. And as our team, you know, we you know, I can walk into an executive meeting and be like, we were gonna hire our way through it. And then Steve has to give me a reality check of, hey, boss. That’s gonna take some cash, so we need to rethink that. You know what I mean? So it’s a balancing act, I think. Yep. As a tech company, we make the same trade offs. Go ahead, John. I was gonna say that I just add on real quick. I I think that the journey from scalability for a company, we tend to think of it linearly, and it’s not. Right? It has its ebbs and flows. And so what I wanna look at is if I’m gonna invest in infrastructure to build it so I can support the sales that Lukas is gonna go make, you know, make it random for me, then I’m going to can I plan a dip in in my, like, net revenue and my expense? Can I can I be purposeful and intentional about that that spot there where I can invest in bringing on more talent so I’ll be ready for the new opportunities when I hit the door? I think that’s the thing we talk about, and that goes right back to having good data. If I don’t have that good data, I can’t make those key decisions and say, back to Brandon’s point, now is the time to bring on this person. Because because, you know, Steve’s gonna ask me that question. Right, Brandon? He’s gonna say, okay. Show me what’s in it for me. Right? Yep. And it’s gotta be in that same numbers. So Yep. That’s right. It’s good. And, Josh, you you for sure have those numbers because I kinda disconnected from them for a while. But, you know, we have a probably pretty basic understanding of how much we expect an estimator to be able to write. And if we’ve got somebody that does write and run, what can they run, right, and so on. I think the general rule of thumb that gives you a rapid growth that manages those ebbs and flows revolves around building your operations for eighty percent capacity with the ability to extend that to hundred fifteen, Okay? And then aligning your business development strategy to provide an expectation that says we need to generate x amount of business while putting thirty percent of our focus in business development or opportunities that are gonna generate something in twelve months. Right? And then as you start moving closer to hundred percent capacity, you start replenishing resources on the operations knowing that there is a lag of about four months. Brandon, is that the right thing? Four months lag, right, to to educate your resources that you’re bringing on and make them capable to go out in the field and perform with with this McDonald’s style repeatable process. Right? And then you start expanding your business development resources. I think that generally will result in about a a you know, at that seven million, it’ll generate generally result in about a thirty to fifty percent growth if you can execute exactly that. But in order to do that, you gotta be able to look at your team and say, this team can produce eighty percent capacity this much work in this narrow sector of our clients. You can do that, then you can start building your business development right along the side of that. Yeah. And another thing up on what you said earlier. Be brave enough to say no to that five million dollars. Yeah. Right? Yeah. Yeah. Exactly. You you know, two things two two other things to kinda add to this sorry, guys. We’re all, like, super passionate. It’s like, I gotta say something. You know, two things to maybe consider with this too is the strategy in in terms of what you’re deploying for that BD development or that that that growth is, I think, the BD side, and Lukas can speak to this, and is that I think you have to help them identify the longer sale targets. The the legacy stuff, it’s probably gonna be the things that have the biggest impact on their portfolio. But there are short and midterm targets, folks that have a faster sales cycle. And I think if you talk to your BDs about a percent of time spend, there’s that opportunity to not just hang in the pocket for six to nine months while they get that first rep. I think another thing to consider, and we talked about this really early on, was closing rates. Like, a team can gain a whole lot of growth by just getting better and spending more time and energy ensuring that frontline staff secure the opportunity that comes in the door. So if a mitigation company is closing fifty percent of the opportunities, if I just added ten percent growth in that and I was you know, or or another ten percent, it’s like, holy cow. Like, I’m really moving the needle profitability wise too because my overhead didn’t necessarily have to expand for that. And so it’s I think there are these levers that can you can start to pull on first before you’re fully invested in this long burn BDR strategy because you need it. But, man, it’s a scary investment. It does take time. Like, even Lukas’ teams, it takes time. These are relationships. You know? So that’s just one way we kinda try to think of that and balance that as well. Like that. He’s not doing well. Go ahead, Paul. We gotta move on to the next point too because we’re we’re we’re cranking through time here. But I think this leads really nicely into the human element because at the end of the day, you know, this is a people driven industry where communication, compassion are incredibly important. So you could close more, opportunities that are coming in the door by being able to communicate with a client more clearly, more expeditiously, and more accurately. Right? There’s a whole bunch of things you can improve, so I’m really glad you brought that up, Brandon. So but, you know, the restorers are all hard. They’re heroes going out there, you know, rushing to go and help the customer. How do they think more about how that human element, that empathy, and your operational excellence impact things like close ratios, longer term winning more business, reduced, reductions on invoices, less friction with the policyholder that gives you a bad review that impacts your ability to close more business. Talk to me about that. Are you hitting Who’s the question for? Josh, I’m gonna throw that to you. Alright. I’ll I’ll I’ll start. Paul, I think the key and and I’ll kinda grab all of that and kinda bring it into one thing. I think as as we get into this and and I think you’re right in identifying that as Restores as a group, we’re we’re very sympathetic at the beginning, then we change that to empathy as we mature and grow. And I think what really kind of kind of solidifies it and puts that is the word that you used called compassion, Paul. And I and I really think that, personally, from Josh’s perspective, the the definition of compassion is taking that sympathy and and pairing it with action, which then sounds like operations. Right? When I take sympathy and I do something with that sympathy, that becomes compassion. And that gives me stickiness across the board with my internal customers, my own people that I’m working with, and and my referral sources and the adjuster the homeowner and continues on down the line. I I really think it’s really saying that we need to take, yes, our sympathy and not just say, I I recognize what you’re going through, and I can sympathize with that, but I’m gonna pair that with some action. Here’s what it looks like. And, and that’s what drives those those results that we’re looking for. Good. Yeah. And, Brandon, how do you keep that, you know, front and center with your, teams? Man. So one of the things that we’re leaning into this year is this idea that it’s how we make them feel in the process that matters. And I think the value in us creating a theme that we’re aligning around is that it begins to help us understand then, well, what do we have to do in action to make that thing true? And so, like, we I alluded to this earlier, these time frames. Like, if we’re honest about the the lame part about being experience as a homeowner or property owner is you are often facing time frames and timetables that are nothing like a retail construction environment, as an example. It’s like there’s these long delays and people don’t really understand why. And so anyways, by by us establishing like a theme, like, know we have to show up and act in such a way to to separate ourselves from the others by the way that the client feels when they’re doing business with us. And then we try to identify, well, what are those actions? What are the things that if we do these things consistently, we do them within standard, and we do them across the organization, that we are likely creating a better client experience than otherwise we would have. And so, again, time frames, commitments, and communication cadence, like establishing a daily update on commercial projects or every forty eight hours or every day on residential projects. And then I think just maybe an added layer to this is, is there anything that we can do with our software solutions and our toolkit to automate or do something to ensure that that does happen every time? Because it’s most of us as organizations have established a standard. We just often have a major gap between what we want to be happening and what’s actually happening consistently. So I think that’s kinda where my head sits on on some of this. And when when this is done properly, Lukas, what’s the impact on your business development? Because there’s a direct correlation to business development here. Yeah. I mean, it’s huge. Right? And I don’t know if I have a number of like, you if you’re doing it right, the the growth is x percent. Right? But I think we can all agree that if you’re taking care of the client and empathy is applied in every part of the interaction, then you it increases communication, increases stickiness with the client. I think our challenge in that situation is that when you’ve got an estimate or somebody that responds to a loss, right, and imagine this is an insurance job, there’s a bit of confusion because the client there’s there’s really three clients there. Right? There’s the person that referred the job that they influenced, and there’s this a job there that they need to approve the the estimate or whatever it may be. And then there’s this homeowner. Right? So that alone creates significant amount of confusion for the person that’s arriving on-site. Right? So we’re starting to at Sentum, we’re starting to work on developing some stuff specifically for people on the production side that are basically responding to losses and and increasing conversion from those leads to actual jobs and precisely focusing on increasing conversion from mitigation to reconstruction. Right? You’re gonna hear a lot more about that in twenty twenty six from us. But you gotta ask yourself, what’s the simpler place to do this? Right? And for our audience here, just to throw everybody a bit of a softball here, imagine if you train every one of your responders, every one of your estimators to interact with a homeowner or with the customer and begin that interaction by saying, what are you the most afraid of about this project? What is your biggest fear when it comes to this? If you just open up with that one question, you will learn not only what they’re worried about, and they may turn around. I’m like, I’m worried that this is gonna take seven weeks, that we’re gonna say that it’s gonna be two, but it’s actually gonna take two months. If you know that that’s what’s gonna happen, put your emphasis around that and put out that fire. Put out that and make sure that we’re communicating around this. It’s not again, it’s not easy. Yes. You can teach everybody to ask that question, but now let’s imagine what happens. Now you have an answer. What do we do with that? Who gets involved? How much will they pay attention? Every one of those things is easy on the surface. Implementing and working around them and creating processes is is very hard. But, again, thoughtful for our audience here, teach your people to just begin that interaction with that one question, and that alone will make a massive impact. That’s a good I love that. And why do you think this can might be an advantage, for, you know, companies that are three million or under versus the large guys over twenty five million, national brands? Why why do you think this is an advantage to grow? Is that for me? Yeah. Let me start with you. Yeah. Why why it’s an why it’s an advantage, to be able to implement some of those things for the growth? Yeah. Basically, really leverage empathy to differentiate your you know, the product you deliver, and how could that really establish your brand in the market to set you up for growth? Yeah. I think, I mean, first of all, anytime you increase communication and you take care of the client, that alone will, you know, multiply in space, in your business. Right? And I think the hardest thing to do is to get people to not be numb to what we’ve been doing for a long time. Right? Because if we’re responding to mitigation work for the last five years and we’ve seen every possible flood, we’re forgetting that the people that were walking into their house are people that have never had this happen. They have no idea what the hell is gonna happen next. To them, it’s a massive panic. Right? And if you’re somebody that’s dealing with this on ongoing basis, you ultimately become numb to it. And that’s why that question that I suggested is so impactful because it reminds the person that responds, holy shit. They’re concerned about this. Excuse my language. Yeah. Language. Yeah. They’re concerned about this, and it reminds them to put themselves in those shoes. Don’t know if I answered your question. Yeah. Yeah. So so let me throw this out a different way too, and that is you’ve got a PM tech, somebody who’s just terrible. Customers do not like dealing with this person, but they’re an outstanding restorer. Like, knowledgeable, but they’re terrible at customer service. What do you do? Brandon, I’ll throw that to you. Well, I think there has to be some sense of reminding the team how how we how we get what we get. Like, there’s this element of we have to re earn every opportunity, and we have to continue to be gritty. Right? And so one of the things I think that companies in these hopefully, I’m on point here, Paul. But one of the I I think the things that companies in these these smaller growth phases are, the three to sevens, is remember that that scrappiness is what separates you from from those of us that have started to grow the business, and we’re starting to think about the industry the way Lukas talked about. Like, when you’re when you’re a company that does two thousand claims a year, you begin to lose that sense of you have to earn the next opportunity. Like, there there is no work just falling out of the sky, and and that gets harder as you get bigger. So I I I think I’m not sure if I’m still on point, but I would just say I think you need to constantly remind the team. I mean, we literally are sending out, you know, emails out to our team this morning. Like, hey, guys. Like, here’s the reality of our situation. Let’s all be reminded this is a team sport. Like, we’re all engaged and we’re all trying to earn the next opportunity. And so I think if you don’t feed that into the system on a consistent enough basis, inevitably, regardless of your size, you’re gonna grow accustomed to your current workload and you’re gonna become expectant versus having the attitude that we have to show up every day and try to earn another opportunity. Yeah. What is this gonna be You have to establish the yep. The company here. Sorry. We’re there may be a delay. Sorry about that. Yeah. Yeah. I’ll throw this over to you, Lukas, in a second. But company culture is what I’m hearing, Brandon, has to be firmly established, and that empathy layer has to be built right in. And I’m talking about if there’s an outlier on there, how long do you put up with that? And from my my opinion as an a business owner, I can’t put up with it because it dilutes my culture, and my culture is everything. Go on, Lukas. No. If you don’t mind, Lukas, I’m a cut you off real quick. I I I think you got it. What I would say was that you need to define product. Right? Is the product a dry building, or is the product a great experience? And if the product is a great experience, then that guy is almost naturally selected out because the product’s not a dry building. Right? And so I think that really becomes that focus. And I think that Lukas will segue nicely to you on creating an experience because, Lukas, you can sell an experience. Hard to sell a dry building. That that’s exactly right. And it’s it’s gonna be hard to hear for a lot of people, but you may have somebody that’s exceptional, like you said, Paul, at, you know, doing the work, but terrible at customer service. And if your McDonald’s process in your business requires the person doing the work to interact with the client, then you have got to let that person go. They can’t be on your team. If your process or where you’re taking the company allows, to take that individual into a role that allows them to do their job without the interaction with the client, so be it. But building processes specifically because you have one individual that’s doing something really well is a terrible recipe for trying to grow. Because then you end up with just making accommodations for all kinds of people. Great. And that’s what I was getting at. You lose consistency. You make accommodations, and your culture takes a huge hit. And that’s just you’re you’re not going to run a highly repeatable profitable business that can, work through the the the cyclical nature. We see this in sales all the time. Right? We we get involved with a client, and they may have a team of, let’s say, two, three people. They have no processes. They have one BD that’s producing three million, four million, whatever. Right? And now we’re coming in, and we’re trying to get the team from being three people to being, you know, ten or grow the business to thirty, forty million bucks. Right? And, like, the owner’s terrified of letting this person that’s producing three million dollars be held accountable to this new process. And this person’s going, I’m producing three million. I’m not putting up with this. And we’re very quickly get faced with this idea. Like, you hired us. You wanna roll this out. Do you want this person to not be accountable and become the example that if they just complain long enough, they won’t have to comply? Like, it’s it’s a tough situation, but it happens all the time. And if you really wanna grow, get people on your train or get them off. And so we’ve got a really tough question here, which was how do you handle maintaining that culture when it’s tough to hire an a tough hiring environment for mitigation tax? No such thing as tough environment for mitigation tax. I mean, at the end of the day, it’s like real estate market. Right? You can have a shitty new real estate market and the price is right, you will find that you’ll create the market. Right? It’s the same thing. And I know maybe I’m being too general, but, like, I know it can be tough to hire right people. But at the end of the day, if you have the right culture and your compensation’s right, you can create the market to bring in the right people. Yeah. How valuable, Brandon, are the right people? Are you willing to pay up for the right people? Yeah. I and, again, full transparency. Right? Yes. One hundred percent. And let’s be honest. It’s really freaking scary to take on an untested asset at twenty, thirty percent more than what you mentally anticipated for. Yep. So Yep. It’s like, yes. And I think many of us have been presold, right, on somebody that’s just very good at selling themselves, and then you suffer the consequence of that. And so I I guess that maybe the the longer form answer is yes, absolutely, and do the best you can to create an interview process that allows you to actually vet what it is that they’ve said they’ve achieved or done from a performance perspective. And I know in a lot of cases, like, people can’t get a report, right, from the the p and l, from the location they were leading or managing or whatever. But I think there is a way to ask questions and get people in a in a place where they can’t fumble their way through it. They’ve gotta give you something that’s true, critical, and tactical that lets you know whether or not this individual can actually do what they’re saying. So I think if you can mirror those two things, then and, yes, pre investing in somebody and paying up is worth it. You know, I I heard something interesting. My banker one of my banker relationships was talking about where these kind of current wages are sitting and and how we got here, kind of on the back of what happened with COVID and things. And so An opportunity for all of us to be considering is, according to him, in the next probably year and a half, we’re gonna start seeing some writing of current compensation, and we’re gonna start to see some of those pay windows to come down a little bit. Because if you look kind of across the industry, regardless of where you’re at in the production process or the role you have, almost every role is is is having to be paid significantly higher than it ever has. And some of it may not actually be real. Like, it there is a chance that some of those will draw back down potentially over the next couple years. Not sure. I just added that for fun, Paul. That’s perfect. Now let’s flip it and go, we’ve got a problem client, but we’ve got a great rep. And you’re dealing in cat situations. What do you do? And and how do you tell sooner rather than later this is gonna be a problem client that’s gonna just rip my team to shreds every day? Josh, you wanna you wanna stab that? I know you’ve had lots of experience at JC in in probably consulting with contractors dealing with it. Yeah. Paul, that can that could be extremely tough because I have to look, you know, my partner like Lukas in the face and have to say you’ve been working on this relationship for a long time, and look what you brought me. Right? And so that can be a very delicate conversation, but I think it goes back I’m I’m glad this fits Paul into the human side because if I haven’t talked to Lukas and his team in six months and then suddenly this pops and I start to engage in a relationship with the people selling me, Well, that can be really difficult. So I like to find rhythms around, hey. Am I meeting with Lukas and his business development team on regular intervals so that he is selling what I’m producing and I’m producing what he’s selling? I think that relationship is crazy important, and that helps us mutually identify because maybe you can I can really lean on him and go back, hey? You know what? I know you’ve been selling this relationship for a long time, but this person’s terrible. Can you help here? And I can I can we can go as a unified front and present, you know, hey? We’re both coming at this from the same place. We want your building drive. We want this relationship intact. And so I think I would I think I would lean on that and try to take a more holistic approach to that than basically saying, hey. I’m gonna kick this to the curb. But at the same time, you know, when I did leave JC Paul, the last thing I erased off my whiteboard on my board in my office was the best job I ever took was the one I said no to. I still think there is some of that that’s the truth. And we have we have to recognize when that happens. Absolutely. Know. Sure you guys at FP have come across that. Yeah. We we just went through a cycle of reviewing some stuff that had been hanging in in the system for a long time, and and it was pretty easy to identify several layers there where we probably should not work with them again. And we probably had a pretty good idea we shouldn’t have gotten started on that one in the first place. And so it does take from time to time, you do gotta remind yourself by doing some after action reviews on what it is that’s stuck in your pipeline at some interval. You know? Yeah. And defining upfront what an ideal customer is and what an ideal customer’s actions are, like pay the deposit upfront, all of these things. If they’re agreeing at every step of the way, you know you probably got a client that’s gonna work with you. But if they’re fighting you at step one, you’ve gotta ask some really hard questions. And I find that when contractors get fought at step one, they kinda take it on the chin and keep moving forward, and they always regret it afterward Instead of countering it right up front and saying, hey. Do you want me to do this job? Here are my terms and conditions. Do you accept them or not? And if you do, well, here’s the way it’s gonna go forward. If you disagree, then go find another contractor. Yeah. To to piggyback on what Josh was saying, you know, it it all begins on the sales side. Right? Just like we can get complacent and numb to how the how we’re seeing the water loss and the homeowner seeing it for the first time, the same thing goes with the clients, let’s say, the commercial side. We may think they all expect the job to go a certain way. Salesperson, the business development’s responsibility to explain is to explain to the client right up front before the first referral even comes in. Here’s how it’s gonna happen. These are our expectations. This is the process. Here’s how it’s gonna work. This is what’s gonna happen. Right? It’s critical that you do that. So it all points back to communication. If you increase communication both on the sales front and then when you arrive on the job side, you’re automatically degree decreasing the amount of issues. To piggyback on what Brandon was talking about previously, and we talked about, you know, how how do we kind of improve hiring the right person and so on just to throw another kind of softball for people, on the call. We teach in our academy, and we implement with our clients a methodology called WHO, WHO the a method of hiring, which is written by Randy Streets and Brad’s and Jeff Smart. It’s a phenomenal process that will automatically, if implemented correctly, help you weed out the people that may not be the right hires. And while Brendan’s right, solving it right up front on the interview process and, you know, doing things like reference checks and and so on is really important. The even more important part is if you’ve already made a decision to hire somebody, if you haven’t laid out a plan that has Oh, yeah. Actionable and tangible things to monitor thirty days after they’ve been hired, sixty, ninety that validate that you’ve made the right decision, what you ended up doing is probably meeting with somebody in your boardroom that you brought in to hire as an estimator, but they also have the capabilities of running your social media department, so you hire them. And now they do both things but really crappy. And more importantly, you’re so busy that they’ve now been there a year and a half, and they’re not even a c player, and you haven’t really solved anything. You’ve just paid a lot of money, and your opportunity cost on growth is out the window. Right? So hire correctly and have a way to measure. I’ve made the right decision. Thirty, sixty, ninety days, that’s the tangible and actionable ways to confirm this was the right hire. Yeah. And that takes effort. And a lot of guys go, I don’t have time, but you will spend more time if you get that wrong, far more time Oh, yeah. Than if you do it. Higher than a million bucks. Million bucks is a long hire. Yep. Okay. We’ve got thirteen minutes left, and I wanna get to the operational road map. And so we’re talking about, you know, real tangible things. So at the start up phase, from an operational perspective and I’ll ask each of you quickly, what is what is the bare bare level? What must you do? You know, whether it’s, you know, three to five KPIs, what are those? So what are the most important things from an operational perspective at the start up, Brandon? Oh, I just think how do we show up and do that job and then do it the exact same way next time? So I’d, you know, call it a workflow, call it an SOP, whatever it is. That that thing that you do most often, it’s the it’s the, you know, the basis of your current revenue. Let’s just get really good at teaching somebody how to do that thing every time. Which requires documentation, review, and teaching and reinforcement. Yep. Josh? Yeah. I was gonna say Paul, you basically said it. I was gonna say develop that system early, right, as a start up, whatever that system is. I don’t care if the system is a whiteboard or is a spreadsheet or something more sophisticated. It’s still a system. Develop the system. It’s kind of a it’s kind of a walk or a crawl and walk and run, but I have to get that system in place. Have to know what works because that’s the only way I’m gonna figure out what Brandon’s talking about is working or not. Yep. And, Lukas, on the sales side, what do you think? Yeah. I think so second that system, and the most important part is capture every lead you’ve gotten into that system and make sure every lead you’ve gotten, if it was influenced by somebody, so somebody actually influenced it going to you, capture who it was. Even if you don’t do anything else with that, If you do that, which takes twenty seconds extra when you’re creating that job, when you’re ready to grow, you’ll have Yeah. Pull of things that you can do this and you’re not starting to push a train, the momentum’s there already. Yeah. Exactly. And I’ll add a third one, and that is understanding the ideal customer that you know you can serve consistently and beat everybody else in your market at. And then understand where can I get those leads from and focus my effort there because my customer feedback if I’m doing those jobs better than anybody else, I can promote that on social media? I can sell that to whoever I I need to get leads from. But you have you can’t just broadly shoot across a a a bought broad market, perspective because you’re it’s just that chance. You need to define a group that you can go and attack. So proactive versus reactive. Let’s look at, basically, the one to seven. Pretty broad range. Your overhead costs are screaming up into the right. Your profit margins might be decreasing because you’re trying to build and establish those processes. What are the most important things that you must have in place at this point as you’re as you’re scaling if you don’t wanna hit a brick wall? I’ll throw that over to you, Brandon. I think the headspace I’m in right now is is automations in administrative process. Like, in in in this is I’m not being negative on any role inside our organization. Right? But it’s just like cogs, you know, are are just this beautiful thing that you know are gonna increase and decrease because we’re out producing live work. And anything that sits more in that indirect costs or in our g and a where it’s just it’s like we’re bleeding on that regardless of what’s going on, I think we just need to be really restrictive or really aggressive about, can I automate that? How do I how do I get more done administratively, remove the barrier of of, you know, of resistance? Like, what can I do to make that as efficient as possible so that I don’t keep trying to solve the problem by adding more and more administrative head count? So, I mean, that’s just one of a zillion ideas, but that’s just probably the headspace I’m in currently. Yeah. Josh? Yeah. I I’m gonna go back to something I mentioned earlier, and it really kinda piggybacks on what I said earlier about a system. But it goes back to finding, I think, this in this part here where we’re trying to actually scale and grow, it’s making sure that I have a rhythm around how I’m looking at that system and developing those rhythms and sticking with them. Brandon mentioned it earlier. I think, Brandon, you said you’re looking at things on a weekly. To me, that’s crazy important to develop that rhythm and that cadence around what you’re gonna be doing there to make sure that we can react to whatever going on quickly. Because if it’s COGS, if it’s g and a, I don’t care what part I’m looking at. But if I’m not looking at that stuff on a regular basis and I go six months without paying attention to a key metric, that can get out of whack very, very quickly, and I can start to bleed in places that I didn’t even know how to cut. Yeah. Lukas? What do you think? APIs, which has already been said, definitely a plan. So, again, you have your budget, work that backwards, and as much detail as possible. And last one, which is nonnegotiable in my opinion, start saying all two things. Like, we all know like, everybody on this call, if you’re an owner, you know that there’s been a job that comes in and you’re like, man, I can make, you know, easy ten grand on this, but it’s not exactly what you do. And you wanna take that job, The sooner you start saying no no to those that give you that little feeling in your in your gut, the faster you’ll Yeah. You’ll grow and get ahead. Like, it’s it’s probably the biggest mistake everybody makes at that stage, in my opinion. Takes work, but they shouldn’t. Yeah. At the scaler stage, the other thing I oftentimes see is they hire resources for the field to do the work, but they can’t afford to hire the best operator the operational resources because and the owner’s not. The owner is really good at restoration, but not skilled at being an operator, but they don’t want to invest in the best operator. And I find that that’s a huge miss at this stage because most restores have a significant marked opportunity. I mean, the the restoration industry is growing year over year. Right. You’ve gotta be good at at executing on an operational level because that’s gonna be one of your key growth drivers. Yeah. I agree the field’s important, but I think we said earlier there’s that balance. But here, you’ve gotta put a a killer operational team in place starting with one person that you really, really trust. Yeah. Agree. And then what about the machine? So you’re going past seven million in revenue. You’re you’re striving for twenty percent net margins. What are you looking at in terms of the health of your business? And, Brandon, this is probably something you’ve lived through. Yeah. I think the very first place is just GP, profit. Like, I I it’s year after year when I’m wrestling inside any business or any part of our process, like, if you go back to what’s happening at the job or department level in terms of gross profit, most of the time, you’re gonna find whatever you need to solve. It’s just very uncommon for it to be sitting directly in your g and a. Like, it at the end of the day, it’s like, how are we managing the work that we got access to? And so I think I think just understanding what are all the levers that are affecting that that gross profit, how consistently are you evaluating that at a job and department level? So not just like how do we do this year, but how is the department performing? And put all those indirects in there so that you understand your accounting for all the costs associated with doing that particular division’s work. And the better you can be at at protecting that gross profit, inevitably, you’re gonna have enough money to pay for the rest of the business. And so that’s just that’s just what I try to center around. So GP is the very first one, and then I’m gonna go back to where we started. The bigger a company gets, the worse they often get at closing because they stop caring as much. And so that that’s like, we wanna onboard sales teams and BDRs and start investing in digital spend. But then if we go back and look, we are often closing at a substandard rate on the opportunities that come in the door. And so just focus on tap, maintaining that, and creating an environment where everyone’s excited and accountable to how well they show up and then convert that opportunity into produced work. Excellent. Josh? Yeah. I mean, I I agree with Brendan’s, assertation there on gross profit, but I’ll I’ll take it in a little bit different direction. I I I tend to think that we’re in that machine role and we really start to see consistent growth and we’ve reached that kind of level. It it from my perspective, yes, I wanna pay attention to some of those numbers, but I also really look at, in my mind, the hardest thing in what we do in restoration, especially at that machine level, is making the phone ring. And drying a building comes secondary to making that phone ring. And so as we really started to be a machine at the companies I came from, we really started to adopt not just a great culture, but a great sales culture. Right? We had a recognition from top to bottom of what it took to get that phone call to come in. That plays into closure rate and all those things we talked about, but it was almost, it was almost a a a push and a drive to making sure that the technician at the very base level recognized this is the first job we got from this referral source, and Lukas and his team have been working on that for three years. Getting that from the top to bottom and spread through, I really think helps us start to turn that into, the machine side of things. Yeah. Great. And, Lukas? Yeah. To piggyback on this, I agree with, obviously, everything that that, both Josh and Brandon said, and to simplify for our audience. And I think that seven million, again, enough is the critical part to do this is if you approach everything at that number from a standpoint of how do I remove myself from working in the business to work on the business, you’ll be forced to actually execute every one of those ideas. Because every one of those ideas are great. But you may each of you may do them at different times with your business. But I think at seven million is a great start to start looking at how deep am I actually in the business actually swinging the hammer or doing something? And the more you put yourself out and start working on the business, not in the business, you’re increasing your multiple on potential sale. You’ve actually put in people that are gonna help you grow, and it’s not all on your shoulders. An extremely tough exercise, but that’s a simple way of putting what both Josh and and Brandon has done. And if you think of it that way, it’ll force you to to do the right things. Awesome. Thank you so much. This has, been great having all three of you on here and sharing your wealth of knowledge. We’ve only scratched the surface on this topic, but I know all of you openly offer your advice and services to this industry because you care. So I thank you for that, and I I send that out to the audience that these are great individuals that you can meet at the conferences, and they’re always happy to engage. And with that, let me throw it over to Leah to close. Thank you everyone so much for for joining us today. Thanks, Brandon, Josh, Lukas, and Paul for dropping knowledge bombs on us today. It was so, so great. Happy happy New Year. Everyone. Happy New everybody. Take care. Thank you, Paul, Brandon, Josh. You. Thank you. Bye.

Good afternoon, and welcome everyone to this exciting webinar. We’ll just give everybody a moment to get in and get settled, and then we’ll kick things off in a couple of moments. Alright. We’re gonna get we’re gonna get rolling here. I see lots of people are still rolling in, so we’re gonna get started. But please welcome as you’re as you’re joining. We’re really excited that you’re here for this �Թϲ����� AI preview of the future of restoration workflows. My name is Leah Vusich, I am the Director of Product and Content Marketing here at �Թϲ�����, and this is a super exciting event. About a month ago, we kicked this AI conversation off by talking about our our vision for AI in the restoration industry. And we promised a preview of what we’re actually working on, and that’s what we’re here to do today. Super exciting. There’s a lot of interest in this in this topic. We had over 1,200 restorers registered for this for this session. And we know that a lot of those groups are teams of people who are watching together in one room. So that number is is amazing, and we’re so excited to share share what we’ve been working so hard to bring to the market. Quick introductions. We’ve got Shaun Coghlan, the Director of Product Management here at �Թϲ�����. He steers the ship on all of our features that we bring to market. We’ve got Kash, he is our Senior Product Manager. He leads our contents content squad as well as, some of our fields tools that he’s gonna talk about today. And then we’ve got Mike Aho. He is our Product Manager for our water mitigation Hydro product. So I’m gonna stop talking. I’m gonna disappear. I will be answering questions on the back end. These guys know if they see me appear, they’re talking too much and we need to move on and, or we have a question that we need to answer. So, over to you, Shaun. Perfect. Thanks, Leah. Super excited to be here today. I’ve done quite a few of these webinars. And like Leah said, we did the our first AI one, just over a month ago, with huge reception. The fact that we have well over 1,200 people registered for this shows the enthusiasm for kind of using technology to improve the restoration industry and then, you know, how �Թϲ����� can can achieve that. So just kinda quickly look at at our agenda for for today. So I’m gonna do a quick recap for those that, attended the webinar at the end of September. Kinda at the end of it, my part, I gave kind of an overview of what our vision is of how, AI can be used within restoration, kinda used within the �Թϲ����� functionality. So we’re gonna do a summary of that and then talk about, data security and privacy. It’s really important to us since day one, and we’re putting that into everything, for AI as well. And then we have a list of five features that that we’re gonna go through. I hinted at these at our last webinar. We’re gonna show you where we’re at with each one of those features. We’re really excited. We’re enhancing the field documentation workflow. We’re improving and enhancing the contents workflow, and we really believe we can transform kind of the scoping workflow, with with what we wanna show you today. One thing I wanna talk about is kind of first question I think a lot of people are asked, like, hey, Shaun. When are these features coming out? And I’m gonna I’ll I’ll summarize kind of that for for everyone right now. So, right now, we’ve been working on the foundation for each of these technologies for the last year in our product. So understanding kind of the AI that exists, whether that’s machine learning, LLM, photo reading, and and data extraction from photos. And we’ve been working hard at understanding that technology and how we can apply it to the specific restoration use case. And now we’re getting to the point where we’re starting to develop the experience that we wanna, provide to you. So we’re gonna be showing you the experience that that we’re gonna be doing for each of these features. The goal is that throughout the first part of 2026, all of these features are gonna be rolled out. The field documentation enhancements, they’re gonna be part of your �Թϲ����� subscription. So these are core workflows to you. And then the contents pack out and the scoping tool, once they’re ready, you’re gonna be able to add those onto your onto your, �Թϲ����� subscription. The specific details, we’re not gonna get into them today. Once these features are ready, as usual, we’re gonna do more webinars and what’s new webinars going into 2026. We’ll talk about the specifics of, of each of those features once once they’re ready. So, let’s move on. Let’s kinda move on into, you know, what is our approach. And �Թϲ�����’s philosophy from from day one has always been about how can we help you, become more efficient and effective in the field to do your jobs. And a core part of that job is documentation, and that’s really where �Թϲ����� came out of. And kind of a a thesis that we’ve always had is we want to kind of disruption without interruptions. We don’t wanna interrupt your workflows. And if we boil down the restoration workflow to something as simple as possible, this is kind of what we get. A job comes in, whether that’s from a TPA, a private job, direct carrier, carrier work. However you get the job, you need to meet the homeowner, meet that property owner. First thing you need to do is kind of assess and document what you see, then you can kinda go out, produce the scope, understand the estimate, then you do the work. And, actually, this is kind of a cycle. As you do work, you may expose more things that need to be done. You need to document that. Does that affect your scope and estimate, change it, and kinda keep going until kind of that that property has been restored to kind of pre loss conditions? And this is kind of how we’ve approached it. And and for the most part, �Թϲ����� has really been focusing on the documenting the loss and really helping you solve that, organizing the data into rooms, helping you generate reports, all of all that data so you then you can share that with well, that’s the property owner, the homeowner, third party estimator or an internal, you know, national estimating desk or share that with kind of an adjuster or or a TPA to help prove and and kinda show everything. So this is the the generic workflow, what �Թϲ�����’s been doing. What we wanna do is continue or we’re gonna continue to do that and enhance technology. And, this is kind of this this �Թϲ����� hourglass that we’ve talked about. And we’ve this this has been our, our philosophy from the beginning, and we’ve now been able to expand it because of technologies like AI that are now available for us to take advantage of. So, really, what we’re talking about is, you know, what happens in the field is what happens. And, you know, there’s that proverb. You don’t get, paid for what you do. You get paid for what you document. So where �Թϲ����� comes in is being allowing you to document, kind of this unstructured information that you have in the field, whether that’s photos and videos, three sixty photos, notes, then readings if you’re doing mitigation. And previously with �Թϲ�����, we would allow you to take that and patch it up into really nice reports that you can then share with people. What we wanna do now is taking that to the next level where as that data kinda gets funneled through our system, we can overlay AI, artificial intelligence, our experience in the industry looking at standards, and help you then transform that data into more and more outputs. But what’s critical is you are in the loop. You are in control of it. You decide when and what gets processed, and then you decide what you wanna do with it afterwards. And we’re gonna help you take all this data, turn it into valuable information, and then allow you to put that into outputs. And for us, the first step that we’re doing in terms of this really transformative spot is focusing on scoping as an output. But on the input side, as we’re gonna show you, is really how else can we improve those workflows, and we’re gonna walk you through that. So as I said, if we break down kind of the the circle of restoration and the workflows, we’ve really driven home ease and accessibility of how we do photo documentation. And now with the new features that Mike and Kash and myself are gonna show you, we’re gonna speed up and and make that process even more efficient. And then more transformatively, taking all that information and being able to translate that into an actionable scope that you can then use to generate an estimate, figure out what you need, and where you need to send your teams, understand how you need to communicate with other people and have information that you can use to communicate that. And our belief is with this enhanced technology, the time that you spend in this cycle on every job, we can help further reduce it and make it more efficient, and more and let you do the things you need to do, which is helping the homeowner, helping that property owner get back to, their lives. They just have this catastrophe, and that and that’s your job. And if we can add any technology that makes that smoother and makes that easier and faster for you, that’s what we’re gonna do, and that’s what we’re gonna show you here today. So the first thing, before we kinda get into that, I really wanna clear the air on data and privacy and security. So as per our terms and conditions, this isn’t changing given the fact that we’re introducing AI into our app. You own your data. When you capture data, it is yours, and that’s kinda what our terms or conditions are. When we use AI, we are not taking your data and using it to train an LLM or train some external system. We look at the outputs that we create through the prompts, and the technology that we’ve put together on top of AI to help us refine the outputs that come there, but we are not sending your data off to another company for them to mine. You own the data. We’re not using it to to train someone else’s technology. The other important thing is you decide when it gets processed. So you’re gonna decide what data on a job you’re gonna pull in and put into your scope. You’re gonna decide what data, what video you want to summarize on our behalf, or what readings you want to be read, and Mike will walk you through that. And as always, from a security perspective, what we do is end to end data encryption. From the time you capture data on your phone to when it gets synced with the �Թϲ����� servers and shows up in our web app, all of that is encrypted. And when we use services that connect into the �Թϲ����� service, that is all encrypted as well. So we ensure that your data is protected and the privacy is there because you own it, and we we really take that, seriously here at �Թϲ�����. Let’s move on to some of the exciting stuff. So the first field documentation feature that we’re gonna walk through, Kash is gonna walk you through this, is, video summarization. So, Kash, you’ve been at �Թϲ����� almost two years now. You’ve done a lot of work, within our app, improving a lot of things. Can you tell us kinda where have you taken, or how are you applying AI to the work that you’re doing for for our customers? Yes. Of course. Thanks, Shaun. So for video summary, I’m really, really excited to showcase this feature. If you just go to the next slide here. If a picture is worth a thousand words, then you can really imagine how valuable a video can be. But videos can be long, and they can be difficult to review in reports that already have a lot of data. And so this video summary feature transforms your �Թϲ����� videos into a documentation powerhouse. It does it by generating transcripts for any videos created within �Թϲ�����. But more importantly, it takes that transcript and transforms it into a clear formatted summary of the video content. It outlines key topics, discussion points, action items, and organizes all of it easily for you to review. And what’s more, these summaries can then be converted into notes with a single click of a button, meaning that you can edit them afterwards and even include them in reports alongside the original video. And this is what I find so exciting about this feature is that it works not only with English, but it supports French and Spanish videos as well. So you can imagine for a team with multiple languages, it’s possible for your team members to speak in the language they’re most comfortable with knowing that the insights and the summary generated from �Թϲ����� will be automatically translated. And so you can imagine the impact of this feature, instead of taking notes manually in the field, you can opt to take a video, speak about what you’re experiencing, and �Թϲ����� will do the work for you to format and summarize. I’ve heard this from folks in the field before, where not only is it difficult to fuss around with your phone’s keyboard while on-site, but sometimes if a homeowner is present, there’s a negative view that your team members are just on their phone even though they’re doing real work. And this feature lets you document seamlessly, visibly, and professionally without missing anything that you might have missed just taking photos. So now I wanna walk through what the experience is like actually using this feature. So if we just switch over here, I’ll share my screen. Awesome. So this here we have is a video that you’re taking in the field. This is kind of a small floor, the average moisture reduction rate or MRR in the living room area is fifteen percent over the last 24 hours. It’s just a small snippet of a longer video just for the demo purposes, but we’ve processed the whole video through our AI to be able to create the summary. But you can see here Brandon is talking about general trends for readings and goes on ultimately to talk about the source of loss being a leak behind the fridge. And so once this video is completed and you’re done, you’ll actually be able to see here the opportunity to add a video title and then opt to generate a summary either in English or in French because, like I said, we support that automatic translation. So once the video is completed and it’s been uploaded, you can see there, the summary is being processed in the background. Once the summary is completed, you’ll get a notification saying that it’s done, and you can either click the shortcut or you can click into the video to see the summary itself. When you’re in the video, you can actually see the transcript attached directly to the video. So you can see the transcript here. But more excitingly, if you click into the summary section, you can actually review the video summary that’s been generated automatically from the content. This really showcases how powerful this feature is, turning a simple video into an audio into clear professional documentation. It’s definitely gonna be different depending on the data of the video itself, but you can see here in the summary, it’s described the context of the video. It includes specific data points that were discussed, and it broke down the topics of the video into easy to follow subsections. And that’s the exciting part is that not only have you created this documentation, but with a single click of a button, you can convert the summary into a note so that it can work the same way as you’ve been doing your current documentation and integrate seamlessly with any of your reports or any of the workflows that you’re currently already doing. So very quickly, I want to just showcase what this would be like using a Spanish video. So you can see here we’ve got a video in Spanish. And so once you’ve completed your video in Spanish, it’s the same workflow. You complete the video, and you can choose between generating the summary in English or in French. And then once the summary is completed, uploaded, and processed, you can immediately view the AI generated summary in the selected language. So this is in English. And so you can see that every member of your team can now actively contribute to providing detailed field insights regardless of any of those language barriers, and �Թϲ����� will handle the rest to enable professional, clear documentation, and really multiply the impact team can have. And best of all, like I’ve shown you, this feature is integrated directly into your existing video creation workflow. So if you’re already taking notes, this already immediately unlocks a treasure trove of field data without any extra effort on your part. So I’m super excited about the impact this feature will have. Back to you, Shaun. Perfect. Thanks, Kash. Yeah. This is something we’ve been talking about for a long time, so it’s exciting to to see it out. Ethan just mentioned that had a question, like, what about Spanish? As Kash said, I think the videos will take the Spanish input, and we can convert it into French French and English for for those. And then, actually, Jonah had a question around, are you doing voice voice notes? I’ll talk about that in a second, Jonah. Don’t worry. You’re getting, we’re getting ahead ahead of the ahead of the game here a little bit. Great. Perfect. Thank you very much, Kash. Let me, let me take over sharing again. Screen share. Here we go. There we go. Perfect. Okay. So the next feature I wanna talk about is kind of building off of actually what Kash and his team has been doing with video summarization is. Let’s take that technology, and can we apply more of it to just our note functionality in general? So what we wanna do is very basically add in kind of what you expect to happen with AI kind of within a note. So we’re gonna offer features that allow you to kinda clean up and organize notes that you’ve provided long notes. We can help improve spelling and grammar and formatting. If you have a long note, we can create action items out of it. If you’re at our webinar earlier this month, we talked about kind of rich text fields that’s coming out. We’re able to format, and add bullet points and check boxes within a note. We’re gonna take advantage of that feature leveraging AI. And then similar to vo video summary, if you have a note in your app, we’re gonna allow you to translate that to English, Spanish, or French. You’ll be able to convert that. So, again, just like video summary, the impact we’re trying to do is saving you time in editing and reviewing, clarity and consistency across the teams, and really help you provide these professional notes that you wanna add into your into your report. So let me, just share, the demo here. I’ll get back to the demo. There we go. So here, in this note, it’s kind of a fake note we have here where someone has, kinda written a basic summary of what’s been happening on the job. And in fact, Jonah, this one’s for you. People don’t tell anyone. We haven’t really announced this yet, but we are working on kind of a voice note feature as well where you can dictate into our app, and we’ll transcribe what you say directly into the note. Today, if, on some on some of your smartphones, you can do that with the keyboard, but we’re gonna embed that directly into our notes. That’s coming, early next year as well. But once you have this note, so if you’ve spoken that in there or you’ve typed typed it in there, you’ll be able to kinda, you’ll have our AI AI sparkles. Basically, on that note, you’ll be able to click and choose what you like to do. So if you wanna summarize this exactly like Kash just showed using that same technology, we’ll be able to format and organize kind of that long note that you’ve provided into different sections that are kind of relevant to a summary within within restoration. Or if you want, you can you know, let’s fix gramming and speller and break out this giant note that I just spoke into paragraphs, add the appropriate, punctuation, and kinda fix some of that spelling. Thirdly, find action items. So if you just wanna talk into your phone now or type into your phone, okay, team. We gotta do this, this, and this in the kitchen, and then you can create a note in the bedroom. We have to do this, this, and this. We’ll be able to translate that and provide you kind of the new tick boxes with our rich text notes, and you’ll transform that note kind of into action items. And then lastly, if you have a note like Kash said, if you have your crew speaks many languages, they can and types many languages. If they’re comfortable in Spanish or comfortable in French, they can type it, and then you can then translate to English, French, or Spanish. And then you have the ability of inserting it into the note either at the bottom or at the top. So I think these notes enhancements, like AI summary and everything that we’ve been talking about is how can we help you in the field so you can just do the job of repairing the house and make documentation kind of even even easier. So with that, we’ll go back to the presentation. Alright. Now I’m gonna hand it off to Mike to talk about moisture reading. So Mike’s guy on my team that’s been focused on mitigation, particularly water mitigation with our Hydro functionality. And, Mike, I think over the last year, you and the team have really worked on improving the experience within Hydro, specifically with with readings. Right? And, you know, what what can we expect from you going forward? Yeah. Yeah. That’s right. So we all know that, taking readings is really a high effort to high volume thing on the that people do on the job. It takes a lot of time, and it’s also highly subject to human error. And so in the past, year or so, we’ve launched a few things that make it real foolproof to take some types of readings. So we launched the Tramax integration to make moisture content readings way easier with one click. And we also integrated with weather stations, you can now take exterior readings just by tapping into the local weather station. And so now we’re taking a little one step further to allow you to take any type of reading you want with just one click. So we’ve introduced what we’re calling smart moisture readings. Now what does that mean? So, basically, what that means is that just through snapping a photo, you’re now able to get all this extra information just in one click. So we know that having a photo is is key to having, extra evidence when you’re taking your readings. So now what we can do is we can snap that photo of your meter. We can scan all the readings that are on that screen that you’ve just taken a photo of and populate the fields and that feed your reports in Hydro. And so this automatically inputs all your data entries with no manual entry, and it works for all types of moisture readings using a digital digital meter. And so the impact of this is, well, we can eliminate all human error because now there is no manual input. So it’s gonna reduce the likelihood that you’re gonna make mistakes in the field and have to correct some of your data. And, also, this is gonna force people to take photos. So a lot of times we find that technicians, they might take readings or forget to take a photo, or they might take a photo and forget to input the readings. And now with just one click, you’re getting all three of those data points. And so it’s gonna be much harder for any kind of reviewer to actually question your reports. Secondly, what it’s gonna do is it’s gonna make it’s gonna improve the accuracy and consistency in all your reports. So if everyone is following the same process on every single reading, you’re always gonna get the same result. And if you’re always getting the same result, all your reports are gonna be consistently the same with the same results. And so it’s gonna be much harder to figure out, you know, gaps and where your data might have gaps in your reports, and it’s gonna make it way more consistent for reviewers. And finally, it’s really gonna speed up the documentation of readings in the field. So, basically, right now, this isn’t gonna add any extra steps into your workflow. It’s actually gonna make things easier and probably less work to do. And in doing so, you’re actually gonna get more robust data into your reports for reviewers. So it’s really gonna be a big improvement, and it’s really new intuitive way of capturing readings in the field. So what I can do now is I can show what this might look like or what this does look like. And so if you’re on the task list in Hydro, you guys are familiar with this page. Let’s just say let’s take an affected area air reading. You click on that task. And the current state is what you would do is you would have your meter on the wall or the material and or holding in your hand in this case, and you would just manually log in temperature and relative humidity. But with this new workflow, you just have to hit add meter photo. And in the background, what we’re doing is we’re figuring out what readings you’re looking for based on the screen that you’re on, and then you just simply snap the photo. And like magic, we are giving you both of those readings. So, again, this is three data points that are gonna be reported on with just one click. And then on top of that, we still calculate some extra little ratios that are helpful for you to to assess what’s going on in your job. Hit save, and it’s as as simple as that. So this is gonna be a really intuitive, improvement for taking readings in the field, and I we think it’s gonna shave off hours of time and reduce a huge amount of, manual errors. So with that, I will pass that over to Kash. Well, before we get there, Mike, actually, few few people have asked asked this question. Does this work on any meter, or is it only specific meters? Or do I have to specify meter before before No. So this this will work on any kind of meter that is a digital screen. The the meters that will not work on currently is gonna be those dial meters. So such as, like, a concrete meter that uses the traditional dial. We’ll get there, but currently, it does not work with those meters. But any digital meter, you won’t have to specify. It’ll just know what to take. Perfect. Awesome. Thanks, Mike. Yeah. I think that was the number one question coming in, coming in during that segment. Cool. Let me take over screen share again. And while I do that, there were a few questions that came up on the kind of note enhancement stuff that I’ll I’ll briefly mention. So someone asked about check check boxes, or does it just act as bullet points kinda as we’ve shown in the past? It’s an active tick box, so can once it’s in your note, once and you move into the edit form, you can check it and and uncheck it. So that’s great. So it’ll be fully kind of interactive at at that point. K. Perfect. Kash. Someone also asked was, are we only doing stuff for mitigation? What about content? And the timing couldn’t have been more good question. Question. And over to you, Kash, because you’ve been again, you’ve here for two years. Not only have you done a bunch of work on the field side, but I think you’ve been working on implementing some changes to to our contents and not just this feature, feature, but kind of other things. Right? Yes. Exactly. We’ve been doing a lot of work on the content side, and so this is why I’m kinda very excited to showcase some of the upcoming AI features for content specifically. So if we just go to the next slide here. Awesome. So this is a feature that I’m really looking forward to showcasing to you. Anyone that’s done a pack out knows how tedious it is not only to box and pack up those items, but to then document and then add a description. I know at �Թϲ�����, you’ve done a great job of making that field experience a lot more seamless, but this feature, AI descriptions, really brings it to the next level. As soon as you snap that first photo, an accurate high quality description will begin generating in the background. It runs while you work, so that means that you continue you can continue to take notes, take additional photos, etcetera. And as soon as that description is completed, it’ll show up right at the top of the view for you to review. And �Թϲ�����’s AI works for you to create a clear searchable description, but it also pre fills additional data like quantity, brand, and if it’s visible, it can even read model or serial numbers. Any and all of this data being generated integrates seamlessly with your existing �Թϲ����� reports and workflows, so you don’t have to change anything about the way that you work to immediately benefit from this feature. Now over the course of a pack out, AI descriptions can save you hours from manual data entry, but this also helps you improve the accuracy of your descriptions and ultimately makes these items easier to track, identify, and search over the life cycle of an item. Now if we go to the next slide here, I wanna show you what, really quickly what makes �Թϲ�����’s AI different. As you’ve heard before, we’ve tailor made our solutions to be for the specific contents use case. Even for something as simple as a mustard bottle, which I’m sure many of you have dealt with when going through fridges at the site of loss, you can see here that if you process this image through a generic AI model, you’ll get a description, but it’s unfocused. And it would require you to edit it further to actually add something like this to report. It doesn’t have the professionalism or the focus that you’d need to actually save you time and energy. Now �Թϲ�����’s generated descriptions, they’re clear, they’re concise, and they’re focused on the important information that would be useful for you for your end goal. Specific brand information, calling out clearly what the item is, identifying things like volume, weight, and size if it’s available, being able to parse out the bunch of data that’s on a label or kind of contextual on the object and figuring out exactly what’s important for your use case. And the goal of these descriptions is really to make something that works and that you can add to a report without any extra work, review, or hassle. So now I’m gonna share my screen, and I’d love to show you kind of what this experience is like. So just give me one second. Awesome. So you can see here on the screen, as I’m sharing, that, you know, imagine you’re in the field, you’re packing out items, and this is a very common use case here where you are packing out a homeowner’s collection of books that you’re documenting. So once you’ve taken the photo with AI descriptions, as you’ve taken that first photo, the description automatically begins generating in the background. And as you can see, once completed, it’s visible on the same screen for you to review as long as you’re online. No extra buttons, no extra triggers. If you want to edit or change anything or add more details, you can still open the details pane and still be able to kinda complete the same workflow that you’re used to with contents. And that’s honestly the most exciting thing about this feature for me. Usually, when I demo, I’d like to show all the new buttons, all the new workflows, but that’s the magic of the AI descriptions feature. It just works. And Circles AI does the work for you in the background so you can save time and focus on what needs to be done. As Shaun mentioned, we’ve been working hard to make many enhancements to contents experience. So what you see here is actually the new contents view that’ll be releasing soon that’s built from the ground up with this new AI description feature in mind. And you can see here with dispositions and boxes being sticky between items and are accessible anywhere within the camera flow, for a lot of items with this AI description feature, you won’t even have to open the details page. Your workflow becomes snapping the photo, letting �Թϲ����� AI do the work, and then continuing on with the rest of the stuff that needs to be done on-site. Like I mentioned, in the case of being offline, the description will be queued and will process as soon as you reconnect to the network so you can trust that this will work in any scenario. Now I wanna end off by showing just how powerful the item description is. It’s not just, blindly describing what’s in an image, but it’s contextualizing and identifying what’s important. Now I know this is simplified for the demo, but these are actual inputs and outputs from �Թϲ�����’s AI for the descriptions. You see for this book, for example, even though there’s a lot of visual information on the cover, the description isolates the name of the book, identifies the author, correctly identifies if it’s a paperback, and even highlights the color. But you can kinda see from this example, these are fairly straightforward examples of things that have clear labels. But where this AI shines is in items that are hard to identify in the field. And so what I’ll do is I’ll show you a couple side by sides of some examples that showcase just how powerful this feature actually is. So you can see in the side by side here that we have a device. And kind of at first glance, you can’t really recognize what it is in the field. But you can see through the AI processing, it was able to not only recognize that this device is a CPAP device, but it’s also able to pull out the specific brand details as well. So it’s able to contextualize specifically what this device is. If you look at another example here, we can see that this is kind of a controller, but the AI is be is it capable of identifying specifically that this is a PlayStation five dual sense wireless controller. So it’s able to give you that much more detail, specificity, and accuracy when it comes to descriptions. And in terms of impact, this is huge. I’ve attended several pack outs myself, and I can tell you there’s a lot of times where you encounter an object and you you can’t just really figure out what it is. And this is especially true for teams that have a language barrier on-site. So with this feature, every team member can contribute to the documentation efforts. And I can see I’ve seen it before where only a few members sometimes are training descriptions and become a bottleneck. This not only fixes that, but really simplifies your training requirements. I’ll show you more examples. So you can see this is a rice cooker, and you can see the AI was able to recognize not only that this was a rice cooker by contextualizing the image. It’s also able to take kind of the context of the buttons to identify. This is a rice cooker. This is branded by NutriBullet, and it’s got a digital display. This is really interesting. You can see that it’s processing a pair of shoes, and you can see here that it’s able to identify a lot more detail than you think. This isn’t simple OCR. Nowhere in this image, for example, is the word Under Armour, but the AI is actually able to not only read the logo, but identify the logo itself as the Under Armour logo and provide that information under brand. I’ll show you another example, clothes. Clothes are a big example. The description identifies color, material, any images or decals. You can imagine how useful this is when the homeowner calls you asking for her husband’s favorite shirt from his favorite show, and you have to search through a bunch of items that are just saved as shirt. And so this is able to give you that identification and that specificity that really, really helps. And lastly, decorations, cups, odd odd things in a household that are really hard to describe. This is an example of one my favorite cups. It’s shaped like a bird, but how many times in the field would you call this cup or mug? So this feature not only saves you time, but increases the quality and professionalism when it comes to how items are documented and show up shows up in reports. So this not only gives more comfort to the homeowner, but as I’ve mentioned, it just makes it easier for you to find items over the life cycle of a claim. So overall, I think this is the kind of enhancement that really makes a big difference. Big impact, minimal change to your workflow. As Shaun and Leah have said, disruption without interruption. It’s not just about streamlining your content’s experience, but it’s really like having �Թϲ����� being another actively contributing member of your content’s team. And I think that’s really, really exciting. So that’s all for me, Shaun. Perfect. Thanks, Kash. Lot of good of feedback and commentary in the in the chat. I know it’ll be lot lot of excitement around this feature while we get it going. A lot of questions of does it work offline. And kinda as you said, we queue it up, and then as soon as everything is synced, that’s when we’ll start generate generating the the names. You just continue to do your pack out rapidly, and then we’ll provide those descriptions as soon as as soon as it gets connected to our to our service. Exactly. That’s wonderful. Alright. We’re at, 12:36, and kinda let’s move on to, AI scope builder. I wanna be cognizant of everyone’s time. So we really believe this, of where we’re heading. And as myself and Mike and Kash showed you, there’s a lot of work we can do in the field around improving how we capture and document, a job loss. And in and in fact, this is, you know, �Թϲ�����’s backbone is documentation. We’ve pioneered the category of field documentation. We’re one of the one of the first and, continue to be the leader in terms of the mobile first approach. Right? Your team works in the field. You have phones in your hand. We wanna make sure the experience in the field is as easy and as smooth as possible. And, that’s kind of our value proposition. And everything that we’ve done and we’ve talked about is to enhance that and make it easier and more efficient for your team in the field to document what they need to do and move on and actually do the work that that they need that they need to do. And, like I said, no one else sees the field kind of with �Թϲ�����. And by overlaying kind of our experience in the industry, talking with our customers, looking at kind of the standards and everything out there, we can overlay AI and make purpose built AI solutions for our industry and improve the workflows that you do in the field. And now we wanna take that and bring it to what do we do with this information? How do we take all this amazing data that you’ve gathered and you’ve collected and turn this into information that you can then use to whether that’s create an estimate, tell your team what to do, figure out what are the next steps on the job. Really, this is this is our goal kinda with with the AI tool. And, the first thing we wanna do is, kinda send out a poll for for everyone. And, really, the question that we’re putting out there is, how does your team usually determine, the work that needs to be done on a mitigation job? So fill in the poll, while you get time, and I’m gonna kinda move on and start talking about the the �Թϲ�����, scope solution. So our scope tool, as I said, is really taking the data that is on the �Թϲ����� job and turning it into a ready to review scope kind of automatically for you. So taking your data, letting you select what you wanna be part of the scope, and then producing this output for you to review. And that’s critical. Things that we’ve talked about from the beginning is you are in control here. We are helping transform data into information and then allowing you to review it, to edit it, add more information as you need to, and then use that to help, help yourself do the job and and do all the workflows that that you need to do. So with our kind of purpose built rule engine that we’ve done with AI, we take in your photos. And it’s not just looking at the photo. We break down aspects of the photo looking for materials, damage, water, water staining everywhere. We really analyze the complete depth of each of those photos. We take in dimensions, whether that’s from floor plans, room sketches, or other means. We’re able to read the dimensions that you add onto a job and translate that into our scope. This helps us understand the context. We understand the effective materials. And all of this is backed by logic driven by the IICRC standard. So validating everything that we output in our scope for you is kind of validated and backed by IICRC logic. And, really, the impact that we’re trying to do is save hours on researching and drafting scopes. So the goal isn’t to replace anyone. It’s to let you use your time best way possible, which is let’s we can do the research for you and present to you, no. The data you put in, this is what the job looks like, and allow you to then add your own SOPs on top of it. Add your own, you know, carrier rules into it if there’s anything unique for the carrier for this particular job. Allows you to focus on that reviewing and validating the information versus the researching. And we believe this will speed up estimates. It can speed up approvals and really overall efficiency because it’s something you can do on day one or day two or whenever you need to to generate kind of the work the work that you’re doing. So now let’s look at let’s look at the output. So what I’m gonna do is show you, so this is one of our internal test jobs that that we use. I’m gonna show you how kind of you don’t necessarily need a lot of data to produce a full scope, but it’s really important that the more information, the more of our features that you use, whether that’s Floor Plan, setting up Hydro and putting in readings and creating drawing chambers and identifying dimensions, creating rooms, adding notes to each of those rooms, adding an overall note, the more data we get, the richer and more, full that scope is gonna be when we produce it. So if we look at this job, it’s very simple. It’s a it’s a water loss. We have essentially one general note that outlines kind of the the project details. So it’s a water loss. This is an insurance job, so it kind of was phoned in that a washer overflowed and kind of impacted, the laundry room itself and then the the the basement, the, underneath the laundry room. Kind of a bit of details from a content perspective or data within �Թϲ�����. We have, four rooms that were that were produced. So we have a floor plan as well. Just let this load up. My Internet is slow today. There we go. So we have a laundry room. Within the laundry room, we have, I think, eleven photos, storage room, a rec room, and a hallway. And with that data, I’m gonna be able to show you what we what we produce. But the first thing I wanna do is quickly show you how you’re gonna actually be able to oops. Let me so the actual process of creating a scope, it’s gonna be as simple as selecting the rooms that you want for for your job, hitting generate, and then you’re gonna get a scope kind of within �Թϲ�����. And that scope, is gonna be formatted, and it’s gonna allow you to edit it. But, really, what we wanna show you is what that actual scope looks like on a job. So I’ve I’ve done that here, taken this data, and run it through our, our scope tool. So as I said in the beginning, we’ve been working on the foundation and the technology in the background, and now we’re starting to work on bringing it into the app. And we’ve been working with a handful of customers to ensure that the data that we produce is very accurate against the job. And the ones that we’ve shown it to, they’ve been really, really excited about the job. So once you generate the scope, this is what it’s gonna look like. When we introduce this into the app, it’s actually gonna be an editable document. So you’re gonna be able to review it, remove lines, add lines, edit it yourself. But for now, we’re able to produce kind of a PDF, and this is it. This is what we’ve done. So based on that one general note in about thirty photos on a job and a floor plan with dimensions, this is kind of eleven page scope that we’ve been able to produce. And we’ve broken this out into a variety of sections that, to us, makes a lot of sense and mirrors how, you know, customers we’ve talked to and our experience in the industry, how scopes are laid out. So first and foremost, we give a quick overview of the timeline of the job, kind of the dates that were added into the claim. We have a quick summary of what the loss is. So what’s the project information? What was the cause of loss? Is this a category three or four? And all of this data is validated underneath, and we’ll I’ll get to those details in a minute. The next part, which is really nice, is this project narrative. And what we feel is very important with this part is it’s a paragraph or a bunch of paragraphs. So you’re gonna be able to take and kinda copy and paste this into a 24 hour report or share this with the TPA on that initial, inspection of the job that kind of explains what happened on the loss, kind of the details of what, what needs to be done. So in this case, you can see it was a water damage event on October 26th. Mitigation work began on the seventh, which was based on the dates that were inputted in the job. The category two, just from those photos and one notes, we can see that the affected area was kind of a washing machine overflowed and impacted the the rec room. So it’s really good summary of what’s happened on the job. After that, we go a breakdown of our room by room summary. So in this case, there were three affected rooms. There was a laundry room, a storage room, and a recreation room. In each of these summaries, we reference the standards within the IR CRC to justify why it was affected in the work that needs to be done. Really providing valuable insight and and, again, justification as to as to the work that needs to that needs to happen. Next, at a at a generic level, we pull in IICRC and have a reference section that talks about kind of the category of the class, and the next step within mitigation in relation to the IICRC. So, again, giving you detailed information to help you, you know, explain why you need to do the things and justify it against, kind of against the standards that that exist that we that we work towards. The next thing that’s really exciting is we now break this down into a room by room section. So the first is, we have a kind of a summary for each of the rooms. Was the room affected? What was the damage summary? What are the dimensions that we’ve been able to pull from the information? The other thing is we’re very clear about the assumptions that we’re making. So if you provided dimensions, then we’re gonna use those dimensions as part of the scope. If they weren’t provided, we’re gonna make some assumptions based on standard room dimensions, but then you’re gonna be able to edit that information afterwards. So really giving you a clear view of what’s happening in each room. And I think what’s really exciting where it gets really real is we break down the work that needs to be done in terms of the task. And, again, these are recommendations that we have drawn out of all the data that we’ve that you’ve provided in the scope, as well as kind of the leveraging the IRCRC standards and general practices. So making it very clear, that the line items that need to be done have to work kinda within within each room. So in this case, we have a two foot flood cut because we had photos that indicated that was what was needed to be done. We noticed in the laundry room that was a washing machine, a dryer. So having the line items to detach and reset those are really important, and we help capture all that. We have a safety section and an effective material section for each of the rooms, which, again, break down kind of, you know, help you understand what needs to happen on the job so you can then tell your teams kind of what what to do in the field. And then we repeat this for every room. So what you’ll see is here’s a list for for the laundry room, but that same list is unique for, in this case, the storage room and then is unique as well for the basement, rec room. So we’re really customizing the details for every room and providing you a very quick summary within minutes of you generating the scope, to get an overview of everything. And then lastly, once we’ve gone through each of the rooms, we do provide, equipment recommendations. So what’s really important here is, again, these are recommendations. We’re leveraging the IICRC calculations. We’re not on the site. You know, AI isn’t on the site. We’re taking the information that you provided and leveraging that to calculate kind of what equipment do you need. And right now, we’re focused purely on kind of the core equipment that is used on jobs of dehus, air scrubbers, and air movers. If you use things like inject a dry, the great thing about our scope is it’s editable. Again, you can, add on that to your scope. You manually enter it in. The other thing that we are pride ourselves on is kind of trust and transparency. So we provide the details of how we got to those calculations leveraging the IR CRC s five hundred. So being very open and transparent of what why we picked those numbers and how we calculated those numbers for you. And if you didn’t use Hydro where you’re able to set up drawing chambers, we’re gonna intelligently group rooms by main by floor. So in this case, a main floor and a basement, to create these chambers and then provide you equipment recommendations against those different chambers. And we even can call the fact that in this claim that you provided us, there was an unaffected room, and we call that out specifically. So that’s why it wasn’t referenced kinda anywhere else. So we really think this, the way we can transform this data that you’ve inputted very quickly and very easily in �Թϲ�����, then within minutes create this fully, flushed out scope. We’re really excited for this. There’s an opportunity for, kind of a bit of a paradigm shift where very quickly on a job, you’re able to understand exactly what needs to get done, and then you can tell your crews what to do as well as kinda share that information with whoever you need to share that with. That’s kinda where we’re at with, the AI scope. We’re really, really excited about it. We’re gonna put up another poll. So after seeing kind of this, output that we’re creating, we’d love to understand, you know, how valuable you think this tool could be for for your office. So with that, I think, I’ll turn it over. I think, Leah, you’re gonna come back and see if there’s kind of any questions that we have from, from the audience. The are there ever questions? We’ve been, I’ve been frantically typing in the background trying to get to everyone’s questions. So we’ve got about five minutes five minutes left. So apologies if I haven’t got to your questions. Type type in your questions, and if we don’t get them to get them to you get to them now, we will get back in touch. There’s a lot of very specific questions around workflow and can we do this and can we do that? As Shaun mentioned, we’ve been really working on the, like, the foundational elements in the back end. And now we’re building the UI, so it’s great to see all the things that you guys want to be incorporated, and we will, I say we, Shaun and his team will take all of that feedback into account to make sure that we get this feature right. And if it’s not exactly the way you want it right out of the gate or if it doesn’t do everything, you saw a lot of my responses, there’s some winky faces. So, like, we understand where the value is is in this feature going forward, and where we’re we’re just getting started. That’s that’s the message is, what you’re seeing today is just the start of the opportunities that present themselves, and Shaun talked about the hourglass and all of the downstream impacts that we can that we can make with AI, and we understand, we understand our customers. So thank you for all of your feedback. Okay. I feel like I kinda just need to, like, close my eyes and pick a question because there’s so many. You talked about a lot of the questions around smart moisture meters have already been addressed. One of the questions, Shaun, that came up is what AI are we leveraging on the back end, for for our AI solutions, if you’re able to answer that? Yeah. I I’ll I’ll I’ll get into that. I won’t get into too many specifics. That’s kind of our CTO drives that. But we so we leverage Microsoft Azure cloud services. And then through the Azure, AI portal, we have a opportunity to use a variety of different, third parties, whether that’s ChatGPT from OpenAI or Cload from Anthropic. And part of our process is when we create our prompts, we actually test it against a variety of different solutions and make sure we pick the best one that works for kind of that output. A lot of what we’ve been working on in Microsoft and OpenAI have a really close relationship. It’s been leveraging ChatGPT, but we have the ability to to use a lot of different, different options that are that are out there. Lot of questions around scoping, Shaun. What some of the questions around Floor Plan. Is a floor plan necessary to run, to to use our scoping tool? No. Floor Plan is not necessary. In fact, if all you have is a general note or a note that has a bit of a description, we can take that and create kind of a scope for you. Think the thing that’s important to note is the more information and more clear data that you provide us, the richer that scope is gonna be. But if you don’t do a floor plan, that’s fine. If you make notes that mark down the dimensions, we’ll be able to understand and extrapolate that information and apply it to the right section within within the scope. Although we encourage everyone to use Floor Plan because I think it’s it that’s to us, that’s one of our first transformational features to to help speed up the dimension process. Does the will this work with, only with new jobs, or would somebody be able to go back and do a scope with an old existing job? Yep. Once once you make this feature available, it’ll be available kind of across all of your jobs. So there’ll be a new tab on the web or a new section on mobile that you’ll be able to go back and run, existing existing jobs against and and create a scope. Great. Will the we had a couple of questions around particular use cases for scoping. So we talked about mitigation. Will it be relevant to fire losses, rebuild, that sort of thing? So for our kind of initial entry into this, we’ve really focused on mitigation jobs, specifically water mitigation jobs. So a specific, you know, a content or rebuild one, that’s kind of in the future. We’re definitely gonna expand our scoping features, but we’re really focused kind of on that water mitigation scope at this point. So thank you so much. We are at time. Thank you to Shaun, Mike, and Kash for showing us the future of �Թϲ����� AI. And like I said, I think the theme, we talk about disruption without interruption. So AI is a very disruptive technology, but restorers rely on their critical field workflows, and time is everything. And so we’re looking to use AI to disrupt and make your workflows more efficient, but we don’t want to interrupt the things that you’re already doing and the processes that you already have. Super excited about this. Thank you everybody for attending, and we will see you at the next webinar. Thanks, everyone.

Welcome, So welcome to our fire and smoke restoration boot camp. Thank you again for joining us. My name is Kristen. I’m the event specialist here at �Թϲ�����. We’ll cover topics such as capturing documentation, passing liability, proper cleaning steps, unique contents and so much more. This webinar is eligible for IACRC continuing education credits. So without further ado, I will pass it over to Chris. Hey. Good morning. Good afternoon, everyone. And to the Aussies, they’re sitting there at the middle of the night, thanks for getting up and coming out. Hey. I wanna thank you guys. I know that some of you guys are doing watch parties. I got a few emails saying that you have the entire teams in. I I still think that’s the coolest thing that you guys pull them in off the field. I won’t disappoint you. We’ll get started, and we’ll go through it. Little change of format. Normally, I got a wingman with me, someone who’s on the call this year running solo. So we’re gonna have a little bit more time for q and a. Just I I’m making the assumption we’re gonna fly a little faster through the PowerPoint with less dialogue. So more question and answer time. We’re gonna put a little extra time there. We’re also spend a little bit more time on the poll so it’s a little bit more relevant to what you guys are working on. And today, we’re gonna cover off a few of these. Let me get the PowerPoint fired up so we’re running. The goals of fire restoration, a lot of questions. There was a I can’t remember how many questions we had. I’m gonna say over a hundred about, like, how do you start the job off right? So the goals of fire restoration, added to it to kinda answer those questions. We have the new s seven hundred standard, the new s seven sixty. We’ll just touch on that because they didn’t get published. Last year at the, when we did this, we thought they would be published by March, and they’re still in, in editing and going through that. We’re gonna go through field documentation. So this is a touch on why you would do �Թϲ����� or why you would use �Թϲ�����, to document your jobs, but more so why is it important to your process of getting paid. A lot of questions on on, hey. How do we get paid? How do we, do we work with our adjusters? How do we convince our adjusters to that this is worth it? Then we go through the four steps of remediation. Little bit of a fundamental on the techno or on the technicals, but a little different perspective of looking at your fire damage jobs, which would keep you, with less liability. That should make you more money, or it should be easier to justify what you’re doing. We have source removal cleaning, and so we get into those steps, odor control and the use of encapsulants. Then we go through, are you ready for rebuild? Just looking at some jobs that that I’ve been out to, we’ve got a couple of the billionaires experience. I shared that story last year. I’ve got another one that we’re gonna talk a little bit more on contents and working with adjusters. A lot of your questions were around contents. How do we justify contents? What happens when the adjuster directs me on what to do? I’m gonna share with you guys a little bit of a case study. I didn’t do any PowerPoints for it, but it’ll be more of a discussion, and that should answer some of those questions. And then we’re gonna talk about how you can sell yourself, using fire and flood restoration. A lot of people were in saying, hey. I just got my training, or we’re just looking to fire up a a fire division, and we wanna understand how you would go about that. So this we’ll touch on a little bit of that, and then we’re gonna do the long question answer period at the end. Hopefully, we make it easier so that along the way, we’re gonna answer your questions. Let’s get started. We start with the first poll. What is the primary objective of fire restoration? And you guys have an option to put this in. Restore the property to an agreed condition, remove the contaminants and odors of the fire process, restore water and heat damaged materials, all the above, or follow the instructions of the adjuster. And so we’re getting those in. A lot of you guys are going to all of the above. Some of you are are focused on remove the contaminants, remove the restore the property to an agreed condition. I like this. This is all coming in. Lots of participation. Hey. Everything that we do on the polls, nobody can see but but me, and I can’t see who did it. So you guys can always answer honestly or answer the way you think it should be, and no one’s gonna call you out. Few people put follow the the instructions of the adjusters. It’s good to see we have some adjusters on the call. Alright. Kristen, if you wanna end that one, we’ll figure out those results. And so we’ve got restore the property is eight percent. Remove the contaminants and odor process is eight percent. And then a bunch of you said all of above, restore water and heat damaged materials. And then follow the instructions, the adjusters. We had six six adjusters. Come on, guys. What what’s interesting here is fire damage is a lot about getting into repairing what’s there, but we don’t normally approach the process that way. We don’t approach it in a in a systematic format. We show up to jobs, and we respond. And what we typically see is that we get in there and try to deal with everything without thinking about the goal or the objective of what we’re doing. And I want you to change your mind because as a technician or project manager, if you establish the objective at the beginning, then it makes it easier to get paid at the end. So if you’re going through and you’re you’re having a discussion around this I just gotta get this off my screen. If we’re going through the, the objective and you talk about the objective, it’s like having a drying plan. If you talk about the what the goals of the the water damage drying plan are, then we can see if we met those objectives. Same thing with fire damage. So when we look at this, I’d look at it this way. The objective is to restore. And if you come in here and say, our objective is to restore, and you finish the sentence, heat damage, smoke damage, and any water damage to the structure and contents, well, now what we’re doing is we’re entering a process flow. Can we restore it? So can it be restored, or does it need to be replaced? Everything that you touch inside a building has to go through those terms. If it’s drywall, can it be restored, or does it need to be replaced? Contents, if you start to look at things that way, which is if it’s heated up, is it permanently damaged? If it’s permanently damaged, can you reverse the damage? In most cases, you cannot. So that automatically has to be replaced. Then we look at it and say it’s water damage. Now is it permanently water damaged, temporarily water damaged? Is it porous? Is it nonporous, semi porous? How is the water gonna impact that material? If it’s impacted by fire damaged, water, are you gonna be able to restore it? So it’s kinda like the similar to cat three discussion. Right? If it’s been water with contaminants, we can’t restore it. We can’t get the contaminants out of the porous material. We replace it. This is a pretty important discussion that we have to start off with if we’re gonna walk down this path with an adjuster or with a homeowner. The next thing we look at is we look at the contents and say, well, what are we doing with contents? Can we restore it? So the answer is we can. Should we restore it? So if we’re dealing with, like, baby items, infants, maybe we don’t go down that path. The next part of this is that we would get in here. We do that by removing contaminants that cause odors and that pose a health risk to occupants. So when we get in and we start smelling smoke, a lot of us are dropping gear immediately because the industry has told us, hey. We should get rid of that smoke odor. But that smoke odor is a byproduct of a contaminant. Shouldn’t we be removing the contaminant first, focusing on contaminant removal, then we’ll focus on odor removal. After we’ve cleaned all surfaces, we then can deal with the odors. What I’m seeing as an umpire and in appraisal, so in dispute resolutions, I’m seeing that most of the disputes are coming from people that attack the odor without dealing with the contaminant. And so the contaminant is leading to corrosion or the contaminant leads to, VOCs being in the house that are dangerous to the occupants. When we start to see that, it’s usually that someone attacked the odor first, not the contaminant. Then we look at what’s there that poses a health risk. So if we have a dirty environment, you we’re gonna get into this when we talk about odor control. But when you got a dirty environment, the actions you take could lead to more health risks to the occupants. And so we already have a health risk from the fire contaminants. Never mind if we were to go in and add in the stuff that we do. And then I’m so sorry to interrupt. There’s just there’s a gray bar over the presentation. Is there? Well, let’s get that. We want everyone to get the full experience. That one. K. Well, that’s that’s fair. Let me see what we can do with that. How’s that? Fixed? Oh, way better. Thank you. Alright. Sorry, guys. Alright. We got that screen fixed. We’re there. Perfect. Yeah. There you go, Amanda. Alright. Now the next thing we look at is is our goal is to restore the property to an agreed condition. It has to be sanitary. So there’s kind of two things. The sanitary condition is that we’re working on the restoration side. If you look at the mitigation, the fire restoration, we’re trying to get the building to a sanitary condition where anyone can come in and repair it. The agreed condition is how are those repairs gonna take place? How is the paint gonna look? How is the carpet gonna look? What’s the wood finishes look like when we’re done? And do we have to then do some resurfacing to get them back into a better condition than they were before the loss, or is it acceptable to leave them the way they are? Now when we look at that, it’s ultimately an insurance question that comes in place is then we work with adjusters, but we don’t follow their instructions. Now I just had a large contents loss that was a large contents and building loss, over six hundred thousand dollars in in damage, where the adjuster gave direction to the restorers on how to do the work. And the result was that they never had any training. So they were telling a restorer what to do based on fifteen, twenty years of experience in the industry with no technical knowledge of of doing the work. And what happened is is in that process, I interviewed the, we you you bring the the witnesses in. So you bring the adjuster in, and both representatives get to grill them. It’s like a quasi court. And, so we we go through that process, and the question is, what training do you have in fire damage? And the answer is I’ve never had training in fire damage, but you change the scope of work. You’re not able to change the scope of work. You have no knowledge. And so in that event, the contractor ultimately was responsible for holding the bag. If it goes to a court, someone’s gonna have to pay and multiple parties will probably pay, but the restorer was the one with the experience that was supposed to know. And so when you look at it, the adjuster is there. Their job is to manage the insurance policy. So you have to understand the the the the job of them is is an administrative function. Is the loss covered? Yes or no? Is the value of the loss good or bad? Is it is it appropriate or not? Which money like, which reserve is this coming out of? That’s what’s important for the adjuster. How to physically do the work? They haven’t actually restored property. So in most cases, they haven’t. Some some restorers have made the transition, but even then, they’re not in that role. That you have to hang up your restorers hat and put on your adjuster’s hat and say, okay. I’m gonna do this. So be very careful when you get into a restoration job. This conversation is critical to you having a good job going forward. It literally is the start where you’re saying, our goal is to return the building to a sanitary condition. Here’s the acceptable appearances of these materials that we’re gonna clean. We’re either gonna clean them and leave them the way they are, or we’re gonna then further them on in the reconstruction process. That’s an easy communication to an adjuster so that they know what expectations are coming down the pipe when you say, hey. I need to get paid for what I did. We’re gonna get into detail here, but that is effectively what we’re doing when we when we have this discussion at the beginning. The next thing we do, we remove the contaminants of the fire. And what’s interesting here is this is where most most restorers get really focused on the particulate, so the heavy contaminants that you can see. Those ones, yeah, we can clean them. It’s the microscopic contaminants that lead to more odor. So there was a question that came in, during the, in the registration. And I said, you know, how do I deal with odors when I when they’re still there after we’re done cleaning? You haven’t got them. Like, that’s just they’re either in the material. So if it was a hot fire, they got in the material. Or they’re in pockets or they’re in seams or they’re under baseboards. You haven’t found the odor. And so the more odor control you do in the process, the harder it is to find the contaminant. To the point where you’re gonna leave contaminants behind, they might come back when the humidity levels go up, or they might come back when the heat gets higher in the building. So you’re gonna your goal is at the beginning, deal with those contaminants. The easiest time to find them is when they’re fresh. And I’ve had jobs where we’ve gone back. We did a seniors home. We had to go back and and take a roof off because that seniors home had smoke that was left in there. We dealt with the odor first. We left the contaminant behind, and the contaminant then caused more problems after the entire rebuild was done. That was a multi hundred thousand dollar loss that we had to eat because we didn’t do the job right. So these are the things that come when you don’t follow the right process at the beginning. The next thing we have is wire damaged materials. So heat is nonreversible, and and I’m gonna show you some photos as we go through where we normally look at, like, a smoke line and go, that’s that’s the heat line. No. That’s the smoke line. The heat line is much different. And in some cases in a hot fire, that heat line is coming all the way to the floor. And so that’s when you’re gonna get into a question of, can you restore it? If it’s heat damaged, normally, you can’t. Things that are heat damaged, sometimes you could restore the surface on them, but you have to be very careful that that they haven’t been compromised. The big one is drywall. Drywall is gonna be one that we’ll talk about and we’ll get into. And then water damage, how do you treat fireman’s water? Well, it’s got contaminants in there. Is it a category three? It’s not necessarily classed as a category three. It’s classed as a hazardous regulated material, but your processes will be very similar to a category three process. So you’re gonna be doing the restoration. You’ll be taking out wet and damaged contaminated materials that way. Fireman’s water, would treat more like a category three. Does that make sense? Alright. So the other problem we run into is our terminology. Pre loss condition is something we picked up from the insurance industry, but it’s not necessarily our term. We’re gonna restore something to pre loss. Now back in, like, the seventeenth hundred, seventeenth century when they were insuring ships, they would use the term pre loss to be like, hey. You’re sending this ship with cargo across the ocean. Pre loss is that we’ll get you a ship about the same age, and we’ll replace the cargo. That’ll put you into your pre loss condition. That was the premise of insurance back then, and that term has effectively stayed with the insurance industry, because it’s just part of their culture, their nomenclature, way they speak about, policies and insurance. For us, are we really restoring it back to pre loss condition? We have to look at it. What was the pre loss condition before the fire? Was it ten year old carpet? Was it fifteen year old carpet? Was it drywall with twenty layers of paint on it? Is that what we’re gonna restore the building back to? Or are we not doing pre loss condition? Are we just coming back to an acceptable condition or an agreed condition that we’re now agreeing to? Like, hey. You’re gonna get fresh paint. You’re gonna get new drywall. That’s not pre loss. So you wanna get away from pre loss because that’s an insurance term, and you wanna start talking about the actual goal of getting your job back to to the starting point. So your starting point might be, we have twenty year old drywall, with five or six layers of paint. We’re gonna be putting new drywall in with three layers of paint. We have plaster lath and plaster on the walls. We’re gonna replace that with drywall. That might not be acceptable. They may say, no. We would like lath and plaster back. That’s a different conversation. So you’re gonna your goal is just to hit that hit those marks and get it in there. I would I would argue that pre loss is is a is a discussion that you need to or sorry. It’s a term that you should get out of your your business and just start using to what is the acceptable condition. It’s sanitary, and the contaminants have been removed. And then what is the acceptable condition that we’re restoring the building to? Once we determine that, it’s your scope of work. Once you have your scope of work, then we’re basically going in and executing. And you should get paid if you execute it on an agreed scope of work. So that change of language means that you don’t have to get into the whole insurance terminology and understanding. Just avoid it. Now one of the other reasons that came in, and I missed this point, was was replacement cost. So the new policies the old policy said, hey. You’re gonna get a a ship to replace a ship of the same age. Today’s policies have replacement costs. So if this cup gets damaged by fire, I’ll get a brand new one if I can’t clean it. And so the insurance carriers get this, ability in the contract. Almost all the contracts have a wording, and it says that they have the option to replace the item or they have the option to repair it at a lesser cost. So they take a gamble. If they attempt to repair something, let’s say they go to re repair the cup, you they say, hey, guys. You gotta come and clean the cup, but you can’t clean the lid. Can we replace the lid in the straw? Yeah. You can buy that separately. But can you clean the cup? Maybe. Try it. Yeah. It’s successful. We cleaned the cup. Perfect. Now we’ll just replace the plastic on there, but the cup is clean. That’s reducing their cost. The insurance carrier has in their contract the ability to do that. The homeowners could say, I drink out of that cup. I’m not accepting that back. And the homeowner has a right, and that’s where the adjuster and the contractor will negotiate or sorry. The adjuster and the homeowner will negotiate. And you say, I can restore it. Should I restore it? Well, if the homeowner is not taking it back, probably not. That’s for an adjuster and a homeowner to have the discussion, and then you execute on whether it’s safe to do. And if it is, then you could perform the service. Or if someone’s not gonna accept it, you just say, hey. They’re not gonna accept my service, or are you gonna pay me to do it? And then you guys will deal with the the fallout. That happens all the time. Sometimes homeowners don’t want something. We restore it anyway, and we shouldn’t because it’s not gonna be accepted. Alright. Here’s a big one. You’re not an insurance company. So when we look at this, this is just how if you if I was explaining this to a technician, here’s how I would explain it, is we’ve got the mitigation process. Our goal is that sanitary condition. As a project manager, I’m gonna tell the homeowner, during the cleanup here, we’re gonna get you to a sanitary condition. We’re gonna remove the contaminants. We’re gonna find out the cause, which is the contaminants that cause odor, and we’re gonna remove those. And then anything that’s, like, microscopically left where there seems like we’re framing meets or maybe we’re just you know, we just can’t get to it. And financially, it’s not economical to attack that order. It’s not big enough for us to take a wall apart. Hey. We’re gonna try some of our older odor controlled methods at that point. And then we’re gonna get the order removed. And at that point, we have a home that you can come back to, and we could put any contractor in. There’s a trend right now that in mitigation, companies are leaving the job half finished, and they’re asking contractors to bid out the finish of the mitigation. So if I start the mitigation and I get the water damage, dealt with, and then I do some some structural cleaning by I do some of the demo, but I don’t clean it up. And then you as a next contractor come in and you take it over. If I put hydroxyl or ozone on a job before you did the work or I put a cleaning chemical in the job before you put your equipment in and there’s a problem that occurs, who’s responsible? Who’s responsible to get the building back to a sanitary condition? Neither one of you is gonna be responsible. You might be held responsible. You might go to court for it. You might be sued for it. But who’s responsible if you’ve only done half the job? So in a mitigation, your goal is to get it so that it’s ready for rebuild. Insurance companies take on a lot of risk, and res restores, we take on a lot of risk if we go down that path where you’re only doing half the mitigation. You should be responsible for making sure there’s no smoke odor and contaminants left in the building, and that’s when we turn it over to rebuild. In Canada right now, we’re seeing smoke and soot on walls, and they’re turning it over to a rebuild contractor. They’re not. They may have a a three day FSRT training. They’re not qualified to do the fire restoration because all they’re doing is sealing it into the walls. They’re not following the standards. So you’re gonna see the legal side. And and what the problem was, we didn’t have standards. So now we have standards coming out. That’s gonna change things. That’s gonna change things for the entire industry. The restoration side of our industry is now has a standard like the five hundred. You have something to be accountable to. On the insurance side, they have something to be accountable to as well. But once you get this job to a sanitary condition, your restoration is to get to the agreed condition. That’s just easy. What was the agreed condition? Old drywall for new. What was the agreed condition? Old paint for new. It might be if you were to look at it this way, what if we had a, what if we had a job where where they wanted like like, a mural was on a wall? So under normal conditions, we would go and paint the drywall. But today, because there’s a mural on the wall, they’re like, hey. Don’t paint over it. Just clean it, and we’re okay with scuff marks on there, and we’re okay with the the smear marks. The mural is more important. Well, the agreed condition is you it’s it’s gonna have some marks from the cleaning process. That’s okay. That’s fine as long as it’s in a sanitary condition. Does that make sense? Alright. Let’s go let’s go on. So here’s one that that you’ll see in, and this is an extreme example, but it’s one that you could then wrap your head around on normal contents items. And that’s when you look at different type of of work. So these are, artwork that was in Winnipeg. They were on the Chief Peguis Trail, so they’re outdoor art. When they were created, there’s these large they’re the size of a desk. Like, they’re they’re massive. They’re probably seven, eight foot long, statues, and they’re they stand very high. They were exposed to weather. They weren’t supposed to be exposed to the road salts. And so the road salts greened them out really hard. Now when you do restoration, what are you restoring this wolf back to? Is it the new condition? Is it the prior to the lost weathered condition? And it makes a difference. Now when you’re talking contents, you’re actually talking something along the same lines. Is it gonna be like new, or is it gonna still have paint chips and everything else to there, but it’s gonna be clean? That’s why you need to use your terminology very carefully. There’s three states that you basically come into. You get into a new state, so it has to be like new. Pretty hard on content. It’s a little easier on building materials. Then your next state is before the loss. So it’s gonna have the same dense things, scratches as before the loss, but it’s gonna be in a clean sanitary condition. Or it’s at some point before the fire, not necessarily pre loss, but not necessarily new. Those are your three conditions of restorability. And then the one you got on the end is it’s still contaminated, and you can have it back. We did our best job to to sanitize it, but we didn’t get it there. You’re gonna be looking at different types of items, not necessarily like this, but this is the extreme. If all of a sudden that that wolf got category three water on it or was in a fire, and we had to remove the fire or the soot damage from it or the heat damage on it, what level would we restore back to? It’d be pretty hard to get it back to the weathered look. It’d probably be a lot easier to get it back to the new look. So is that acceptable? And if you’re dealing with artwork, it depends on the artist’s intent. But if you’re dealing with the customer, it’s like, hey. I know it’s weathered. That’s how it was that’s how you had it. When we’re done with it, it’s gonna look new. Is that okay? And if the answer is no, then you’re gonna have to find a different solution. Right? So you have to have those conversations. But once it’s agreed to, you know what the target is. And if it doesn’t get to there, that’s okay. That’s the best ability you had. Maybe you bring in an expert, maybe you don’t. When we talk about buildings, this is another one where we’re talking about pre loss versus new. There’s your pre loss. If you use the term we’re gonna restore this building to pre loss, that is pre loss. Are you gonna green the top of this building? Because that’s new. So if we’re talking about the building and you use the terminology pre loss, your terminology has already set you up for failure. If you’re like, hey. The condition is we’re gonna replace the roof, and it’s gonna be copper, and it’s gonna be new, and it’s gonna have a coppery shine to it for a few years till it weathers, I don’t know if it’s gonna weather to the same law as the pre loss, roof, but this is how we’re gonna have to repair it. Is there an oxidization process that you can apply to that copper to get it to look like the other copper roof? I don’t know. Maybe. Probably is. Is that what you want me to apply to the to the material? You all you have to do is set it up and then let the adjuster determine if they can pay for it and let the building owner determine if that’s what they wanna do. Just find agreement. It’s all communication. Everything that we see in disputes is a failure to communicate from the start. Like, a hundred percent of the time, it is you failed to communicate what you were gonna do. You failed to communicate the potential You failed to communicate the results you expected. And at the end, there’s a dispute that comes from that. As a contractor, you’re ultimately responsible for the path that you take a client down. All you’re looking to the insurance company, if you really wanna simple it down, all the insurance company is is there for is determining how much they’re gonna pay. Are they paying for the the building? Are they paying for your services? Do they is there exclusions? Hey. Half this roof is worth covering. The other half, the insured has to cover. Okay. Then you have to collect your money from them. Does it make sense? That’s really what we’re looking at when we talk insurance. It’s just clearly define the scope, clearly define the expectations. Alright. I’m not gonna beat that horse anymore because that one leads does smoke damage change our process? So we have we live in a world where right now insurance companies want to get a lot of our projects bid out, and they moved the bid process from the big repairs to the smaller repairs, and now they want the mitigation to be be bid out. Give us a a hard price. You have to know what you’re doing if you’re gonna do that. Now it’s really hard to bid out fires. It it’s it’s hard to bid out water damage. It’s hard to bid out trauma. The reason why is sorry. And trauma is a little easier than the other two because the other two, fire and water, have things that you’re gonna discover as you go. You’re gonna have inefficiencies from things that burned in a fire or different types of contaminants to get on water. It’s just the way our industry works. When you know the efficiency, I know how long it takes to paint a wall. If I paint a hundred walls that are ten by ten, I will tell you within a very small amount of time what the difference is between my best wall and my worst wall. Can you do that with fire? It is really hard. And the reason why is fire has two different types of smoke. And if you don’t know that going into the fire and you think that you’re dealing with a dry smoke and you’re dealing with a wet smoke, you’re in for a really bad estimate. So when we start looking at profitability, we look at efficiencies. When we look at efficiencies, we go, what type of smoker we own? And you have to know that going in. And then on top of that, there’s also other things. So where did the smoke come from? Is it a plastic or a natural? Was it a a high heat burn or a low heat burn? Was it starved of oxygen? Depending on what we look at, how are you gonna bid it if you don’t even know what you’re looking at for the type of smoke that you dealt with? So you can go in. I I’ve got some videos that I I’m I’m gonna be putting up. I was playing around with a a wood stove and playing around with with getting wood. So a natural material like wood, you can make wet. You can get a a really wet smoke out of out of wood. You can also get a dry smoke out of wood. You can get a wet smoke out of synthetics, but it’s harder to get a wet smoke out of synthetics because of their their combustion temperature that it takes to get them up to a clean burn. And with synthetics, there’s no real clean burns. You get a bunch of nasty stuff that comes out of them. Wood’s the same way. We love bonfires. Lot of carcinogenics in bonfire wood from just the wood burning, but we accept that risk. And the reason why is there’s a low dose. It’s outside. If it’s in your fireplace, you’re getting exposed to carcinogenics, but the risk is low. The dose is low. On synthetics, the dose could be low, but the impact could be high. And so you have to start thinking about what are we restoring. So if we get into a wet smoke fire, one of the things is that, hey. Wet smoke is is usually considered a cold smoke or a cold fire. Well, that’s kind of a little bit of oxymoron, isn’t it? Like, it’s not a cold fire. Fire’s hot. When we look at this, we go, okay. What is happening? Well, it’s in the early stage. Typically, a wet smoke is in the, they call it the incendiary or the ignition stage. So during the ignition, you’re gonna have a fire that starts. Now it’s normally a smolder. So there’s enough heat to create smoke, but not enough heat to create a hot fire. You might get a little bit of a flame, and and it it’s like when you light a candle. At the beginning of lighting a candle, you’ll see that black smoke come up. And then when the candle gets going, it gets to a clean a clean burn. Now there’s still smoke coming out, but it’s not smoke you can see. It’s very fine. But when you first light a candle, you get that black smoke off the candle. That’s because that’s that incomplete burn that’s happening. Same thing happens with wood or plastic. So when we start looking at wood at cold smoke, it’s an incomplete fire, incomplete combustion. So you go from the initial ignition, haven’t even got into growth yet, or maybe you’re just getting into the growth stage of fire. And so what we start looking is that incomplete combustion. Well, that’s when you’re getting all this big, thick, heavy contaminants, all these big soot and and combustibles that are are landing inside your building. Those are gonna be a different clean than a dry smoke. Synthetics, so during this this one dispute, we had people talking about it was a protein fire. They were talking about looking for for smoke webs. And because there was no smoke webs, that meant that there was no fire. Okay. But we’re not talking about synthetics. We’re talking about protein. There will be no smoke webs in a protein fire. Smoke webs are a sign. It’s basically the molecules that are becoming energized that then link together, and they create these webs. You’ve seen them if you’ve been in the industry long enough. You’ll see the smoke webs. That’s a a sign that you have a synthetic. If you have a synthetic, you have a wet smoke. If you have a wet smoke, you have four to six times longer to clean. It could be longer than six times or longer than four times. It’s just gonna take you long, and you have to figure out what type of job am I looking at. Synthetic combustibles generally are wet smoke. There’s a really strong pungent odor. Why? Incomplete combustion, you have that particle. The particle is bigger. It’s got more charring inside the particle. It’s not fully com combusted. It’s got a strong odor. If you walk into a building and you’re like, hey. That’s a pretty light odor. It may have been a dry smoke, not a wet smoke. Does that make sense? Is that helpful for what you guys are doing? If I start smelling a strong odor with not a lot of, signs, I’m probably thinking I got bigger clean than I I should, that I can expect. So that’s how I would start gauging this. The larger particles are greasier. So, wet smoke will have a a smudge effect to it. It’ll come off kind of like that greasy, oily, particulate. You would have seen it. Now you could still HEPA vac it. You should pull it off the surface as opposed to spread it. Your goal is to HEPA vac that stuff off and try to get it down so it’s not doing damage to the surfaces, and you’re not embedding that greasy material into fabrics or into the materials you’re trying to clean. K? Alright. The smearing, which is every adjuster or homeowner comes in and wants to smear that that oh, what let’s see what it looks like. Well, when you do that, you can do the smear test, but that smear is starting to push that particulate into that material. And we got dry smoke. So dry smoke is from a hotter burn. As a general rule, the the fire burns really well. If you were to look at a bonfire, just use a bonfire and and one source wood. If you were to do a bonfire where you put a piece of wood in, if the wood is just getting started and you’re starting to burn, you get all this smoke that comes off the wood. When the fire gets really going, there’s almost no smoke. It’s a very light smoke. There’s a lot of oxygen going in. And if you were to take a leaf blower to your fire where there’s a little bit of smoke and just put a leaf blower on your fire, all that smoke is gonna disappear because you’re gonna heat up that fire, and all those cooler edges that are burning a little bit colder where they’re smoking are gonna then combust, and you’ll have a clean fire. So that’s why you’re seeing a nice clean wood burn usually has a lot of oxygen. Take that into the house. All of a sudden, you have a large fire. Chances are you’re probably dealing with a hotter burn. But with fires, it’s kinda like a drying chamber. As you walk through a house, let’s let’s say in this picture here, we have one room that was really intense. So that one room’s fire was really hot and the fire spread to another room. That other room might be a cold smoke. And so maybe you’re burning some synthetics at a lower temperature. Some of the house is gonna be that wet greasy smoke, and some of it’s gonna be a dry smoke from the high intensity. Where the high intensity is, probably you’re doing more remove and replace as opposed to cleaning, if that makes sense. Okay? So, typically, I’m gonna say you’re gonna find more cleaning in the greasy fires because that’s where you have more incomplete combustion. Alright. A dry particulate. You’ll see this with wood. Wood ash is dry. If you were to vacuum it up, you’d almost leave nothing behind. Whereas if you were to look at, like, a sap, if you ever burned a sap, it’s it’s it’s a residue. That would be more like your greasy your greasy burn. Protein fires is the one that’ll trip up everybody. And so far, I’m gonna say this is probably sixty percent of the fire damage that I I I dispute or I’m an umpire or I’m an appraiser on. About sixty percent of them are protein fires because they’re done wrong. And they’re just flat up hard to do because visually, they look like there’s nothing there. So when we look at a protein fire, this is a special case. This this usually gets restorers into trouble because everyone walks in, and the biggest thing they’ll do is they’ll do this. Yep. Nothing here. Yep. Nothing here. Nothing here. Look. There’s there’s nothing. It gets treated like it’s a dry smoke fire. And when you deal with this, this is an oily residue that’s left behind. Your what type of combustion do you have on on a turkey or a chicken or chicken soup that’s burnt? What do you have? You have an you have an incomplete. You have an ignition fire happening. You have the most incomplete combustion happening. So you’re getting the biggest particles that are coming off of that. Your combustion products are smoky, not fire, so it’s cold. The residue is an oil or grease. It’s fats. It’s proteins they’re burning off, and those create an oily substance. So when we start to look at this and we say, well, what are we actually, running here? Well, we’re looking for a clear yellow brown or pinkish, hue on on surfaces. A little particulate of of protein is gonna have a massive amount of odor. Your your oxidizers are not as effective on this. So going in just saying, hey. I can’t see it, so therefore, I’m gonna hit it with an oxidizer. They’re not effective on it. One of the other things you run into is that the texture is tacky. It’s greasy. So you might see it on a wall. If you took we’ll get in the the cloth test. But if you took a cloth and you wiped it across the surface, would it show up on your on your cloth? Well, with that grease, it might not. You might need to put, an alcohol on it to to attack that greasy substance so that you can get a sign on a white cloth. Is that the best way? Well, you have odor, so you already know you have a problem. After about twenty four to seventy two hours, that greasy tacky texture changes, and it turns into more of a shellac like material. It hardens. And when it hardens, it becomes harder to clean. So the longer you leave a protein fire to sit, which a lot of times you’re getting in discussions with adjusters, it now re it requires more elbow grease to get rid of the the odor and the contaminant because it’s gone to a harder surface. So that becomes much more harder than even a wet smoke. Does that make sense? Have you guys done a lot of proteins where you’re where you’re trying to get the odor and you’re like, no. I’m losing this one. Right? That is super hard to get to. It’s because the odor is is a natural odor. It’s got the properties of it’s easier to clean when it’s fresh. It’s harder to clean when it’s old, and you can’t see it. Like, you’re gonna have to clean everything. And the problem with that is every adjuster goes in thinking this is just a light damage. No. If you were to look at the smoke, smoke particulate could fill this room. You couldn’t see across the room. Smoke dissipates. You won’t see any really residues on anything that they’ll just be covered in that protein y smell. And so those contaminants, have to clean. You have to clean everything. It’s as much as a big fire. If you had a synthetic fire with lots of plastics, it would be the same thing, but you can see the plastics. Does that make sense? That strong pungent odor is what you’re gonna be trying to deal with. And the problem that we’ve seen is that restorers will put copious amounts of oxidizers in and create other problems trying to get to an odor that’s not really that impacted by an oxidizer. Ozone’s better than hydroxyl, but it’s still not your number one choice. Your number one choice is just remove it. The most effective removal is physical. It’s not hydroxyls. Hydroxyls you put hydroxyls in, you are oxidizing everything but what you’re trying to oxidize. So get in there. It’s elbow grease. It’s it’s again, what are we doing? Hey. We’ve got this contaminant. It’s got a really bad odor. The only way to remove it is for us to clean it. So there’s gonna be a lot of cleaning on this bill. If we don’t clean it, you’re gonna be replacing items, mister adjuster or missus adjuster. That’s the discussion you have at the beginning. What’s the agreed level of clean? It’s a detailed clean. How are we cleaning things like books that are holding odor? We’re replacing books. So we watched I watched the entire building of paper materials be left where they took things that were like fabrics and said, hey. The fabrics have to go to a dry cleaner, but the books were left in the building, and they couldn’t figure out why the smell was there. You didn’t get rid of the odor trapped porous materials. So that’s where they run into problems. Proteins are super hard. And then because we treat them sometimes, like, they’re a dry fire where it’s like, hey. We’ll just get in there and do, like, a light clean, put some equipment in. Those were the ones that usually lead to more problems, and then they reoccur. The building heats up, the humidity heats up, and all of a sudden you get that smell back. It’s because you never cleaned. And so you have to clean if you wanna get the protein odors gone. That’s where the adjuster cut the scope and said, yeah. The you know, there’s no physical damage. Only the rooms with carpets are getting a detailed clean. The rooms with hardwoods don’t need one. Alright. Well, you just failed. Like, you literally are gonna have problems going forward. Hey. The contents need a light wipe. No. The contents need a heavy wipe because we have a greasy surface. You’re gonna have to use your fire cleaners on there. You’re gonna have to run ultrasonics on there, not just give it a cursory wipe like you’re doing dishes. No. This is a this is a hard clean, but it just doesn’t look that way. And so when it doesn’t look that way, people then take it for granted and go, hey. Protein fires are cheaper. Protein fires are expensive. Don’t kid yourself. There’s no physical damage. There’s just a ton of cleaning. K. There’s a couple things that are coming up. I thought we would have these published by now. They’re they’re held up in a review process, and and as part of the development process. You’ve got this new standard coming out, the s seven hundred. So that’s for professional fire and smoke damage restoration. What is good about this is this is gonna finally put some some guardrails in place for you so that when you’re doing your fire and fire restoration, you’re gonna have sort of the same best practices that come out of the s five hundred built for fire. So we’re gonna have some supporting documentation you can take to adjusters to say is as a professional restorer, these are the steps I need to take. As a professional restorer, this is how I’m documenting the job. It’s gonna help you with some of those guardrails. What is it also gonna do? It’s gonna expose some of the things that are are there. Use of oxidizers before you clean. That’s an emphasis that’s in there. Documenting, photo documenting, documenting your loss, identifying your scope of work. All of that is gonna be, more emphasized in communicating with the adjuster. So you’re gonna see the same thing that we do with water, now done with fire. The problem or not the problem. The challenge with this is there’s another standard here, which is the s seven sixty, which is a standard for professional wildfire investigations and restoration of impacts on structure, system, and contents. Now this is a little bit different. This standard covers the wildfire, and the smoke that goes down range of a wildfire will impact buildings and some of the contaminants that come along with that. Now those two standards may have some conflicts, and that’s why they’re they’re sitting in limbo here. They may have some conflicts where the fire standard committee did things that were a little different than the than the fire damage committee. So you got the wildfire committee and the fire committees that maybe did things from a different approach. And and so you’re gonna have two standards that weren’t written by the same people. It’s probably a good thing because it allows us to have conversations after these two are released, then we can come back and compare the two and and put it into the real world and see how they apply. But you have a standard for wildfires as well now, so you’re gonna have some guidelines on how to approach wildfires and something to support you as a restorer. So these will be important when they come out. I’ll let you know. These are a big deal. I think these are are a good change for the industry, and we’ve we haven’t had them. So it’s been the Wild West of fire. Alright. Where are we sitting here? Surface testing. We are emphasizing surface testing. So in the s seven hundred, this is something I think every one of you should do when you get to a fire is see what you’re dealing with. And there’s a few ways you can do this. Now I’m gonna show you pictures. The pictures I’m showing you are from losses that the restorer has already claimed that they have cleaned, and then we did some testing to see how things were. So you have a sponge wipe test. On here, this isn’t conclusive. All you’re doing is taking a sponge. You’re getting a controlled surface. So let’s say it’s a one foot by one foot surface. It’s it’s the same test in every room that you’re gonna do. You’re gonna grab your sponge, and you’re gonna run your sponge across the surface. And you’re gonna do, let’s say, a horizontal pass and then a vertical pass. So you’re effectively on that sponge and that surface area, you’re getting two feet of coverage. Right? One square foot horizontal, one square foot the same square foot vertical. In two square feet, you end up with a sample like that. Is that surface clean? Well, it has soils. We don’t know if they’re fire contaminants or not. But if the surface had been cleaned, I would not expect to see soils there. So I would say the surface was not clean. Right? When you do your initial sponge test, you can go over and show that you have a soil level like that. And because you have odor of smoke in the room and based on all the information, there was a lot of smoke in the room, we’re gonna clean the surfaces. Your next pass of that sponge on that same sample area should be a clean sponge. Does that make sense? That’s how you can use in the real world. It’s not scientific. There’s definitely smoke there. There’s a soil. But because we know we have a smoke contaminant, doesn’t matter whether it’s dirt or combustibles, we’re gonna clean it till it’s clean. You wanna document those test results. So if you’re documenting that, you wanna go in and actually show what’s happening. Here’s another one. This was a table lift. I was told that the entire basement was clean. We had a smoke odor, and we had some some VOCs that were impacting the occupants. To this day, that was two thousand nineteen, twenty? To this day, they can’t go back home. So it’s four or five years later, maybe even six years later, and that home is still vacant. That’s the contaminant that came off the pipe. So this is a tape lift. Nice thing about the tape lift is you could put the tape under a microscope and look for the particulate. So you can take a a digital microscope with you that you can plug into your phone. You put it on a table. You put your slide in there, and then you’ve got a four hundred I think it’s a four hundred zoom microscope that will hook into your phone so you can use your phone’s display and look at the particulate and see if it’s dust or fire or what are you looking for there. You can send those samples off to a lab. Again, if we have a smoke smell and I have a contaminant that comes off the pipe, they don’t really need to come in and determine if it is a contaminant. I’m cleaning that entire area because I’m cleaning the surfaces. I’m just validating that we have some kind of contaminant there. And then we can send it off for testing. I could talk to the adjuster. Say, hey. We’re gonna send this off for testing if you want it tested. If you’d like to save the cost on the testing, we’ll just clean it like it is fire. What would you like us to do? And let them make the determination of how they wanna spend their money. Right? That’s how I would work with an adjuster on that one. The white cloth test is another restore type of test. It’s an indicator. It’s a visual indicator. This, fireplace was cleaned multiple times. This house was cleaned actually three times before I went in there. And inside that fireplace, I went and did a white cloth test. Now I didn’t do a a square foot. I literally looked and went through a lot. In here, you can see where the edges are on the brain in here where the edges are. That was all not necessarily from the fire that happened on-site. It happened as a result of they didn’t clean the combustibles that were previously there. So if I have preexisting soils and I had a fire in the in the building, the preexisting soils could be carrying the smoke smell. They should have been removed. And the fact that they weren’t means that the building didn’t get a detailed clean. You might do ghosting. So if you walk into a building and you wanna see what’s there, my baba smoked in her house. And when we when when she passed away, we opened up the the pictures. And when you took the picture frames, you saw ghosting. This is this is common for smokers’ homes that you’ll see ghosting, but you’ll see it in other residents. Why? We have a particulate flying over during a fire, and it’s got some velocity. Now it’s microscopic velocity, but it’s gonna impact the surface of a painting and stick to that. And that that velocity or that traction bonds with the painting. That’s what the ghosting is, is you’re seeing it where the particulate’s not transferring into that wall. So that’s where the ghosting appears is the smoke is just bonding to the painting. Sometimes it’s really prevalent and sometimes not. What you could do is you could do a on the bottom where the ghost is, where the brown is, you could do one of your wipe tests there and then go up to where the painting was and do a wipe test up there to show the difference. And you could say, well, this is the wall where there was no painting, and here’s the wall where there was a painting. Do all your cleaning practices, and then show the go show where the wall was where there wasn’t a painting, and the after where there was a painting and show show the differences. Great physical demonstration that you did your job. Should you be paid? Yep. How many people show this? Next to nobody. So if you’re trying to get paid, why did you put four hundred hours of cleaning into this building? Show it. Show it. You have a sponge. You have white cloth. Sometimes with the white cloth, put alcohol on it. Right? Get get a a surfactant sorry. Not an alcohol to to debond the grease from the wall. So it it picks it up and attracts it to the the fabric. That’s what you want. So that’s how you can apply these tests to your your real world. Alright, guys. We’re gonna jump into a question period. I thought we had one earlier, but I guess I forgot to put the slide in earlier. Yeah. We’ll jump into q and a. And and, Kristen, what do you what do you got for us? I got a ton. That’s that’s why you should put a question period in before. Okay. So, how do you convince adjusters that hygienist reports are necessary for fire and smoke projects? So two things. Why are you ordering a hygienist report on a on a fire? Generally, as a rule, you’re worried about the contaminant. Something burned in the house, like house fires. So the argument that you’ll find from adjusters is firefighters don’t get tests on houses. The reason why firefighters don’t get tests on houses, they assume it’s a hazardous environment and successful chemicals and other things. They don’t test every house. They test chemical factories. They test smoke down range because that will impact a larger public. But a firefighter assumes that the house has high degrees of chemical contamination. As restorers, you would justify a hygienist not from the standard. So the fire standard or the s five hundred will say, hey. You should take us a a test to determine how to clean. A fire justification for cleaning is health and safety. We need to know what we’re dealing with in order to do a proper risk assessment. Most restorers don’t do a proper risk assessment for safety at the beginning because if you did, you would say we have a contaminant of smoke and odor, and it’s unknown what the origin of it is or it’s unknown what’s in that smoke and and fire. We should have a hygienist do a test. Now am I a big fan of hygienists on tests? No. Where you don’t have to if you’re gonna do a full clean, but there’s a good argument to have a hygienist on a test. I would just assume that we’re gonna go in. Now here’s why I I would make the counterargument. So I’ll give you both arguments because I I I could go either way on this one. You could put a an a hygienist on a job at the beginning to test what contaminant was there when you got there. And then after you’re done all your cleaning processes, you could put a hygienist on the job to determine how clean you got it. We don’t know what contaminants were there before the fire, but we do know what was there when you started, and, hopefully, you have a diminished severity level when you’re done your cleaning, and that’s that will tell a story. There’s another argument from restorers that would say, we don’t need a hygienist. We know there’s a contaminant there. Our job is to clean. So if you do a thorough detailed cleaning, then when you’re done cleaning, you have an odor. If that odor is gone because of cleaning, then you got it. If it’s still remaining there, you’re gonna apply your odor control techniques and make the odor go away. The problem with testing is that the testing isn’t necessarily conclusive. It’s just a it’s a mean. So your your olfactory sense is not necessarily mine, but olfactory sense is your sense of smell is gonna be I think it’s ten times or a hundred times more effective than a chemical test for a VOC test. Your nose will have more sensitivity than a test we do. So if you don’t smell smoke, chances are that VOC test won’t show anything that’s smoke related. Now there might be other chemicals that have no odors. So that would be the argument that because we can’t smell all the chemicals, maybe that’s when we would do a test. And I’m the standard leans a little bit further away from testing based on the disputes I go to. Now those are the worst of the worst. I lean a little bit more into testing. But either argument you could make is that as a general rule, we restore, we clean, we remove byproducts of fire, and we leave the homes in in a mostly sanitary condition. You could make the argument that you should do a test at the beginning of every fire so you know what is there. You know how to protect yourself. And I think that’s your biggest argument is that there was some stuff that required I’ll give you so I’ll give you the actual argument for the testing. A house that we had done that was oxidized, so not fire related, but you could easily get the same chemicals fire related. The oxidization processes caused us caused a a chemical to be formed, and the chemical was chlorine chloride methylene. I believe it was chloride methylene. It’s got a zero PEL. So you there’s no permissible exposure limit. In that structure, there was a six parts per billion exposure. The proper way to enter that home would have been with an SCBA. Give you the perspective, this house never had that chemical six years ago. When we when when this this file was going to court, they did a test, and the test had this chemical come up. When this chemical was discovered, I went, there’s no PEL on that. There’s no permissible exposure limit. Literally, for the homeowners to go home, they would have to go home in a scuba suit. SCBA, full tire rep. That’s crazy. Never I never suspected that was gonna happen, but that was could you find that in a fire? Yeah. And East Palestine, the East Palestine fire would show you that those bad chemicals, what were they? They were the, it was a polymer, chemical. It was, like, twenty five thousand gallons. I forget the exact chemical. But it’s a causing, chemical. That could be in a a structure as well. We have things under your your sink that could get when they burn, they’re gonna cause chlorine to be released and other nasty chemicals. We’re probably in a has more hazardous environment more often. There’s an argument that when it cools, it’s it’s safer. Show me the test results that show that, and then I’ll believe you. I think we from a safety perspective, I would argue it is that it’s a it’s a worker safety issue, and we’re gonna test so we can PPE upright. And that would be your your most your strongest argument. Your second strongest argument would be then I need to know what chemicals to use to clean it if it can be cleaned, or do I have to remove the material? That’d be your next strongest argument. Good question. So I think at the beginning, you had mentioned a a fire loss that you were on. So a question came in that said on that particular fire loss, if the adjuster had not inspected the roof, why were you the only party responsible financially? I’m trying to think of the so I’m I’m I’m you if you’re the only one that didn’t try to think of the the context of the question to to the the event. Could you repeat the question? Yeah. So it said on that particular fire loss, if the adjuster had not inspected the roof, why were you the only party responsible financially? So so you’re the expert. So if a if a adjuster goes in now I’m I’m I’m gonna maybe butcher this because I’m I’m not pulling the exact correlation here. So I’m gonna I’ve got one, and the reason why is I got a slide where I got some fire damage. Ask me in the come back to this question. I think I’m talking about the job in the future that I that I I’ll show you. Come back with this question and stop me in the middle of that discussion if that person’s question is being answered. I wanna make sure I get I I’m seeing that it’s about the senior home. Oh, so why why would why was it the contract? Because we’re responsible. Like, the adjuster’s not gonna do an inspection on it. We went in and did all of our shitty processes on it. We were like, oh, we’ll make the smell go away. We’ll just deal with the odor. We didn’t clean it. We didn’t remove the materials that were affected. It was in the insulation paneling. So it was it was trapped in between the layers, and we just were like, you know what’s cheaper? Let’s not take the roof off. Let’s go seal it in, and let’s do a bunch of stuff. No. We we made decisions. The reason we were responsible is we made decisions that the insurance company is writing checks for, and we didn’t give them options. If we would have said, hey. There’s an option to so it’s communication failure. Okay. So going to that one, we went in and said, you know what we can do? Is we can seal the odor into the roof. That wasn’t necessarily the right option, but we we gave it to them, and and and we may not have even given it to them. Actually, I I think what we just did is said, hey. That order is not a problem. We’ll just seal the roof. Had we said you can tear off the roof and deal with it properly, or we can attempt to seal it and make the odor go away, And you may have to deal with an engineer to say, hey. Are those trapped contaminants gonna cause a problem? Is it gonna corrode fasteners faster than than expected? Let the engineer sign off on it. In that case, we just did the work. And when the smoke smell returned, it’s trapped in there. We’re holding the bag because we had given them a like, probably, like, an eight hundred thousand dollar invoice to do that type of work. We didn’t tell them that there was another option. So it it it’s it’s that I didn’t give you enough information on the on the situation of why we were holding back. Thank you. Chris. So another question came in that says we tend to get a lot of kickback on the fire mitigation portion of a claim. For example, they always fight us on the HEPA vac, and dry soot removal, ice blasting, framing, encapsulation. Any thoughts on this? Is there a standard fire mitigation process for soot removal? So it’s removing the contaminant. Again, when we communicate the contaminant removal, our goal is to remove the contaminant. Our goal is not to seal the contaminant into the wall. The one, the product isn’t rated for it. So so the way we were sold smoke sealers, if you read the label, it says it needs to be applied to a clean, dry surface. If it’s got smoke contaminant, it’s not it’s not clean. Why? Because they’re not the product doesn’t work on smoke contaminant. It doesn’t work on smoke particles. It’s sealing the wall for anything that you couldn’t get, not the stuff you should’ve got. We see that all the time. I see adjusters. They’re like, hey. It’s it’s there there’s visible smoke, like hand smears or where people were, like, walking, checking the wall. There’s visible smears. And they’re like, yeah. Just seal it in. No. That’s not how the product is designed. It requires a clean surface. So you go back to the communication of when we come in, we’re removing the contaminant. If the contaminant is on framing, we can sand or we can blast. That’s how we’re gonna remove the contaminant. If you say no, don’t do it, I go to the homeowner and say it it’s it’s really don’t get into the confrontation. At the beginning, you tell the homeowner and the adjuster, the goal is we’re removing the contaminants from the fire here. We’re removing the things that shouldn’t be here because of the fire. Do we agree? Yes. Once we agree, when we get in that discussion about framing, are we ice blasting or sanding? Because we are removing those contaminants. That that is our job. If they come back and say, hey. Don’t clean it. Just smoke seal it. I can’t. The product label says that’s not how it is, and it could bleed through. Could it bleed through? Depends. Did you put enough on? Should you be trapping a contaminant up against the wall? Are you actually cleaning it, or are you just leaving it? Would that be like that would be like taking a a cat three sewer backup and just spraying a sealant over it and saying leave the cat three behind. The reason why is our fire standard hasn’t caught up. So the first version is gonna be a some a helper to get us to where the water standards are now. It’s got a few revisions to get there. But, yeah, that’s that’s where your pushback’s coming from is is just poor communication. Not not even poor communication. It’s just not setting the expectation of what needs to happen on the job. Most restores and fire, it’s been by feel. Yep. I think this is good. No. It’s a process. You’re gonna go in. You’re gonna remove the materials. Is this heat damage, smoke damage? And you walk through it. It’s just the the longer answer is there’s, like, there’s there’s how did you set up the job communication? What are your processes that you’re gonna deploy? And then how do you communicate all that? There’s, like, a whole bunch that goes with it. The short answer is is you have to set the expectation. The long answer is there’s, like, a whole way that you get there, but, yeah, we don’t have time for that. Thanks, Chris. So, we did have a question come in about, protein fires, actually. And they’re wondering if warming the surface would help with the clean. It might. You know what? So so it’s that’s interesting. Is is it it actually, that makes a lot of sense. Well, if you were to look at it like fat, if you were barbecuing and you pull it off, it stays wet. Like, it stays in a liquid form for quite a while. Even when it’s cool, it still stays in a liquid form, but next day, it’s hardened up. Heating it up might make your effort easier. Actually, I I like that idea. I I I’d have to give that a try. It would make sense to me that it would make it easier to clean if it was hotter. Now what temperature do you gotta get it to to soften it up? Is it ninety Fahrenheit? And then you’ve got a working heat condition, but but I still like the idea. I like like, some of it might be chemicals. Could you get, like, a you’re just using a degreaser. And with the degreaser do work, it it just might take a few more, you know, a few more passes to get the degreaser to do its its job. Kinda like if you were if if you wanna look at it, put in a barbecue burn some meat in a barbecue. Put put a piece of metal in a barbecue like a butter knife, and then burn burn your meat. Like, just let her cook. And that that barbecue experiment would let you know how to play with it because that’s effectively what you’re doing in a barbecue is you’re creating a protein smoke. And if you do it right, you you’ll get the same result. So how easy is it to clean metal tongs that have been exposed to the heat and and the barbecue? It’s harder. It’s harder when it’s cold. It’s easier when it’s warm, so you use warm water or hot water. You might be using insulated gloves instead. Actually, go into your heat. Use almost like a boiling water, and then use a insulated rubber glove would probably be your best way of getting the best chemical action because your cleaner is gonna be superheated. Your skins are protected, and then your cloths are heated for that, you know, thirty seconds. Probably a better way. I like it. I’d like to, yeah, play with it. Let me know for sure. Yeah. Great question. There was a question actually that was entered into the chat, and there was a few people interested in it. So I wanna make sure I ask it. So it says, I have a question about tear gas. Does this fall into the fire and restoration? I have a recent claim, and this is a new one for me. If anyone has experience with it, clean with cleaning and writing off content. Yeah. So tear gas is, there so so tear gas is a dry powder. And so you you would handle that similar to if you were doing, like, drug lab cleanups, it would be similar to dealing with the powdery substances. So you can vacuum it. You’re gonna be in full PPE, probably a PAPR. You don’t want any of that getting in because you are gonna have a rough day if it does. So you’re gonna wanna have a higher level of protection on your on your your workers. We’ve done a few of those. We’re gonna do a dry cleanup in porous materials, carpet. Yeah, you’re gonna throw that out. Kind of it’s one of those ones because it’s such an irritant. You’re when in doubt, throw it out. It’s gonna be applied. When you deal with, like, OC spray or or, like, pepper spray, you’re dealing with, like, greasy liquid, but but tear gas is a is a is a powder. I did I haven’t done a ton of them. I’ve done a couple of the SWAT entries when I was in Vancouver. We had some houses that were owned by by gangs that we we restored, and, and we had to do some some when when the doors were were knocked in and and the gas was sprayed, or burst into there. You you would you would do it that way. It’s just a it’s a clean process. Go in, scope your loss. That shit’s everywhere, by the way. Like, when it goes, it’s everywhere. So, like, every porous surface is probably a vacuum, and then you might be just tossing stuff. When in doubt, I I’d say throw it out with with that. Oh, and I saw I just saw someone put that there’s oil based. So water activates it. Cleaning is impossible. Yeah. If if you got oil based on fabrics, chuck it out. Oil based on solid surfaces, you can clean it. You just use a degreaser on it and and go hard on on the cleaning on solid surfaces. But porous stuff is just like, why why you don’t bring it to your shop. Why would you do that? So it’s it’s throw it out. Just economically nonrestorable. Awesome. So how do you know when clean is not sufficient for smoke damage and the material must be removed? So porous materials such as wood, drywall, flooring, etcetera. Yeah. So if you do the process right and and we’ll get into the odor control. When you do the process right, your olfactory senses so, like, I’m not the best. My sense of smell is not very good, and it’s desensitized to this. But as a general rule, females have a better olfactory sense. And then if they’re pregnant or they’ve got a highly sensitized individual that can has a, like, super sense of smell, you will find that they will smell things that I can’t smell. And that’s fine. That’s it’s it’s subjective. So someone comes in, like a homeowner comes in and they say, hey. I smell smoke, and you’re like, I don’t. Okay. Where do you smell smoke? Let’s let’s use their nose to trace it because there is people with with a higher sense of of smell than than others. We used to say it was psychological. There there’s we there’s more testing out there that says there’s more people sensitized to chemicals now that there’s it’s probably not true. Like, psychological smoke is probably the exception. So I I’m I’m probably trailed off. I probably didn’t answer the question at all. How do you know when it when it’s clean? It’s it’s olfactory, and then it’s did you clean? Like, did you clean every inch of this wall? What what’s interesting is you can’t see my ceiling, but it’s it’s it’s a it’s a texture. There’s jobs when we go in where you see the textures, unpainted texture, and the texture hasn’t been touched. And so they’re like, we cleaned everything. Well, you didn’t clean the ceiling. Oh, no. We wet cleaned everything. You definitely didn’t clean the ceiling. Like, the texture would peel off. It would absorb water. So what do you do there? You scrape and retexture the ceiling. So some of it you can clean, some of it you can’t. We just sometimes go in with, like, superhero mentality saying we can clean everything. You need to test clean stuff. And and so part of it is just you have to do a thorough cleaning. A lot of times, it’s just incomplete cleaning that leads it to us. But I go back to those tests. After you’ve done your cleaning, you did a pretest of what contaminated look like, and you did a posttest of what you’re left with. And if you have any odors, track them down. Is it the carpet? Is it under a baseboard? How deep do you go? Depends on the pressure. Is it in hardwoods? Was it a hot fire where we had velocity and thermal dynamics at play, or was it cold fire, like protein fire where the smoke’s just gonna settle onto the items? It’s not gonna penetrate super deep into it. It it it really depends on the type of fire you have. Good question, but, like, there’s a there’s a lot to that one to unpack. What words should we use instead of pre loss? I I would go to an acceptable condition. So an acceptable condition, is gonna vary. If the drywall is heat damaged, the pre loss condition is you had drywall. We’re gonna put drywall back. But the acceptable condition is new drywall. So the insurance company would say, well, what was the pre loss? Well, they had drywall. Okay. So the from an insurance policy, the thing was pre loss. It’s it’s a drywall painted walls pre loss. For you, the acceptable condition is not fire damaged drywall that we paint over or heat damaged drywall we paint over. It’s new drywall with paint. Right? So I would turn my terminology to the acceptable condition, and then you could say the acceptable and agreed condition. And the acceptable condition is drywall that’s been exposed to high heat needs to be replaced, and so we’re replacing it with new. That’s acceptable. And that’s acceptable to the adjuster, and that’s acceptable to the homeowner. If it’s not acceptable to one of them, the homeowner is the one that’s gonna sign your your promise to pay, and the adjuster’s either gonna reimburse the homeowner or they’re not. We get wrapped up in what does the adjuster think. I don’t really care what the adjuster thinks. If I’m dealing with a homeowner that can afford to pay it, a millionaire let let’s let’s take money out of it and just say, money doesn’t matter. The the the homeowner has more than enough money. What do you want me to do in your home? So you as a homeowner could pay my bill. It doesn’t matter what my bill is. The adjuster wants to leave all the damaged heat damaged drywall in the house, but what do you want me to do? Take it out and put good stuff back in. Okay. That’s what we’ll do. That’s how you gotta look at your jobs, and then it’s for the the insured and the adjuster to to figure out who’s paying. But your job is to say, I can’t leave damaged drywall. Heat damaged drywall is not the same as it was originally, so I would use the accepted and agreed condition. Because we could we could agree that your mural was heat damaged. We could also agree that we could only clean it to a certain degree, and we could leave it in place. That would be the acceptable condition that we’ve agreed to. Does that make sense? It’s it’s it gives you more control if you use that terminology. Like, you literally as a restorer are now in control of heat damage drywall is not acceptable. It’s not safe. It’s it it’s not the way it is. It warrants a replacement. Who’s agreeing to it? And and that’s how you would position it. So you take pre loss completely out of your terminology and be like, it drywall, and we’re putting drywall back in. Or it was hardwood, and we’re putting in carpet. K? What’s better? Is it a betterment or is it a a lesser degree replacement? It’s worth less. Okay. The insurance company should sign off on that. A betterment, the homeowner will sign off on the difference. It’s it’s you’re a contractor for all like, if they have a small water damage, you’ll bulldoze their home if they want you to. That’s what a contractor does. We just are tied in really close to the insurance company so you have that conversation. Yeah. Great answer. That’s how I would approach it. Do we have time for one more question? Yeah. Yeah. Yeah. Okay. I found this one kind of interesting. So they said we had a job where the painter said the sponge test was not acceptable and needed a yellow white test, which they couldn’t really decipher what the yellow white test was. Yeah. So Chris? So my guess is is somebody has a little bit of knowledge enough to be dangerous. Not really. No. The the only one like, I’ve never heard of a yellow wipe test. I heard a white cloth test. One of the wipes that you could use is you could use, like, a baby wipe or Joe Myers was saying, I think it was Rhino Wipes. It was, like, maybe the industrial man’s version of of a baby wipe. But you could use a a wipe that has a surfactant in it, and they’re wetted, and you could do a wipe that way. But the sponge the sponge test is a good test. It’s it’s it’s a electrostatic charge that goes across the surface and picks up contaminants are on the wall. All it is is an indicator. That’s all it is. So it doesn’t matter if it’s sure. You want me to use white instead of a sponge? Cool. Does it is it white? Is it dry? The whole thing that you do when you do a test is the same sample size. So on a wipe test, it’d be about a one foot by one foot square. And as long as you do a one foot by one foot, you’re gonna get a pretty good indicator. What what happens is you’ll get adjusters. Let’s say that this was their their cloth, and they’ll do this. Yep. Nothing’s there. Okay. I could take the same cloth and go well, look. Something’s there. You just set the standard, and your standard is one foot by one foot. And that’s the standard you’re gonna use. Now on a protein fire or a really light fire, maybe you would bump that up. Maybe you would do a two foot by two foot because your think of your test size as the sensitivity level of your test. If you increase the surface area, you increase the sensitivity of your test. So in a in a moderate to heavy fire, one foot by one foot is acceptable. In a really light fire, maybe you’re doing two foot by two foot because you’re trying to determine a more a more sensitive area. You’re gonna need a bigger catch size on your test. That makes sense. Now as I saw one one comment that the the IICRC says if it can’t be cleaned, then it has to be removed. That’s not necessarily true. It’s true from a from a okay. It’s true from a standard side is that if it can’t be cleaned, then you you you basically say you could replace it. That’s kinda true on a porous material. That if if if odors have got in there and you can’t clean it, then then it has to be removed. But if it’s stained and so there’s no odors. It’s just stained. It’s it’s visually not appealing. It may not have to be replaced. Like, that’s an insurance function. You’ve cleaned it, but it’s it’s stained. Let’s say that that that smoking has stained the paint. You clean the smoke residue off the wall, but there’s a there’s a stain to it. It’s clean, but it just doesn’t appear nice. That’s an insurance discussion. If it’s a private job and the homeowner says get rid of the smoke smell, you wipe it. If it’s permeated into the paint, you might have to seal it. If it’s not, it just looks bad, but it’s it’s the contaminant is gone. It’s kinda it just the way of looking at it, it’s it’s not that hard and fast. Like, the IICRC says this. It says that. It’s not that hard and fast. You’re dealing with people and people’s property. As a general rule, if you can’t clean it and it’s contaminated, you’re removing the contaminant. So you might remove contaminated drywall. That’s the professional restorer’s way of doing it. If the homeowner says leave it, then you’re now saying you’ve accepted a lesser condition and probably some waivers are being signed and and but it’s it’s not that hard and fast. It’s it’s a good rule to have for technicians, but it’s not that hard and fast because it is depending on what if I’m the homeowner and I say, absolutely not you’re doing that, guess what? You’re not doing it. Same thing with throwing things out, people. When we throw people stuff out, like, hey. That’s fire damaged in it. I’ve gotta dispose of it. No. You do not. That is their stuff. If you throw away the kid’s first toy that, you know, grandma and grandpa gave them, but grandma and grandpa passed away. And you don’t you say, no. I can’t give this back to you. That’s not your job. Your job is to say, I can’t give it back to you in a sanitary condition. I can give it back to you. You can keep it in whatever state you want. It’s just not sanitary. You don’t have the authority to throw people’s stuff out. Like, that’s not your job. So just be very careful on taking a class and and applying it to to real world. Real world is they they own the stuff. I just called you in to see if you could clean it. And if you can’t clean it, give me my stuff back. If I claim the insurance company for replacement, the insurance company will say, hey. You’ve gotta get rid of it before I give you a new one. But those are all just discussions and agreements. They’re not hard rules. Does that make sense? Like, we we don’t live in that in the real world in in a textbook classroom, we live in that world. In the real world, you do what what they what the customer wants, and you you just have a discussion around it. Alright. Let’s let’s go on here, guys. We’re gonna jump into the next one. How confident are you in the quality of your detailed preliminary report? So in here, it’s very confident. We rarely get pushed back. Somewhat confident. We sometimes argue over scope. Not confident. All our fires seem unique. We struggle at getting out good reports, and I’d rather not comment we’re learning. And that’s fair, guys. Any of those ones are are fair. Again, you answer. No one’s gonna see your your responses, so you guys can be free to answer at will. I’m seeing somewhat confident, not confident. Some some I’d rather not say is. And and here’s the thing. I I’m gonna say it used to be said that water damage was was a science and and fire damage is an art. I I I’m gonna say that that that terminology is probably changing as we go forward here in the next five or ten years. I think you’re gonna see fire damage is gonna become more of a science as well. It just the fire departments and the fire industry firefighting industry has started to put a bigger push on it, and I think you’re gonna see that it’s gonna come into our industry probably in the next five or ten years as, as some ways of thinking take place. Alright. Let’s let’s give everyone a chance to answer that, and then let’s let’s let’s end that. Alright. So we got a lot of very confident. We rarely get pushbacks. That’s good. The seventeen percent of you that are are sending in good reports or are doing a a big documentation. Somewhat confident. We sometimes argue over scope, and that’s normal. It can become less normal if you’re starting to talk about what your goal is. So our goal is to remove heat damaged material and remove the contaminants of a fire. Our goal is to dispose of porous materials and try to assess semiporous materials and clean nonporous materials. If you start talking, changing your language, and setting real goals, the homeowner is on board with you right from the start. Hey. All that stuff, like the the the mattresses, the pillows, we’re not gonna try restoring those. Those are gonna go for replacement. We could try restoring them, but we can’t get into the fabric if that fire was that intense. Intense. Plus you breathe and and and live around there, so any cleaning chemicals we put on your mattress, you’re gonna be breathing in for eight hours a day. Just better for us to replace that. If it was something light, you might say, hey. We could do a HEPA vac in and the light clean. And and if you’re good with that, we’ll keep your mattress. All of those things are part of the reporting process. Eight percent, we’re not confident, and five that said we struggle with getting good reports out. What’s interesting is what is a good report? So are you helping the adjuster make the coverage decisions? And so we’re gonna talk about that in this section because this section is important that you understand where this goes. So when we look at field documentation, we talked at length about using pre loss, but field documentation is great because you’re showing the job before you put any tools in. If you’ve sat through any of the water damage trainings that I did, with �Թϲ�����, we basically set went through and said, hey. Before you put any tools on-site, before you do anything, take preexisting photos and make sure your field documentation is tight. What you’re doing is you’re setting the tone for what you had to deal with when you went in. Now it might not seem that important when you’re trying to get paid or in a normal claims process. It gets exacerbated when you get to a legal process, and now you have lawyers and judges eyeing your work and saying, well, hold on. You’re saying that that there was all these concerns, but your report says nothing. And so that’s how claims managers or claims VPs look at your files, and that’s how they determine whether you’re getting full pay, partial pay, or are they referring you to their legal department because they think you defrauded them. Normally, restorers are trying to do the right thing. So let’s just say that the vast majority of us are trying to do the right thing, we’re helping people at their time and need. How did you document the job, and how did you communicate that? And you assume because we know what we’re doing in fires that the adjuster knows what they’re dealing with when we send the paperwork in. Don’t make that assumption. Just because they do a hundred claims a year, you don’t know if they were doing a hundred or two hundred or a thousand claims that were auto. And now all of a sudden, they’re sitting in a fire desk, and they’re getting fire losses, they’ve never seen one. Like, don’t assume that they know anything. Assume that they know nothing. Because if your report writes to someone who knows nothing, if you ever go to court, to a judge, to a lawyer, to, an umpire, an appraiser, they’re gonna read your report like you knew nothing with so much detail that you answer all the questions. So what questions do we answer? What were the overview photos like when you got there? What were the preexisting conditions? What was there when you got there? How was the shape of the home? The two terms that we didn’t spend time on, but cause of loss, source of loss. Cause of loss is an insurance term. Source of loss is a restoration term. In fire, the cause of loss was a bird’s nest in an exhaust vent. The source of loss was a puff back from a furnace. The source of loss was plastic synthetics that burned. A TV burned, you know, electrical fire and wires burned, wires, drywall, and the entire main floor burned, that’s gonna be your source of loss is what are we dealing with. So don’t get stuck on cause of loss. Cause of loss determines if there’s coverage. Source of loss determines how we restore the building. So I’m gonna focus on the sources like, hey. There was chemicals in the sink that where the fire took place, or the kitchen burned, and we have a lot of plastics. That I would consider as part of our source of loss or the resulting damage that was was was burnt during the fire. Then we have evidence of byproducts of combustion. So I’m gonna document where the smoke soot has gone. Where would I find that? Well, I could find it in attic hutches or attic openings. Why? Usually, it’s hot or cold, and there’s a temperature differential. In the winter, if you have a fire in the winter, the absolutely first place I’m gonna go do a check is the attic opening because it’s cold air above, and we’ve got hot air going to a cold surface. And normally, it’s not really sealed. So you’re gonna find a ton of contaminants that form around the attic openings. You’re gonna find a lot of contaminants around the windows, around doors. Wherever it’s cold, you’ll find some some evidence of of byproducts. When you come in and and we watched an adjuster, I was on-site with an adjuster. We’re in a room, and a window is right there. And the adjuster goes to the inside warm wall and does a wipe. And I’m like, hey. Why don’t you why don’t you test that window right there? No. No. I got this this wall. I’m like, no. We should test the window. And the window was absolutely covered because it’s a cold surface, and that’s where the smoke residue is gonna go. It’s gonna bond to the colder surfaces. Was there any on the wall? Yeah. But not as much as on the window. So that room went from questionable to absolutely covered. These are some photos of a of a house that that burned. I wanna draw your attention to a couple areas here. On the exterior, you’ve got this metal roof. You’ve got some some smoke that’s come out of a window here. Right? What else do we see here? Right? So you’ve got an exterior that looks pretty good. You have no physical damage. You have no discoloration on the on the roof metal, a little bit out the window, so you’ve got siding. Now what where potentially is this gonna tell me that I need to look? If I’ve got fire damage or smoke signs of smoke here and heat, am I potentially have soot trapped in behind the vinyl siding on the exterior? Do I need to deal with the exterior contaminants? Yep. If I’ve got particulate trapped in the wall, I’m gonna check this wall to see if we have to clean behind here. Why? There’s a source of odor that’s down inside this wall. Up here, we’ve got where it looks like water has run down. Do I potentially have a particulate that’s in between the vinyl and the wall? Yes. So we’re gonna investigate that. I’ve also got some some soffit damage in here as well, probably from the firefighters checking for it, maybe from the heat. Inside, you have overview photos. So when you do your overview photos, typically, you enter the door and you go left to right. Click, click, click, click, click around, and then I would take a step across, and I would photo this. I want three hundred and sixty degree photos. You’re gonna deploy three sixty technology into your your fire losses. It’s gonna tell an entire story. I want the resulting damage. I wanna show that the fire caused all this damage. Why am I replacing the wood in here? Why am I throwing out contents? Why am I dealing with the floor? Why am I going down like, why is my scope the way it is? And you should have an answer for every why. Why are we replacing the floor? Because there was fire contaminated water underneath. Cool. That’s a good reason. Why are you cleaning the floor with with ice blasting? Because there was particulate that was there. Okay. And it didn’t clean with a HEPA vac. Okay. Justify it. Hey. We were we were ice blasting it anyway, and it was a light ice blast to get the sheathing clean. K? Just go through and justify your cleaning process. We could sand or we can blast. If we sand, it’s gonna take longer. If we blast, we’re in and out. This was the cause of loss. Now in here, the cause of the loss was a a a paper basket with some kindling. Notice which way the door opened. So when they opened the door, the spark from the fireplace went into the kindling basket, lit the kindling basket up. These walls had just been given five coats of of of clear coat, and they went up like gasoline. The homeowner was home. He was actually sitting on the couch, and he said, Chris, this thing went up, like like, literally, it was on gas. He goes, I ran to the kitchen to get a pot that was cooking macaroni, and I came back in, and my entire living room was an inferno. And he got out, and he had smoke inhalation because he tried to fight the fire with this pot of water. He’s like, I just gave up. I had to run out of the house. His causal loss was a spark that landed in there. What was the source? Well, the source was everything. Like, we’re cleaning everything that burned. We have a source that’s this synthetic material. So I’ve got synthetics that I’m dealing with. So it’s not necessarily gonna be written as, like, the source was a fire basket. That’s a cause. My source is what is I what am I cleaning? I’m cleaning synthetics. I’m cleaning natural materials. I’m cleaning fuels and oils and other things. In there is where it burned. That’s the source of loss. If we’re sitting there going, is it the source? Am I gonna say, well, you know how you like with water? You go, oh, the source is a a clean water tap, or it’s a supply line. Okay. Did it sit for five days? Because now your source is a category three. Here, your source is what? A wastebasket? No. It’s everything that burned. So you’re gonna identify the different things that burn there. Insulation, wood, you know, stains, a whole bunch of chemicals in there that that burned. What about the kitchen? You have plastics that were on the kitchen surface, stained wood. All these plastics burned. You got a lot of soupy stuff in there. Like, this is a chemical soup. We walk into it thinking like, oh, it’s just wood that burned. No. It’s everything that burned in there. So now how are you gonna treat it? Does this wage the the conversation? Should we have a hygienist come in and test? Maybe. We’re gonna remove a lot of the solid contaminants. We’re gonna get to the floor. We’re gonna take the flooring out. We’re gonna bring this thing down to a stud, and we’re gonna ice blast a HEPA vac. You could make the argument we should do a test before, do a test after we’re done. I’d be okay with that argument. I think it’s a good argument from a a legal perspective. There’s a liability to that that if you didn’t clean properly, your your test results are gonna show it, but it just means you have more cleaning to do. So you just don’t set yourself up for like, hey. When I say it’s clean, it’s clean. It’s like, we’ll clean, we’ll test, and then we’ll determine if we need to clean more. I think that’s reasonable. Is that where you wanna do it? It’s it’s it’s right now, it’s not written in the standard, so you have preference. But here’s all the things that you could come in and document. Overview photos, preexisting conditions, this cause and source of loss. The source, would document all the things that burned or or could have burned. So plastics, chemicals, I’m gonna document all that. That’s what I’m trying to clean up. Resulting damage to structure, so cabinets, drywall flooring, trim, insulation, electrical, we’re gonna like, that’s the damage we’re gonna document. Resulting damage to contents. Heat damage to contents. You ever seen carpet when it got heat damaged but not, like, not fire damage, but it’s crusty on the top? That’s heat damage. K? Well, we’re gonna replace that. If you’re putting air filtration devices in, why are you putting AFDs into a building, or why would you put a building under negative pressure? Primary thing would be particle count. I’m trying to make it safe for workers, and I can put a an engineering control in, which is an AFD, and I can reduce the particle count. You guys are any of you guys using particle counters right now on your fire jobs? You guys know particle counters? Let me go get one. You’re gonna wanna take a look at this. So if you’re if you’re in doing fires, you actually, if you’re using AFDs on water damage or otherwise, you should consider getting a particle counter. So a particle counter will allow you to figure out the particulate level that’s inside a building after a fire. You can take the particle counter just like you would a thermal hygrometer and put it at the back of your air scrubber and see what how the air is coming through. Now it should be coming through ninety nine point nine seven percent clean, right, or because you’re going through the HEPA filter. But when you look at it and you and you’re running it through, if you have a high particulate count in the building and then on the end of the scrubber, it’s been dramatically reduced, you document that. What is the air scrubber doing on a job site? Hey. You don’t need air scrubbers. How many times have you heard that? You don’t need that equipment there. From a site safety perspective, you sure as shit do need it there. And the reason why is we’re taking care of a a contaminant. We’ve got respiratory condition or respiratory hazard, and the engineering control we’re placing in is a is a HEPA air filtration device. And we’re gonna put enough of them in to reduce our level, and you should determine what the level is. Are you reducing it from thirteen thousand to five hundred? Are you reducing it from a hundred thousand particulate count down to to two thousand? Even if you show that you reduced it from a high severity to a lower severity, you justified your AFD. If I reviewed your file and I saw that you actually tested rather than just say, I’m putting it in, okay. And what did you how did it look tomorrow? Oh, I tested it again like I did a dehumidifier. You now have justified your AFDs. If there’s a firefighter that’s, a firefighting activity in there and they put water in, is there humidity control? Did you stabilize the job? One of the questions came in. If I remember correctly, someone asked the question, how do you deal with mold on a fire loss when mold’s not covered? Okay. There’s a few things. If you’re doing a fire clean and you have the humidity level there, are you cleaning mold or are you cleaning a fire contaminant? So if you say I’m doing a mold remediation, you’re probably not there. But if you’re removing the fire contaminants that have mold, you’re literally just doing a fire clean. But if that’s the concern and the homeowner your discussion with the homeowner in your area is, hey. Insurance companies don’t pay for mold. We should stabilize the the job until a decision is made on how we’re gonna proceed. Where that doesn’t apply is when there’s a fire investigation going on. You probably can’t set up anything in the building, but you could ask the fire chief or the fire investigator, hey. Could we take the humidity levels down and put in or pull out dry air into the environment? Would that impact your investigation if we did that? Sometimes they’re gonna say, hey. You know what? We got the information we need. We just wanna spend more time on-site. No. You could dehumidify the the air. You just have to talk to them and communicate. They might let you. And if the homeowner agrees to it or a homeowner requests you to do it, you’re now doing humidity control, stabilization in a contaminated environment. All of that’s justified. But the AFDs, there’s your justification. Show show some science. Tell them where you’re at. Tell them what you’re trying to do, and tell them that what your goal of getting it to. We’re at thirteen thousand. We’re putting in this many AFDs because we’ve sized the the job for six or seven or eight air changes per hour. And then we’re gonna reduce eight air changes to per hour to four once we get it to where we wanna be. And we’re looking to be under two thousand particles on the counter on the three micron, whatever your your goal is. Cool. That’s what you’re doing. That is your engineering control. That is an OSHA backed respiratory hazard elimination. I think you’re probably pretty good. That’s justified. Saying you need AFDs just for the sake of saying AFDs, nope. Very hard to justify. Evidence of byproducts of combustion, we talked about that. There’s your different samples. The other one, move furniture and and then pull fur furnace filters. Pull a furnace filter, put it into a bag, keep it. That is your justification that the ventilation system has been impacted by whatever the loss was. If that if that filter needs to go out for testing, you have it. Just keep track of the stuff you’re doing. Building code authority. So I’ll tell you that I actually work with building codes. We’ll just call, like, a building inspector in and say, hey. We’re dealing with this issue. What do you think we should do on the rebuild? Or or pay our electrical with compromise with some water. What’s your thoughts? I’m not the expert. They’re the ones gonna pass this. But if I call them in to inspect my job while I’m there, guess who I’m not like, they’re not coming after me. We’re working with them. So their their goal is to help me get the building back to condition. I call building code inspectors to the job site and say, hey. Give me a hand. What do you think we should do here? I think we should replace it. Yeah. You’re gonna replace it. Oh, guess what? An authority having jurisdiction that just said we’re replacing it. No longer my opinion. So work with the professionals that you’re working with. Now I’m looking for safety. If they say it’s safe to leave, cool. Sign off and tell us not to replace it. We’re good. I’m not making decisions. That’s the goal is to not make decisions. Engineers. If an engineer says they’re doing something, have them sign off on it. So if they say that you can do a engineered trust repair, okay, but then they have to sign off on that repair. You should be getting them to to put that information in writing. Typically, they’re gonna write a report. If the report says you need to do a b c d, you do a b c d exactly as you’re told. Their stamp takes the liability of that repair, and then they should be coming to inspect it after. Just make sure you’re not the one making the call, like, on trusses or floor joists. Those are engineered systems. It’s not your job to say, yes. I think you can support the weight of the house. Let the engineer do it. OSHA, how many of you I’m looking at the chat right now. How many of you have called OSHA on yourselves? Show of hands. Anyone call OSHA on themselves? I use this tactic on a job when the adjuster told us we were doing something that we had to work in a crawl space. It was a two foot crawl space, and they wanted us to belly crawl in, belly crawl out, and and to do all the restoration work underneath. I said, no. We’ll we’ll take the floor up or we can lift the building. And we got punted from the job. But before we got punted from the job, I called our Oh and S and asked them if they could come out and tell us how to properly do it. And I said, here’s my two work scopes. Which one would you choose? And they said, well, I think the floor coming out was probably the better way. And I said, I agree. Well, when that when we got punted from the job, the homeowner was surprised. When OHNS came back to the contractor, it was belly crawling in the in the building. They got a visit from our OHS. They got punted from the job. The homeowner called us back. We took the floor apart. We do set things safe. So you have this organization who’s about safety. We treat them as an organization we want to avoid. You can partner with them and have them do checks in your business. So we had a really good relationship with ours. They helped us on an asbestos loss that an adjuster decided to take a shortcut on removing flooring. And so the asbestos contaminated the entire building. I had the emergency responders, police, fire, ambulance out at scene. We bubble suited everybody up, sent them in, got everybody out of the building. The building needed to be cleaned. It’s a hazardous contamination. Oh and s said, did you have a shower? I said, no. It was minus forty. Okay. We understand why you didn’t have a shower. You shoulda had a shower. I responded in four hours. We’re good. Work with Oh and s. Have them help you with with some stuff in your business. Don’t be afraid to ask them questions. Because you have an industry that is telling you that, hey. There’s no specific regulations that apply to you. You fall under a lot of the other regulations, the general duty clause, construction safety standards. Follow those and work with your OHNS or OSHA. Absolutely. One hundred percent. Yeah. Whenever they design safe yeah. Absolutely. That is that is one of the best things. They are not the boogeyman. Like, I’ve not had a bad experience with them when I’ve gotten trouble because of doing some stuff that we shouldn’t have done. Warranted. We didn’t get fined because they had a relationship with us. They knew we weren’t trying to be that company. So, yeah, hang out there. And we’re gonna take a break here in a few minutes. So I I see a question. We do two breaks. There’s a break coming up now, and then we’ll have another ten minute break shortly. And, and then we just push to the end. These are the other ones. So these are the other standards that you could be using. And then you got ASHRAE, NADACA, IICRC, ASTM. Great standards to refer to. This is why I’m doing this test. I’m gonna do a concrete test in alignment with ASTM standards. I’m following the IICRC standard. Here’s an interesting thing. You’re held to what a reasonable contractor would do. So the standard is if you don’t have the certification, the standard you’re held to is what would a reasonable restorer do. If you were doing fire damage and you weren’t trained in it, are you screwed if you go to court? No. If you follow the standard but you’re not certified in it, they would say, is that what a reasonable restore would do? If you’re certified and you don’t do it, they would still hold you to the same standard. So certification is not the determining factor whether you do a good restoration job. It’s it’s that having that training and certification helps, but you’re held to the standard. And same thing with ASHRAE, ASTM, NADACA. Alright. Sensitized individuals. These are people in Marty King’s fire guidelines. You would have seen this. The RA had a fire guideline, and it was interesting. It says sensitized individuals in when you deal with people, a process for fire or flood restoration should not be a detriment to the occupant. So just because you can do something, like, just because you can degrease a wall doesn’t mean you should degrease a wall if the chemical that you’re gonna apply is gonna cause a detriment to the the individual. Sensitized individuals are people that you may have to work around. And here’s the perfect example of a sensitized individual. Or sorry. Let me give you the argument. An adjuster says that person is lying about their sensitivity. And you say, maybe they are, maybe they aren’t. Or you’re like, yeah. I kinda believe they are. The the silicone oh, not silicone. What is it? The gloves. Latex. The latex gloves. If you have a sensitivity to latex gloves and you put one on, you might get a rash from it from wearing it. Now I don’t get a rash, and everyone else on our team doesn’t get a rash, but you get a rash from putting your glove on. Are we gonna tell you that that rash is is psychological, that it’s not real? No. You’re sensitized to latex where nobody else is, and that’s a normal material. That’s not a fire damage. That’s not a chemical. That’s just a normal everyday material, but some people are allergic to latex. Now that allergy could be so severe that they can’t wear the glove. They can’t even touch the glove or be around it. Okay. They might not have such a bad allergy that they can’t even be in a room with it. So the idea that we would say, hey. That sensitized individual is lying. It’s latex. Like, ninety percent of the population can wear latex, but that ten percent can’t. What’s the chances that those fires have chemicals that might impact somebody else? And you’re like, it doesn’t bother me. Okay. Good. You’re not sensitized. Don’t chalk it up to these are psychological issues. These are our problems. Sensitized individuals exist, so your goal is to work around that sensitivity. If we had latex glove issue, we’d put in a different type of glove. Right? We’re use the nitrile gloves. That would eliminate the risk to the latex sensitized individual. On every chemical that you put into a building, you should have the homeowner sign off on it, and they should also do a sniff test to see if they if they have any allergies to it. I’ve had customers that reacted worse to the cleaning chemical than they did the actual loss. So the cleaning chemical is not the option then. And if you put it in, you’re actually doing more damage. Does that make sense? You’re responsible for your chemical use. Just because you have it doesn’t mean you can use it. So one of the things is what happens if we can’t clean? Well, if you don’t have a cleaning solution, then you have to go to replacement. Is the cost gonna go up? Yeah. But that’s how you deal with a sensitized individual. You might have to use lower no v VOC materials. Is there a higher cost to that? Yeah. But you’re gonna price for it because you have a sensitized individual. Does it make sense? These are are things just that’ll trip you up. Okay. Fire health hazards, you’ve got you’ve got respiratory corrosion. Inside some of these fires, you’re gonna have things like sagging pipes. So different types of pipes that get in there, PVC from upholstery, pipe conduits, blinds. Now burning PVC creates a hydrogen chloride and a fos what is it? Phosgen? Phosgen? But you’re looking at these different chemicals that are being produced, and we walk in sometimes without our gear. And then you tell the adjuster that this is a hazardous environment, but every photo has your guys without wearing respirators. Every job is a respirator job until you know that it’s not. That’s that if you come from the OSHA side, it’s a hazard and risk until you know it’s not. And so then you could potentially say then we would put a hygienist on and test. And once we know what we’re dealing with, we’ll we’ll we’ll wear the proper gear for the for the chemicals. I think that is a reasonable and prudent argument for why we need it. When you start to look at fires, you get all these different chemicals that are being formed. So in there, you got ammonium, formaldehyde, benzene, carbon dioxide, hydrogen cyanide. All of these hydrochloric acids all present or could be present in a fire. How are you actively working on this? How are you actively, cleaning this? What cleaning process will take care of these different materials? Chances are your one general purpose cleaner doesn’t do it all. It might. It might do a pretty good job. Does it do it? I don’t know. Can you mix them? I don’t know. Right? We don’t know what you’re you’re dealing with. So you wanna read the SDS sheets on some of these chemicals. We’re gonna jump into risk management. This is a big one when you start looking at, like, assisted living facilities, especially when you get into it. Condos, multifamily, homeowners associations. Right? You get an HOA involved. That’s a liability for you. Hospitals, elderly care. All of this is is happening. Joe had Joe Myers had a nursing home where thirteen nursing homes wanted to build clean rooms, and they ended up putting their COVID patients in the senior homes. And then they they built these clean rooms, and they wanted to use, you know, certain facilities where they they wanted to run the ventilation system a certain way. And they had all these crazy ideas, and and and it eventually killed some some of the occupants. You don’t wanna be a part of that. So when you’re walking into these types of of events or jobs, you wanna make sure that you’re protected. You wanna make sure that you’re not doing work you’re not capable of doing or you’re not trained to do. Hospitals, health care, all have high high high risk occupants. So all the high risk occupants means that you’re gonna have to apply higher levels of care in those environments. Does that make sense? You’re you’re effectively walking into an environment where you have immune deficiencies. People have, you know, sensitivities, allergies, heat sensitivities, you also put a respiratory particulate in the air. You got different ventilation systems that are designed certain ways. You don’t treat it like a residential structure. You just can’t. So you have to have that training, that knowledge when you move into them. But risk management is taking jobs that you’re qualified to do or hiring consultants that can work with you on those technical jobs. Alright. I’m gonna follow-up here, and then we’ll take we’ll take some questions, and we’ll take a Insurance companies, you just gotta think about this in a a different perspective. So I want you to understand that insurance companies don’t own the home. They literally take a premium and say for this year usually, it’s a year. From this date to this date, we insure that property. And anything that bad happens in this contract, we’ll insure from this property. What’s interesting is where I live, if we have a wildfire and your insurance comes due in July or June and there’s a wildfire within it would be sixteen, eighteen miles from your house, you cannot get insurance. They will not insure your house during the wildfire season. So you need to get your your insurance policy dates into the winter. Like, you don’t want a summer date because if you have a fire close to you, your house will be uninsured until that fire is gone. So insurance companies will also maybe not renew your insurance if you have a fire that’s close to your house. Like, your policy date comes up. They’re like, yep. We’re not renewing. So you wanna make sure that you have that coverage. Well, that insurance company is only covering you for a period of time. Remember that the homeowner or the the company you’re dealing with to get paid, that insurance company has a temporary right to to pay pay losses while they’re getting paid a premium. The homeowner owns the entire house. And so homeowners can do whatever they want to their home. They literally could bulldoze the home down if they have small water damage. I use that as an extreme example, but what you’re looking at is the homeowner will give you the direction because they own the property. If they had no insurance, you would not deal with an insurance company. You would deal with a homeowner. The restorer is not obligated to restore the job. So in the IICRC, you’re taught you must respond as quick as possible to reduce the severity of the loss. That’s true from a technical standpoint. It is not true from a business standpoint. You will not run into a job until you’ve done a proper assessment. You’ve done a site safety assessment. You’ve done a contract. And then once you are guaranteed you’re getting paid or feel comfortable you’re getting paid, do you start to take action? You are not gonna go running into jobs and just start restoring stuff and hope to get paid. That’s not how you run a business. And so you’re not obligated by the law to respond. You’re not obligated to follow any regulations of the insurance carrier. You’re responsible to do the job of a contractor, which is get to the job, determine if it’s a job you want, do up the contracts to determine that you’re gonna get paid, and then execute on that contract. If it takes a week for that contract to get signed, whatever resulting damage happens, it’s either between the insurance company or the insured to pay. Not your problem. Okay? So you just gotta look at it from a slightly different viewpoint than the IICRC. Your goal is to minimize the severity of the loss as fast as possible, but not at the detriment. Alright. Let’s do questions, and then we’ll keep moving. Sounds good. So I got you all. I saw just saw a comment from Neil. I I love that quote. We’re we are the professionals who should lead the way through this process. Hundred percent. Hundred percent. K. Sorry. Sorry, Kristen. That’s okay. So how can we justify stabilization cleaning on our estimates? Also, when would stabilization be needed and not needed? Sorry. Can you repeat the first part of that question? Yeah. So how can we justify stabilization cleaning on our estimates? Yeah. So so it’s it it’s a communication with the adjuster. You go ahead and do it, and they’re like, yeah. We didn’t really wanna do it. What did you do? You provided a service to someone who didn’t want it. We’re kind of in that that business where, like, hey. But we saved you some money. Okay. How about we have the conversation with the adjuster and say, hey, mister adjuster. I can go in and I can preclean all the taps and faucets and try to save it. You find out the homeowner doesn’t want those saved. They’re like, no. Replace them. Maybe you should talk to the homeowner and say, hey. Can we get in here and try to mitigate and, like, save your faucets? I’ve had customers where they had, like, twenty five hundred dollar, bathtub faucets. They’re like, yeah. You can’t get them anymore. Save them. So we went in and specifically attacked them. If they’re a Walmart special or, like, a Home Depot special, probably not gonna spend a ton of time saving them because they’re probably not worth it. But it’s the it’s that’s the communication. You look like a hero when you go in and you say to the adjuster, hey. Can we can we walk the site? Or if they’re not if they’re remote on a fire, hey. Can I send you some pictures? I got some I I’d like to try doing some savings for you to save the taps, the faucet, the countertops. Would you mind if I preclean those just so that we we can mitigate the loss? If I don’t do it, they might get etched and give them the risk. Right? You’re selling the job. If I do this, I’m gonna save you money by doing that. If you just go do it and then they get the bill at the end, they’re gonna be like, yeah. I’m not paying you. This is like, you need their approval. So if it slows you down, who cares? Okay. So you lose some other things. Okay. That’s fine. That’s part of the process because the insurance company gets to adjust the claim. They get to approve the how they spend their money. It’s not your money to spend. It’s not the insured’s money to spend. It’s their money to spend. So help them spend it. Give them a justification for spending it. And then for stabilization, if not for stabilization cleaning. For stabilization, if you have high humidity from a fire truck, hey. I’m gonna prevent secondary damage from going to the unaffected parts of the building. So I’m not gonna let condensation go form where it shouldn’t form. We should put dehumidifiers in. Hey. What did I do? I grabbed my thermal hygrometer. I took my readings, and we have a high humidity problem. We’re gonna have a mold a risk of mold. We can mitigate that. We just need to stabilize. Now depending on who you’re dealing with, if it’s an insurance adjuster, the adjuster you telling them in writing that there’s a high humidity that’ll lead to mold and you can solve the problem might prevent the homeowner from getting the exclusion of we don’t pay for mold. Well, you should have paid for stabilization, and you chose not to. So you address it and you provide a solution to a problem. It would be very hard for an insurance carrier to say, no. We didn’t pay for stabilization, and we’re not paying for the mold damage either. Okay. Do you have an exclusion for not stabilizing? And so, like, it leads to a different fight, but it’s not your fight. Your fight is just to tell the homeowner, hey. I can actually prevent this mold, and it might not be covered by your policy, but the mold definitely is not covered by your policy according to your adjuster. Does that answer the question? It’s it’s it’s more communicating how you you approach the job site. Just set up the negatives. Like, there’s a whole there’s a whole there’s a whole philosophy around how do you sell fire damage jobs and how do you approach the loss from start to finish where you you allow the adjuster to know all the risk. You allow the homeowner know all the risk, and then you get them to your scope of work. And and you gotta walk them through it. And it’s really just communicating it. But, like, if you don’t do this, this bad thing will happen. If you don’t do this, this other bad thing will happen. And if this bad thing happens, it may or may not be covered. Like, that’s a real conversation to have. So with water you use to put out the flames, do all the walls need to be removed because of the trapped water or soot? So it’s a great question. You could you could make the argument that contaminants are there. How do you test? Well, you can’t. So it kinda treat it like a category three. There’s no there’s no downside. Now with with fire when there’s so so here’s the thing you run into. The fire the water is technically a category one. It came from, like, let’s say, a sanitary source, and then it hits a contaminant. Not technically a three, but I would I would class as a three. We’re gonna treat it like a three. It’s got contaminants from the fire. So they’re not biologicals, but they’re synthetics, and the standard has language that would would allow you to to treat as a category three. Wet category three materials are coming out, and then we’re gonna wet clean the surfaces to get the, particulate off. Now if it’s fire, I might be ice blasting or we would do a soda blast. All those are acceptable cleaning methods for removing contaminant. So, yeah, I I would treat fireman’s water, like, just if you just wanna simplify it, just treat it as a category three, and that’s how you would approach it. Awesome. So if a structure has sat with smoke damage for an extended period of time, so, for example, two months, do the fixtures need to be replaced? It’s a great question. It depends on your humidity level. So as a restorer, if you get into one of those losses where there’s, like, that long delay, usually, there’s a there’s an investigation that’s taking place. And it so there’s two investigations that will take all the time in the world, arson and then the suspicious loss. So what they do is if it’s suspicious but it’s not arson so so they can’t prove it’s arson or they they suspect it might be tampering with some kind of system. Usually, it’s like an outlet that there’s an indication that the outlet had some kind of metal it shouldn’t have in there. Then they they do a financial background on the insured. So they tell the insured, before we go forward, we’re gonna investigate. And that investigation might look at their financial records to see if this was a financial fire, if there was a motive behind it, and then they start putting pressure on people. That delay is also pressure. So a fire happens and there’s a two month delay while the investigation’s taking place and then you get, you you get told to go forward, There might be corrosion based on the humidity levels in the building. If they didn’t control the humidity in the building, the severity could go up, and so you have it. You’d have to investigate it. Now are you skilled at doing it? No. But you could bring an electrical engineer in to look at it. You could bring an electrician to look at it and let them write a report to say, hey. Based on my professional opinion as electrician, these should be replaced. You as a restorer could make a recommendation that they should be replaced, but yours will hold less weight. You could make an argument that they’re pitted and you can’t clean them. That’s what I would write. If it was about functionality and safety, I would have someone else write it, if that makes sense. So I think we’ll do one more question. I know, everyone’s eager to take a break. So how would you go about cleaning an attached garage that wasn’t necessarily affected with the smoke and soot? Yeah. You you you get into a really good question there. You get into an attached garage, if that door was opened, and usually they are, and depending on the phase of the firefighting process so if they’re doing it when they’re trying to get the smoke out of the building and someone opens the door while the the if you ever watch a fire let’s say that you have a house, and at the front, they’ll put a a high velocity fan in and they’ll blow fresh air in to basically blow the smoke out and and get the house clear. If someone opens a door, that smoke will go into that garage. So it actually pressurizes the garage, and you’ve got contaminant in there. You would treat it just like the rest of the house. So you have to ask the sometimes you’ll see a fire report, or if you suspect that maybe the odor is a little heavier in the garage and you can’t figure out why, you would ask the the the fire chief or whoever was on scene. You you just call up the fire department and say, hey. Can I ask you some questions? And and it helps you build a relationship with the fire department so that you can move it to the next level. It’s like you’re you’re asking them, hey. During your operations, use those terms, during the fire operations, or did you guys open the door while the building was pressurized? Did you pressurize the building? Like, good questions to ask. Why? Because you’re blowing contaminants into parts that it would not normally have got to on its own. And that would then lead you to do a further fire investigation of your own of where would the smoke have been traveling. And so you’ll see these like, you’ll see smoke whisking from the toilet different seams. You can see where the pressurization happened, and you can see the the smoke that had come in through pressurized areas. You might see it around outlets. So if you see that, you you could ask the fire department, hey. Did you pressurize the house? Guess what? The damage is probably more severe for what you have to do is you’re gonna have to tear out more building than if they didn’t pressurize the house. Right? If it was, a cold smoke fire and they just came in and didn’t do anything. But if they were running a full fire operation, they probably had the fan running at the end. Your job probably got harder. So, yeah, I’d be asking those questions. And then an attached garage, clean it like every other room except for it’s got a ton of shit in there, and you gotta deal with it. Right? Like, there’s a lot of junk in there. You might have a different contents process. You might say, hey. Is there anything that you just wanna get rid of? And then you would write it off as, like, not not to be replaced. And so then they can settle with the insurance company as, like, an actual cash value settlement. That’s a discussion with the adjuster and homeowner. Like, hey. We’re gonna clean your garage out. Is there stuff you wanna get rid of? And if it’s reasonable, like, if the insured is reasonable, they’ll say, hey. I’m not gonna replace that item. I’ll take the cash. And so the adjuster and them can negotiate that. Yeah. It’s a good question. It’s it’s like every other part of the house. You might find that in in attics too. Right? The attic wasn’t directly impacted, but all of a sudden, you found smoke got into the attic, and now you have to remove the insulation so you can do your job. Let’s get into the four steps of fire remediation. This is something that I’ve I’ve changed my views on over the years, so I wanna share this with you. And and there’s a whole bunch of stuff that we look at. So we know water jobs are complex. And then when we look at a water damage job, there’s different things that you can consider. But all of a sudden, you have to add in all this. Like, if we’re looking at water, you do water. And if you don’t do water right where it sits, it can lead to mold. It could have preexisting mold there. We have lead as best as another hazards. K. Cool. But when you look at fire damage, the reason why fire damage, I think, is so much more difficult is you have all this that you have to pile on top of that. So water damage is really hard as a general rule. It’s like water damage and water damage restoration is difficult. Fire damage with water damage is a total different degree of difficulty, and we don’t necessarily look at it that way. The old way we used to look at is like, oh, I got my fire damage training, and I got water damage training, and I’m good. But your your degree of difficulty isn’t just twice as hard. It’s exponentially more hard because you got all these other things that you’re now factoring into your loss. So here’s what I wanna do. I wanna start this off with with a poll here from you guys. And in here, what percentage of your jobs do you place oxidizers or other older control measures on at the start of your jobs? And, again, your honesty is is not gonna be, recognized one way or another. Is yes, no, seventy five to a hundred percent, fifty to seventy five, twenty five to fifty, or zero to twenty five, or we dilute the air, but we don’t treat it. And what’s interesting is you guys are giving us a feedback. So this will dictate the conversation for the next, probably, fifteen minutes. And what we’re doing is we’re seeing a lot of people in the, in the seventy five fifty to a hundred percent. So so a lot of people there, and now the numbers are bumping up on the bottom end of that poll. And what’s wild here is this is how we go into jobs, and and I don’t think a lot of people talk about this in the right context of what are we doing. So in this section, I wanna I wanna break that down, and I wanna give that a proper discussion because I think you should look at it a little bit different than maybe we were taught. And it should help your business if you have this discussion. I think it’s gonna help your business in in what you’re doing. Alright. Let’s, let’s kill the poll, and here’s the results. Is it’s anywhere between zero and twenty five. Pretty even across the board is is it’s being done a lot on most jobs. Very few to few of you are not, not treating the area. You’re just diluting it. And that’s, I’m gonna say, how we were trained. The reason we were trained is like, hey. You have all this gear. You have all these chemicals. You have all this stuff you could put into the business or into a fire. But at the end of the day, what should you be doing? And I’m I’m glad you guys answered. This will be a good discussion. So the four steps of fire remediation is source removal, cleaning, deodorization, and then applying surface sealants. And what’s interesting is you can’t you can’t not clean the surface and do surface sealants. Even though that’s what happens in the industry, you can’t do that. That the the the product label says that’s not how you apply the product. But that’s sort of how the industry has evolved. Maybe sales reps have said, yeah. Yeah. Don’t worry about cleaning. Just spray it over. It won’t it won’t have an odor. It may not come out this side. It could go out the other side and then come back around into your building. So that’s why this that that theory doesn’t make sense. But when we look at the four steps of restoration, what you do is you basically come in, and you should look at the degree of effort. So this is how the degree of effort on your job should look. You should put a lot of effort at the beginning on source removal. We remove the source. We then clean the environment. Whatever’s left, we deodorize. Anything we can’t get the deodorization to work on, we maybe would consider sealing. And when we start to look at that, it’s like, okay. Well, what what makes fire damage different than, say, normal cleaning? And so what you do is you just put it up against like, it it was an epiphany for me when I went back, and I said, if I were to look at how we clean other things in our world, does this make sense? Because the way we were trained doesn’t make sense to me. We say it, but then all of a sudden, you’re presented with there’s, like, no source removal, like, technology. It’s all, you know, source removal, rip it out. Cleaning is is elbow grease, and then everybody’s got these deodorization products and solutions are selling you. And so you get trapped in this marketing hype. But if we were to look at bringing in, I don’t know, a dog and you have an accident on your floor, what’s your source or what’s your what’s your course of action? Your course of action is you’re gonna focus on source removal and cleaning the surface. You don’t come in and bring an ozone machine or hydroxyl in, and you don’t seal the floor after that accident happens. You remove the source and you clean. And you say, okay. Well, what happens when we get another example like garbage? Well, in a garbage bag, you remove the source. If the garbage bag were to break a leak, you’d remove the source and you clean. If it’s a really bad garbage thing, you might spray for breeze in the air. That’s the product they sell you and say, hey. That makes the odors go away, but you’re applying a chemical inside your building that’s just making the air smell fresh, but your real source is re source removal cleaning, then that that that odor counteractant, you’re just spraying it into the air. So when we look at fire, well, it changes. Why are we looking at fire remediation any differently? This is how you should be doing it. This is how you actually are doing it for the most part as an industry. We come in, and we deodorize. And we deodorize before we clean, we deodorize while we clean, and we deodorize after we clean. So we’re hitting this with a lot of chemicals and products and and call it a contaminant of its own that we’re applying to the job. We remove the source. We take the char out. Then we clean the surfaces, which might be dry ice blasting, could be soda, could be sanding, could be wiping. And then we get into what’s left do we deal with. And what’s interesting is this deodorization process is a lot. And if you don’t clean, how would you put this in a in a perspective? If you were to look at what’s the volume of odor when you walk into a brand new fire, It’s huge. How much oxidizer would you need to make that huge amount of odor disappear? A lot more. If you were to remove the source and shrink that level down and you were to clean and shrink that level down, how much deodorizer, hydroxyl, or ozone do you need to make this go away? That much. So you’re exposing the building to a lot more chemicals. And what we saw in some of the disputes I’ve been part of is that the hydroxyls and the ozone that’s being applied to jobs is actually being applied while you’re using chemicals that say do not expose to oxidizers. So your chemicals will say do not expose to oxidizers, and yet you’re running an oxidizer right next to the chemical. What happens when that happens? It breaks the chemical down, and you get adverse effects on it. Just grab one of your cleaning products off the shelf. The next time you’re out back, at the next break, just go grab a product. Read the label on your fire contaminant cleaner and see what your degreaser say. If it says you’re not exposed to an oxidizer and the first thing you’re doing is oxidizing, you’re already starting off on the wrong foot. The other thing is you haven’t found the source. So you’re not removing the source. You haven’t found the source of the odors, and you’re starting to knock them down. How are you gonna find the contaminant? Visually? It’s microscopic stuff that we’re dealing with that have odors on a microscopic level. Why would you knock the odor down before you start? So we’ve been told in marketing, hey. Knock the odor down. You make all the psychological smell go away. What if it wasn’t psychological smell? What if it was highly sensitized individuals that have a better sense of smell than us? We’ve been desensitized the smell. Now what you’ve done is you’ve gone and knocked down the contaminant smell. The thing that you’re gonna use to try to determine if it’s clean, you’re knocking that smell down before you started to clean. Why would you do that? Psychologically, I don’t believe I can’t remember somebody that walked into a house and went, wow. This this house smells like smoke because I saw it with smoke. Maybe, but I can’t remember a job where that happened with a homeowner. So I don’t think it’s as common. I think it was what we used to say was a legend that we used to have, which is, oh, they smell smoke. I don’t smell smoke, so it’s psychological. They must have been traumatized from the fire. I just don’t buy it because you just don’t see it. If we were to look at source removal, this is source removal. Removing insulation that is inside the building, taking burnt materials out, taking the debris that’s falling on the floor, that’s source removal. Right? If we were to look over here, how do we remove this source? Take all of that contaminant out of the building. What about heat damaged materials? We talked about this earlier. You’ve got heat damaged materials. So in a case like this, when you’re looking at this, what do we have for heat damage? Well, you got heat damaged drywall, some cabinets, some some roof sheathing. You didn’t see any discoloration on the on the roof on the other side, but here you’ve got on the sheathing, you got some discoloration. Trusses that are are scorched. Right? As we look up, you can see that, yeah, that that might be a problem. Do we have any of that debris that’s under that that, truss? You got a little bit of debris under that truss. Maybe you have some smoke trapped in between there. If I knock the smoke smell down and then I deal with that, but I don’t deal with what’s around the truss, how do I how do I properly mitigate it? So our seniors home, we didn’t even focus on it. We literally just were like, yeah. I think we could seal it in and just go. And we didn’t worry about smoke odor. It came back, and it was pungent in the wintertime when the humidity levels were high. When we look at ceilings like this, we go, okay. What else are we looking at? Electrical wires are heat damaged. Well, that electrical has to be replaced. Okay. Here’s here’s a poll that we’re gonna do. What would you do with this truss? If this truss is damaged with here, what are we gonna do? What would you do with the truss? And here’s your poll questions. You can clean it. You can seal it. You can media blast it. You can repair it, put a sister or a new board next to it, or you could just come and replace it altogether. So you got some replaces. Replace it with sister boards next to existing, media blast it, seal it, clean it. Right? You got a whole bunch of options here, and we’ll give you guys a couple more seconds to get that in. And while you’re answering it, I’ll see if we can throw up my slide. See if I can move that back so you can take another look at it. Right? K. So here’s here’s where we’re at. We’ve got a few people said clean it. There’s a few seal it, a few media blast it. So we’re, like, twenty percent say media blast. Repair it, sister bores next to existing or replace it. And, that’s awesome. We’re about two hundred respondents in. You could kill that poll for a second, but can you leave it on the screen, Kristen? Just kill it and and leave it on the screen. I’m just gonna move ahead here. Because and I don’t know how it looks for you guys, but I’m hoping it looks good. I’m gonna move my poll off my screen because I think there’s probably a box there. When we look at trusses, we’ve got this truss coming in. And so you get this the forces of a truss, these are engineered structures. They’re engineered to transfer energy. And so the the they’re carrying the load of the roof and the and what you see is that deflection. The load is coming in off the roof, and so these are engineered structures. They have a stamp on them, and that stamp requires an engineer to approve that these are still good for that load. In the past, we would usually just walk up and tack some boards together and be like, hey. We did a pretty good job. We we repaired it that way. But these carry liability. And so a trust is engineered to go into a building to do a specific job. It’s not engineered to be sister’d up with another board. That’s an engineer that has to make that call. There is I don’t know how many homes have things that we repaired without asking an engineer. Right? That’s just how we did it. So we took on that responsibility. Now here’s what’s interesting. I’m gonna pull pull forward one more time because I wanna talk about this, and I and and, Christine, you could drop that poll. I’ll I’ll come back. I in here, on this side, we have the we have the joist in here. Now here or, sorry, the rafters. Here’s what we’re looking at. You’ve got these gusset plates. These gusset plates have a low tolerance to heat. So the second that they get heated, there’s expansion that happens in the wood. The wood expands and contracts. Those gusset plates are a concern. Sometimes you’ll see in a fire, they come out, and you the old way used to be just go hammer them back in. No. Once they come out, that’s that system has failed. You are not a repairer of that system. In here, when we look at it, these gusset plates have heat damage. So that engineered system has now been compromised. You don’t know what the temperature is. All we know that we went from from an aluminum color to black or galvanized color to black. It’s got exposed to heat. That’s for an engineer sign off. The other thing we’re looking at is we’re looking at these trusses. And we used to come in and say, oh, alligatoring. No problem. Just as long as it’s a quarter inch deep, you’re good. We’re not qualified to make that call. We can restore it. So if an engineer says, yeah, take the char off and you’re good, cool. That’s what we do. But we’re not qualified as a as a restoration contractor. None of our restoration training qualifies us to that. So we’re going to go in, and we’re gonna follow an engineer. Now if I am looking at this, this would be a replace. We’re gonna take this out. We’re not gonna assist her to it. If an engineer says, hey. You can clean this. I would probably go with a media blast. I’m gonna remove the soot char and get into the the wood, and we’re gonna remove the surface of that wood. That’s gonna be our first thing. Now the other thing you have to think about is what heat was this exposed to. Is this a heat damaged member? So, yes, we can remove the char. Did the heat compromise it? And as a restorer, you can ask that question. You can say, hey. This was a high enough heat to put some char on here. Is the member compromised? In this particular case, this roofline, we replaced an engineer came through and said replace everything to the last member and one passed it. So the engineer actually went every member of this chart gets gets removed plus one. And I was like, okay. That actually makes kinda sense. Like, maybe it was exposed to more heat down there, and it didn’t discolor. But they went every every member gets removed plus one on each side. And so that’s how they repaired this roof. There was no discussion on on what we should do. There was no cistering. In here, when we talk about heat damage, we used to use the the the smoke line, and we would say this is the demarcation line of where the heat was. And that was incorrect. So that was the old way we were taught is, hey. This is the we we used to use the term this the heat line. Well, that’s the smoke demarcation line of where the smoke was the heaviest. And what you’re seeing in this picture is where where those nail pops are or where the screws are and where the studs are, well, those were cold areas. So what happened is that hot smoke bonded to the colder surface, and the the screw heads being colder bonded to it. Now there’s also potential there’s electrical charge in there that went to the metal, and you get some electrical bonding that happens there as well. Well, there’s a there’s a thermal dynamic at play, maybe an electrical dynamic at play. And so if you see the nail head pops, you used to say, hey. Well, that’s that’s where the heat was, so you you replace that drywall. That wasn’t scientifically there. There’s your smear of your wet soot. Someone’s decided to see if it’s wet. Yep. Still wet here. Still wet there. Now that’s more than likely that’s firefighters during the operation. So they’re smearing it around as they walk by, touching for surfaces. You’ll it’s common you’ll see this. If it’s a really heavy smoke damage, sometimes you’ll see, like, a hand. Like, as if someone just walked the wall. If it was really smoky, that’s how the firefighter is gonna walk the the environment during a smoke during the firefighting operations is they’re gonna keep touch contact with the right side wall. That’s how they’re gonna get into the fire. They turn around, and that’s how they’re gonna go out the fire. So it could be from that as well. But here’s an interesting thing. This came from I think it was operation or project Flashpoint sorry. Operation flashover, and this was a thermal imaging camera that they ran. There’s a video there. And what happened is they ran the thermal imaging camera, and they show up here. Okay. So you’ve got a little bit of smoke and heat up here. Oh, the smoke line is coming down. K? So that’s there. We can see the temperature in the three hundred degree mark. And then in that little picture in picture, you see the fire as it’s as it’s developing. And then what you notice in the last picture here, what you’re seeing is that’s the smoke line just above the couches, but you’re seeing that the temperature is over three hundred and fifty degrees on the floor. In the past, we would look at the smoke line, and then basically everything down, we’d be like, well, there was no heat there. And what this is showing is that radiant heat is going down into that flooring material and into the couch. And in the video, you’ll actually see the the couch starting to smoke as the heat started to off gas the the the the materials out of the the the furniture. In the real world, it would look like this. These chairs were exposed to real high temperatures. If you look at those lights in between the two chairs, you can see the lights have melted. And so this was, like, the smoke line and or sorry. The demarcation line is down at the floor. It’s like a foot off the floor, and you can see that there was high levels of heat coming down. That couch, you would think was smoke damage, but it’s actually heat damage. That’s that that couch has been burned. That TV was one of those old cold large plasmas fell over. It’s all melted out. So the amount of heat that’s come down from this from the ceiling down is gone past that that like, well past the smoke demarcation line. Or so you’re you’re seeing that, and you’re like, oh, well, then the heat must have got to the floor. Yeah. Everything in this house got torn out. But what you’re starting to see is there’s no correlation between a heat line demarcation line, sorry, of the smoke and where the heat is. You could have a high temperature heat in a very low area up up top doing heat damage to the bottom. So we our old senses of what, like, we thought was happening, not quite true. Lot more things are heat damaged than smoke damage in in a high temperature fire. If you look over here, that’s the arm. The I was the adjuster on this one. So I was the guy coming in going, hey. What do you think on this? But I had been a contractor. So when we were asking, said, hey. What do think about this? He’s like, I think we could clean it. I’m like, I don’t think you can. It was heat damage. But his reaction was the same as mine. Maybe it’s cleanable. The reality is in furniture, you’re gonna get such high temperature push of that smoke going to the cold insides of the the couch. Makes it really hard to clean. Like, a cold smoke is where you might do furniture cleaning. A high temperature environment makes it much harder. So that’s why you gotta try to understand what type of fire are you dealing with because then that’s gonna dictate whether you have more restorable stuff or more replaceable stuff. Alright. Calcination is the next it’s it’s the hard one that we can’t see. There’s no easy way to see it. And calcination is something that we need to be cautious of. So it’s in drywall. When you superheat drywall, it releases its crystallized water that’s in the drywall. So in the manufacturing process, it’s what gives drywall its fire rating. You get crystallized water. It represents about twenty one percent of the weight of the drywall is this crystallized water that’s inside the drywall. In there, that’s bonded. It’s a chemically bonded water to the drywall. It’s made in the manufacturing process. The calcination is the process of that water leaving the chemical bond when it gets heated and is being released. It starts at about three hundred Fahrenheit. It can start a little bit lower. I’ve seen numbers on, like, two sixty Fahrenheit or a hundred and twenty three Celsius. But what effectively is happening is at the boiling point of water, the crystallized water will boil off. And so drywall, the reason it’s a fire barrier is it doesn’t transfer heat higher than two hundred and twelve degrees Fahrenheit. That crystallized water will keep its surface temperature on the back of the drywall at as high as the boiling point of water, two hundred and twelve degrees. That’s how the fire rating works, is it’s constantly off gassing or or releasing it to moisture during a fire. And so when they put this into kiln or they they they test it with a torch, they’re running, like, two thousand degrees or eighteen hundred degrees Fahrenheit on the drywall, and it’s not getting higher than two hundred twelve degrees. That you cannot rehydrate. So if you have a fire and the the heat comes down and let’s say demarcation line’s here. Well, we had over three hundred degrees down here. All that drywall is coming out. All of it’s coming out. But what we used to do is say, hey. Let’s just go to the the line, cut above the line, leave the rest. Right? You do some stuff like that where you’re like, oh, look. The line is, a foot from the ceiling. We’re good. Pull the gyp rock. You can’t tell. There’s a test that you can do, but it’s it’s not as reliable. There’s a coloration that you can see in it. When in doubt, tear it out. It’s your fire rating. It’s the way the the gyprock was engineered. It can’t be rehydrated. So in a fire where there’s high heat, pull it out. If it’s a cold fire where the smoke just transferred through the building, you’re fine. It it becomes an is there something behind the cavity? But this is a big one that a lot of restorers miss, and they misdiagnose because of the old way we were taught. In there, you cannot restore the process of calcination, nor can you like, you can’t add high humidity back to it and get it to bond. There’s a certain amount of water that can be put back into the board, but, one, is it economically feasible? Two, do you have a way of testing it? And three, is that what we’re gonna do? No. None of those questions. So you’re gonna put new drywall in for sixteen dollars a sheet or eight dollars a sheet. You’re just not gonna dick around with it. It just doesn’t make any sense to take on any liability, especially if you’re in multifamily where you have a firewall, where you have a rated firewall. Why would you take any chances you gotta pull that up? Does that make sense, guys? You gotta pull something that you believe is heat damage, and your your reason for removing drywall would be calcination, that it was impacted by temperatures that you believe to be more than three hundred degrees. And how do you believe that? The physical damage to the environment. The carpet is singed below, which means we had heat on the floor, which means that we had heat going down. And that’s part of your documentation you’re reporting. K. Question time. Boom. Boom. We’re into the questions. Awesome. So is calcination determined by visuals only? There’s a pressure test you can do. I don’t have a picture of it. There’s a tool that can test the pressure of of calcination for what we do. Like, you’re not trained in the tool. You’re not certified in the tool. You’re doing it with a visual observation. I would if you had a high heat scenario where, like, lights are melted, you come down and ornaments are melted, you’re just gonna say, hey. For, like, the extra four dollars for that sheet of drywall, tear the drywall, like, floor to ceiling. If you’re in like, you’re almost better off. Like, you then you get into, like, okay. So you’re gonna cut four feet. Okay. Like, you’re gonna save the bottom half of the drywall. It just doesn’t make a lot of sense because you’re gonna spend a lot more time trying to repair four feet of drywall going up. So it it becomes a your determination is pull it out. Now there’s there’s visual. There’s a there’s a coloration that happens. It goes from, like, a grayish to white. You could do that, but I I just I wouldn’t. So what, if anything, plastic would you try to save if it got sooted up? So plastic with soot and now now now is it cold soot or a hot soot. Right? So plastic when it gets heated anything when it gets heated normally opens its pores on a microscopic level. It’ll open its pores. That’s why you try to recreate the conditions of the fire. So if you had no. Not gonna get to the same temperatures, but if you had a plastic get up to a hundred Fahrenheit, let’s say that the pore is normally like this, but then it opens up to that at a hundred. You’re gonna try to recreate that so that you can get your product in to deal with that that, smoke particulate. Because at at room temperature, it’s closed up. Plastics are susceptible. Like, they’ve got a lower melting point, so their molecules on a microscopic level will open up more. If it was a cold smoke, you should be able to wipe them off. No problem for most plastics. If it sat and got wet, maybe they get etched. Like, Maybe they have a chemical reaction to the byproducts of the fire mixed with the water creates a new acid that they’re not resistant to. And so it it kinda depends. What’s the value of the plastics you’re trying to save? Are you trying to save a Rubbermaid, like, tub? Who cares? Throw it out. If you think it’s, like, just a a light soot on top that you can wipe off, sure. Go for it and charge three dollars for that bin wipe down. Like, you just you have to weigh the cost versus, like, is that where you wanna take risk? And, you know, some some Rubbermaid containers are good, and, like, the HD plastic containers seem to be pretty good at not holding odors. Rubbermaid, not as good. If you have a Rubbermaid container, it seems to hold odors a lot more. Is that the chemical compounds? Maybe. I don’t know. It’s a decision. Right? It’s a it’s a restoration decision. You’re the one on-site. Test clean it. Test did the test cleaning work? Like, that’s the other thing. We make a lot of calls when we walk into a job that, yeah, that we can clean this. You haven’t tried this. You don’t know what was in that fire. Was it was it plastics in the fire, chemicals in the fire? Like, what are you trying to clean? Every time you go into a job, don’t know if we clean it. I think we can clean it. We’re gonna test clean it to to verify. And then you’re gonna see if that cleaning process works. And then if it doesn’t, you’re like, no. I didn’t test clean. Like, why accept liability for something you have no understanding if it’s gonna work? And you know what I mean? Like, it’s it’s you set the you set the expectation when you come in and say I can clean everything and then nothing gets cleaned. You look like you don’t know what you’re doing. But if you went in saying, hey. This is a bad fire. I think I can clean some things, but I can’t clean everything. And then all of a sudden you get into it and you’re like, hey. It’s not really responding. You will reset the expectation. It probably wouldn’t respond. You look like a hero if it comes back and you’ve cleaned eighty, ninety, you know, percent of the contents. So you had mentioned earlier about cleaning old soot around a fireplace, as this can hold contaminants and odors. Can you expand on that a little bit? Do you full, do you full chimney shoots do full chimney shoots, sorry, need to be cleaned for this reason? Yeah. It it it comes in that let let’s say your fireplace, and you could use, like, an old school just like so everyone’s visualizing the same. Like, one of those old school fireplaces where where you throw the logs in and it’s open. So it’s not a wood stove. That chimney normally gets wood smoke up it, but then you had a fire and that chase allows plastics to go into it. You could try burning it off after, but that’s not really our job is to, like, hey. Let’s light a fire and see what happens in that chimney. So I would do a clean of it. It’s it’s it’s a there’s creosote. So creosote’s a a byproduct of wood that when it when the wood gets cool, it’ll form inside the chimney, and then normally you try to sweep it off. Right? You try to remove it because it can it’s it’s kinda like a wood oil. It’s it goes in wet, and then it’s it’s solidifies, and then it’s preflammable. You might not want that mixed in with plastic, so you would just do a chimney sweep. Why would you not do that? It’d be like the same as going to a restaurant where there’s normally grease, but now you mix grease with plastics that burned. You’re gonna clean the ventilation system. You’re gonna clean the grill really well. Same thing with fireplace. Just because it’s it’s a wood fire doesn’t mean you’re not gonna put some attention to it. Jim, what’s your justification? Oh, the fireplace had, you know, a lot of damage around it, and we’re gonna now clean around it and clean the the chimney. I justify. What’s your justification? I think you can do it if you have a reasonable argument. And the argument I would just make around a a fireplace is it normally burns wood, and in here, we burn plastics and everything else. We’re gonna clean that chimney and remove that odor of the plastics, not the smoke odor, the the odor of the plastics. We gotta get the contaminants to have plastics. And then, honestly, on your first burn, you probably burn off everything else because you got the stack effect. So all your contaminants are going up and out of the fireplace, but you still need to do some kind of cleaning. Without using hygienes, how would you know what respirator filters you need? So go heavy. The higher level protections are better. I’m I’m a fan now. Now we rolled into it late in my business. So we had half face respirators until I realized that they’re not as safe as full face. And then when I had my guys in full face and I realized they didn’t work as fast as they did when we put them in PAPRs, we put them all in PAPRs, or at least we gave them that option. And then your filters is is selecting your filter. So when in doubt, like, that one job where you need to supply their respirator, it’s better to have a respirator than no respirator. Right now, I’m gonna say the majority of our fire damage jobs, project managers, adjusters, and technicians walk in without any gear. So some respirator is gonna be better than that. And then if you go into testing, then you know exactly what you’re dealing with and how to protect yourself. But for filters, it’s like, put put the organic vapor gas filter on. And then, you know, how should you be doing it? You should be going in in a in a a supplied air respirator until you test if you were, like, to take the extreme position, which if you look at the firefighter, they go in at SCBA. So they go in and supplied air. They go in. They do their thing, and they come out. And then fire investigators wear full face respirators when the fire is cooled. I’m hoping they have enough science that that’s good because that’s what kinda we’re relying on is that they’re there. But they’re only there, let’s say, for a day to do a fire investigation. We’re there for a week or two doing a cleaning. Maybe we’re protected, maybe we’re not. And, like, that’s sort of where the industry right now is honestly at a crossroads. My safety hat says we should be geared up more than we are. The science just hasn’t been tested, so I don’t know where we sit. Right? We don’t have enough science. There’s a few few friends of mine that were taking samples. I don’t know if if Bob’s on here, but I got a couple guys are firefighters and restorers, and we’re taking samples and getting the test results of, like, what’s happening during the fire, what’s happening immediately after the fire, and then what’s happening during the cleaning process. And I’m hoping that they’re gonna have the data that we can write an article on. But there’s some there’s some restorers looking at it that are safety minded. Oh, wow. Yeah. That’s awesome. I wanna shift gears a little bit because we’ve gotten a lot of really awesome situational questions. So we’re we are currently working on a fire that started with a battery in a garage. Many tools with rubber, metal, plastic components were present. We have cleaned the soot off with the HEPA vac, hand wiped down, and treated with ozone, but the odor persists. Do you have any advice on removing the odors? So it’s it’s a it’s a hard question to answer without being there because you have to ask, are you cleaning in place or are you cleaning off-site? So it sounds like you’re doing a clean in place, which is really hard in any situation. Like, your your goal would be to separate the contents from the building and then restore the building and then restore each individual item, and then everything should come back easy. But if you’re trying to do it all in one, how do you prevent cross contamination? So if you were trying to prevent cross contamination, you might set up a negative pressure on one end of the of the the garage and bring fresh air in from another. Doesn’t quite work that way. Like, the real world that you got swirling winds. Like, is think about, like, doing a water damage. I’m not a fan of cleaning on-site. I think it’s like, the jobs I’ve seen like, I end up seeing most of the fights that come in front of me where we have arguments is that people did clean on-site. There’s a very limited scope when I would clean on-site where you have a clean room, like a garage, that you protected and you decided that that’s where you’re gonna clean. And economically, it’s like four hours to get it to your shop or something. In an everyday business, pack that thing out, get the building clean, do what you gotta do with the building, identify you’re playing with too many variables. So I’m not a big fan of clean on-site. It’s taught in restoration as, like, a limited option, and it’s used way more because adjusters are like, it’s cheaper. It’s not cheaper. You will run into more problems like you’re having doing a clean insight. And then I’m I’m assuming you’re doing a clean on-site. But if you’re you’ll run into a ton of problems, especially with, like, a battery fire. So is it is it a a lithium ion? Is it is it a normal car battery where you’re dealing like, a deep cycle where you’re dealing with, like, lead? So you have all these other things that you might be contaminating the environment with that you have to check to see how your cleaning process is. It it becomes a technical job. And so it’s a lot bigger than, hey. This is just a little bit of wood smoke from from the fireplace. Right? But it’s hard to answer when you’ve like, there’s a lot of variables. I’d I’m I’ll I’ll make assumptions for and then be totally wrong. So We have another one. We had a situation where the texture was more like stout sorry, stalagmites. We could not clean it without destroying it. Customer refused to let us remove and insisted on it being sealed instead. We hit it with the fogger to try and clean it. What would you recommend to do? So so that’s where you deviate from a standard to the real world. And so the way you approached it would be, hey. Our recommendation is you remove it. Homeowner says you can’t remove it because I wanna keep it. Okay. So the next option is we could attempt to seal it. But you have to understand, you’ve got a porous material that you’re putting a sealant on one side. I’m gonna assume it’s drywall on the other side. So let’s say that you have a you have you you now put a seal here and you have a smoke odor now trapped in this porous material on the drywall. It can’t come out the sealant. It can only go through the drywall. At some point, that odor is gonna permeate its way through the drywall on the other side, and then you’re gonna get a smoke smell back. Your job is to say that’s the risk and sign off on it. And the contaminants might have a hazard in it, which could be hazardous to your health. Sign off on it. After that, it’s their decision. They sign off and say, yeah. Your lawyer is gonna try to protect you as much as possible, but or you’re like, hey. That’s too much of a risk. I don’t know what like, depends what burned. No. You know what? We’ll walk away from this job. It’s just not a job we wanna be working on. And that’s a fair fair answer too. Like, you don’t have to restore every. In in restoration, we restore everything. The call comes in. We do it. In the real world and any other job, you’re like, no. That one doesn’t really fit what we do. We don’t have that. The IICRC hasn’t taught you to walk away. They say respond quick and then do your job, and your job is maybe sometimes you walk away. But as a general rule, explain what the risk is of of of them doing it, and then let them make a decision. It’s their house. Yeah. Alright. We good, Kristen, to go on, you got one more? I I do have one more that’s kinda quick, if you don’t mind. Sure. So, there’s just a individual that’s asking if there’s any similar criteria for determining heat damage to framing members or a rule of thumb for evaluating heat damage to conventionally framed structures. So it’s a good question. Wood reacts a little different than drywall. Wood wood can case harden. You could you could there’s no scientific way, but there is, like, driving a nail into a rafter that has suspected heat damage. You’ll you’ll get the cells. On a molecular level, you’ll get the the wood cell will collapse. Like, when we overdry. Right? So we know when we overdry wood, we can get what they call case hardening where we actually collapse the cell of the wood, and it can’t it can’t expand. It would just we we on a microscopic level, we damage the wood. In a fire, the same thing’s gonna happen. Right? High heat hits it. You damage it. What you could do to show that it’s heat damaged is you could drill a nail or drive a nail in an undamaged rafter and then go down to the area that had heat and try to drive the same nail. And what you’ll see with case hardening is that nail will go through, like, the old fur. Remember the old like, if you ever do, like, those heritage homes, like, nineteen hundred homes, they’re they used wood that was just hard, like, super dense. So you drive a nail into that, and it’s hard. You’ll see that same thing in the softwoods is it’ll harden, but your your nail on the other end will go in like a normal like, putting it into a stud. Right? Putting it into a just normal dimensional lumber. But if it’s been case hardened, it will be harder to drive. That would be your indicator. I don’t know of any other way of doing it. You could test the moisture content of it and see what your moisture content is. I would suspect after a fire, that would be really low, two, three, four percent if it if it if it heated up that high. You could use that and be like, our normal dry standard is is seven, and now we have three over here. That would be a good indicator as well. So we’ve got this the four steps of of cleaning, and we get into to the or sorry. Four steps of restoration. We get into our cleaning. This is where we spend a ton of time. This is where we would actually make our money as restorers and spending our time on it. This is the most important step. So if you were to say take all the charred soot and ash, the next thing is is how good can you clean? How much cleaning are you doing? What are you gonna clean? What products are you gonna apply to clean? And can you remove the contaminants? That’s one of your best tools is the HEPA vacuum. You’ve got the the particulate lands on the surface, and before you you rub it into the surface, you can actually vacuum it up. And these are amazing tools for getting the bulk contaminant removed. We’re very quick to run to whatever, you know, go go juice that you put into a bottle and spray it, but this is actually your best step. So doing a HEPA sandwich where you HEPA vac, wipe it down, and then any of the particulate that was in the air, you HepaVac again. Pretty effective methodology of of doing a fire clean. You might just HepaVac and wipe, and that might be your process. So depending on how you go forward, this would work. When we look at jobs, like, before cleaning, you’ve got drywall on the ground. Like, this is what we’re looking at, bulk removal. So we’re removing source. We have contaminants on rafters. Post remediation clean, you start looking at it, you’re like, well, how clean is it? Well, we’ve got stuff in in the way. We’ve got some boards. Have they been wiped? You know, on the right hand side, you’ve got some electrical stuff that’s down. So so this is post remediation cleaning. It’s gonna be different. It’s an easier clean when you’re doing a construction cleanup. But I’m still looking, do we have contaminants? There’s a lot of jobs where you have a fire damaged job, and the level of clean on that job is very minimal. Like, you still have soot in particulate or construction dust from the when the home was originally built. And you go, well, how is that possible that you did a fire clean and all this original soiling and contaminants is here? How did you clean around that? You didn’t. And so it was an incomplete clean, and then we can’t figure out why the smell’s there. And that’s because we’re gonna rely on the technology to lower our cleaning bill. That’s not when an insurance company that like, traditionally, that’s not what insurance companies were looking at reducing cost. It used to be clean would be a less lesser cost than replace. Now it’s let’s do a lesser job cleaning to lower the cost. You’re exposing your company and that insurance company up to massive lawsuits. Like, it is exponential how much more risk you’re taking when you do that. What you’re trying to do is tell the adjuster in this it’s, again, it’s it’s positioning your job. If I don’t do anything, I have to remove all of these materials that I maybe could clean, but I’m just gonna remove them. That’s a hundred thousand dollars. If I clean, I can save you forty thousand dollars with my cleaning bill. There’s not really another option to be like, I can only do partial cleaning for thirty, and we hope we’re for the best. Like, that doesn’t work. It’s like, saved you forty, but it’s gonna cost you something. And that’s what your job is as a professional restorer is to communicate what the the differences are and where you can’t go. And a lot of restorers just don’t know. They’re like, I guess the adjuster knows better than me, so they said don’t do this, so I’m not doing it. No. You’re now on the hook for it. This is what would a post clean for paint look like. So in here, for paint, look how how how ready that is. But if I’m doing a mitigation, I’m coming back and being like, hey. That’s part of that cleaning process. And I’m talking about contractors that pass the job over to the next contractor. Well, the next contractor, like, what level are they getting? So if they’re going from the fire damage, and then we’re gonna do the demo, and then we do a demo post remediation clean, does this qualify as post remediation clean? Like, is there contaminants there? It’s electrical. Like, there’s a lot of electrical stuff, some insulation, but ready for paint. I should have no smoke odors at this stage. At this stage of the game, we should be, like, no odors in here at all. And that’s your job as a restorer is to get the job ready for rebuild, and you’re like, oh, I took care of all the odors. There’s no odors. We recreate the conditions. We heat the building up, increase the humidity. No odors. We’re good. Put the building back, have the homeowner sign off, and now anyone can restore it. Hopefully, if you do full service, it’s you. If not, that’s cool too. Like, if you’re just a mitigation company, your job is to make sure the smoke odor is gone. You did your job if you did that. Now what happens if you if you ramp the the process up? Right? So we get into a final clean. You go from here, and now you do the renovation or the restoration work, and you get to final clean. Final clean is there’s no construction dust. We’re well past. There’s no smoke and and and fire particulate there. At this point, there should be just construction dust that you’re dealing with. This is a normal house cleaning at this point. What do you deal with when you when you have stuff that you have to move around? So this was a personally asked about the garage. This is the same scenario. The house was completely burned. This is the house you were looking at before, and everything got moved into the detached garage. Guess what else needs a clean now? The detached garage for a bunch of contents that may or may not have needed to be moved over there, but the garage needs a clean now because now all this smoke contaminants on the concrete, and now it’s filling the room, the garage with with the smoke smell because everything got moved in there. So you got cross contamination. You got heat damage. Here’s how I want you guys to think about order balance theory. There used to be two theories. So there’s one that that the industry, I would say, is is generally been built on. Product driven order balance theory is that you come in and a homeowner smells a fire. And their odor is, hey. This house has a fire, and everything is covered in the soot. The odor balance theory is that if you have a bad odor, you’re gonna neutralize it by getting yourself a really clean odor. So imagine going into a fire, smelling smoke, and tomorrow you smell lemons. Wow. That smells clean. Now I was out at Costco with my wife a couple years ago. We walked into the detergent aisle. The sunlight bottle had fallen, and you smell that burst of that lemon. And I literally said, oh, that smells, and I knew what I was gonna say, so I finished it clean. But that’s a nice fragrance. So that is psychologically where we used to say, hey. That would be that would be good. That’s what they’ll think of us. They’ll think of us as lemons, and it’ll look like we’re doing something. K. Well, that’s order balances that when you have an offensive odor, you replace it with a with a clean and deodorized odor. And then you try to get yourself back to to neutral. Maybe maybe that’s a that’s a good theory. I don’t think that that’s the right theory. I think what you’re looking at is neutral and normal. You get to an offensive odor, and you work your way back. So you go to an offensive odor and you dilute it with fresh air. Okay. That works. So when we start looking at that, we’re now looking at our deodorization process. Well, if we went in here and we said, hey. We have that odor balance. We have an offensive odor. We remove the source. We still have an offensive odor, but it’s less. We clean it. Whatever is left now is a smaller odor. Remember when I did the the odor? Well, now we’re down to this. And so we’ve cleaned it, and now we’ve got a small odor. And we’re gonna try figuring out where it is, and then we’re gonna determine how we make it go away. And we have equipment that will make it go away, but we don’t need to hit hit it with a high volume of equipment. We can use small concentrated equipment to make that go away. So we focus on deodorization. And these are some of your options that you have. Thermal fogging, ULV fogging, oxidizers, pairing agents, and masking agents. And as you start to look at, you got your thermal fogging. So we’re gonna put a chemical in. We’re gonna heat it up, and we’re gonna try to recreate the conditions so that these thermal molecules, the molecules that we’ve heated up and vaporized down to a a small trying to repeat the exact same particular particle size to get it in. If we heat the materials up and the pore opens up, this odor counteractant can get in and neutralize our odor. That’s the theory behind using our our our thermal fogging. Is there anything wrong with that? No. Do you do it at the beginning? Not really. You should do it at the end because you’re taking the source out, cleaning, and then applying your thermal fog. You’re putting a liquid into that container, and then you’re superheating it. And you’re putting the fog in, and there’s some risk with it, but it’s an effective way to deal with odor. It’s more effective when you have a small amount of odor and you can concentrate your efforts on a very small amount of odor that you’re focused on. UOV fogging, in there, you’re taking a chemical, and we’re gonna spray a liquid form, and we’re gonna get in. Is it as good? It can be. The the the droplets are very small. They’re very microscopic. There’s theory that they can get into the surface, and then they they fill the pore, and they saturate your your your your particulate, you can fog it in the air, and and the liquid hits the it hits the smoke particle and encapsulates it in a polymer. The polymer dries and it drops it, and your smoke particulate is is covered in that. All of these have an effective use against against smoke. Do are they effective for your occupant? Will your occupant have an adverse reaction from it? But this is an effective tool, and it could be an effective tool in your toolbox. I’m not gonna I’m like, I won’t shit on any of these, but you have to understand that there’s literally a a detrimental effect that can come from anything you do in the house. Because now you’re adding a foreign substance to the the structure and the contents, and you’re responsible for the addition of that foreign substance. So oxidizers is a big one, and you’ve got bunch of selections here, ozone, hydroxyl, peroxide, chlorine dioxide, UV light. All of them have some kind of properties that will be effective against odors. Some odors more effective than others. Ozone’s probably our most powerful oxidizer that we have access to. Hydroxyl, I’d say, is probably, like, three to four times less powerful than ozone. It’s just a different way of of working and reacting. You got peroxide, which can be liquid or gas. You got hydro chlorine dioxide, liquid or gas, and you got UV light. When UV light is used in hospitals at times, and it it’s an effective tool. All of these, you have to understand, once you oxidize something, you can’t reverse it. So this is a small apply it lightly and go. What we’re we’re seeing is we’re seeing companies come in and just hammer jobs with oxidizers. Your oxidizer doesn’t just affect the smoke particulate. It affects the plastics, and it affects the paints and your cleaning chemicals. You don’t control where it goes and what it oxidizes. So this has no ability to reverse the effects of it. So once you do it, you’re now committed to you’ve oxidized something. If you’ve over oxidized it, you own the result. And I will tell you there’s multiple houses that have been replaced or sold or transferred to the insurance company because the oxidizer effectively damaged the building beyond repair. And so that will usually go to lawsuits. They settle before they get to court. So there’s no public record necessarily of the settlement, but the houses transferred due to the fact that the oxidizers can’t be reversed, and so the damage is permanent and long term. You’ve got masking agents. We just cover the set with another set, make it nice. And then you’ve got pairing agents where you come in and you apply a pairing agent like a respirator that uses the vapor cartridges, which is the essential oils. Those work very well. I’ve had good success with all of these. But it’s just pick the right tool and in the right quantity for what you’re trying to do. So those are your options. And what we do is you’re like, man, that’s like, where would I go? Here’s your other option. How about dilution? Just bring fresh air in. So there’s an argument to be made from a health and safety standpoint if we’re trying to reduce particulate count. Could I bring fresh air in, take the bad air out, pump it out on the other end of the building, or or or put it through a filter, but bring in fresh air and dilute the the contaminated air? Would that be a better option than all the junk we put in the air? Most of the time, probably. Do you have to condition it? If it’s cold and wet, yeah, you have to heat it and dry it, but it still may be better than your other option. So how much would you charge for an ozone machine versus how much do you charge for an air scrubber and a dehumidifier? So I could bring air into this office, have it circulate in, dehumidify it, and throw it out in back into the structure, and I could do that. If I want, I could come in and bring heated air in and bring outside air. Now I’ll use my particle counter, see what’s the contaminant level of the outside air. Do I need to filter it or not filter it? But I can dilute all the contaminated air with fresh air. I can still charge for it, but I don’t take the risk of it. There’s there’s less risk bringing fresh air in than there is applying another product to it. So maybe I buy more air scrubbers and I buy some heaters, and that’s how I’m gonna deal with fire damage. That’s a really effective solution. I think there was only, like, three or four percent of you that said you did that. You still would make similar money compared to the other stuff, but you don’t have the risk. So I like this as a primary option. And it would look something like this. Right? Reduce foreign chemicals and contaminants, and it’s an engineering control. So it’s a it’s a OHNS or OSHA requirement that we checked our particle count, and it was unsafe for workers. And we put a plan in place to reduce the particulate of bringing fresh air in, and we reduced the VOC concentrations that people would be exposed to, and it allowed us to remove the source clean. And guess what? When we got done, there was very little odor. Now we bring in our tools, and we say, tool is best for the job to get rid of the odor? Maybe it’s a contact spray on a certain material. Maybe it’s an oxidizing gas. We pick the the the solution that makes the most sense. And then this is gonna be the the controversial one is surface sealants. Surface sealants, the insurance carriers love to prescribe. Here’s how they get used inappropriately. So we’re looking at boards that were put in. So these were these weren’t engineered trusses, but what they did is they’re like, hey. You know what? Instead of cleaning these, let’s just spray a sealant on and then put our our temp boards in or or put a repair in place. You didn’t clean the wood. There’s still insulation that was blown in by the fire department’s hose. You sealed it. That’s not a proper coat. That’s a brush seal. And and if you read these sealants, almost all of them say that they need to be sprayed in to a certain thickness. Now if they say they can be brushed in, then they’re brushed into a certain thickness. I guarantee if I can see the wood, that’s not certain thickness that they’re supposed to be brushed to. So this is someone who doesn’t know the product, applies it to the job. Where would I expect to find some problems later on? Probably in these areas. Right? They just didn’t know how to apply the product. So when you see that as a consultant, if I see that on a job, I’m forced to come and challenge you on that. That’s what happens when you run into jobs like this. You’re like, hey. That’s inappropriately applied. You didn’t clean the surface. You didn’t apply the product properly. Like, if there’s a problem, you’re gonna be held responsible for it. How about this? We see this on jobs all the time. Uneven coverage. Probably on a dirty surface because I can see like, I can see debris, and it looks like the debris goes underneath the surfaces. Over here, we’ll just cover a giant hole with plastic, but you don’t have even coverage. You have a paintbrush with different coverages. That’s inappropriately applied. And then you’re gonna say, did you actually clean here, or did you just start spraying or painting the sealant on? Be careful, guys. That’s that’s the big one that gets a lot of people in trouble is this. Before we do that, you sealed part of the material. Where is that where is that odor going? It’s gonna go through the material on the other side. So you sealed the top. Did you seal the bottom? And if you do that, what did you do to the permeance value of the a material? When I say permeance value, I mean the ability for the moisture to transfer through the material. What did you do to it? You you changed it. So a piece of plywood would have a perm value of about ten molecules of moisture that would go through a one square foot area with one inch of mercury differential on the other side. It’s all technical. Doesn’t matter. Let’s just say there’s there’s a low pressure on one side, high pressure on the other, and it’s the equivalent of one inch of mercury. What we’re basically doing is we’re driving moisture molecules through the material. Could we drive an odor molecule through the material the same way? Maybe. Probably. So if you seal both sides and now all of a sudden you don’t have that same transfer of of water vapor, well, now you’ve sealed it in. And do you create extra problems like another vapor barrier where there shouldn’t be a vapor barrier in the building? Yep. So if you have a vapor barrier like in Canada here on we’re in a cold climate, our vapor barrier is on the in on the backside of the drywall wall of a vapor barrier, insulation, and then our our outside wall. In there, I would then be putting a vapor barrier on the outside wall where there shouldn’t be one. So I have vapor barrier, insulation, no vapor barrier, but now I seal the walls, and I put a vapor barrier in. What did I just create? I created an opportunity to condensate moisture inside the wall cavity. I’m the cause of mold and rot and everything else that comes with it. So yeah. Alright. Let’s go to questions. Then we’ll take another quick break, and then we’ll come back and finish this up. So do you have any experience or have an opinion on pure air? They say it’s better than ozone. Oxidizers are oxidizers. It’s an oxidizer. I like oxidizers. So, like, I love ozone. I is there something better than ozone? It works pretty good. It just oxidizes everything. So small applications, even even things that you wouldn’t consider. Let’s say you had a an odor that’s, like, in a in a in the bottom of a baseboard, plastic it off and hit it with ozone for a lot less time so you’re not, gassing the entire room. Product wise, like, brand name wise, not really. Like, I I like chlorine dioxide. Different manufacturers make it. There’s some that are better than others. It it’s an oxidizer. I like oxidizers, but you just not at the beginning of a job. Like, no way. That’s insane. And and now seeing the the legal liability and, like, the the homes getting replaced because people put hydroxyls in or or oxidizers in, no. No. I wouldn’t do it early. I would I would hold off. But for that particular brand, I don’t have a problem with that brand. So when is fogging technique applicable? It it it’s it’s a technique you’re gonna apply. So if you want to if you’re do if that’s your comfort, how would you say it? There there’s there’s things that would be if you were doing a wildfire and I’m gonna say this, and and and there’s, like, a million asterisk you’re gonna put beside it. But if you were doing a wildfire and you had an odor and you cleaned the building and you still had a light odor there, you could go in and hit it with a quick thermal fog and and if you you have a contaminant. So any of these solutions, like, when would you thermal fog? When I’m trying to get a gas into something. Do I wanna send it down a ventilation system? Not normally, but if if my project scope requires it, maybe that’s where we would use it. You could use it wherever you use oxidizers. It’s just your your it’s your weapon of choice. Just be careful with whatever you’re you’re playing around. It’s yeah. Is there an ideal situation for it? I don’t know. It it it kinda depends on what burned and then depends on how your cleaning process went. And then it depends on, like, where are you trying to get it into. So is it in a tile area where you, you know, you’ve got a little hard access and you’re gonna try that to see if it makes it go away? You just everything comes with risk. So it’s just you’re applying a product. Think of it like your weapon of choice. Is it does it work? Is it the right weapon? And don’t remember that once you put something in, you might limit yourself on other options you have that you have you can apply to the building after. So if you put a chemical in, can you oxidize it after, or are you gonna create more problems? So you it’s our marketing in the industry is like, hey. Have everything on your shelf? No. I’d have a very strategic plan of what I have on my shelf. Right? I would be I would be looking at the type of work I wanna do, and then I’d have people that are trained in those tools and and, you know, you just don’t go at it as hard. And, honestly, that’s how we used to do it. We were just, like, throw anything and everything. I would not do that today. Yeah. Great tip. If a kitchen is super greasy and it was that way pre loss, will the smell remain in the grease? So it’s a great question. If pre loss, it was a super greasy kitchen. So you you could say, like, a restaurant that was in between, like, in between cleanings when the ducts are getting cleaned. That particulate’s gonna bond with that grease. So your your smoke cleaning is like, hey. The grease that’s normally there has a particulate that’s not normally there. To get rid of the particulate not normally there, we have to clean the grease that is there. And so your your degree of difficulty for cleaning is gonna go way up. But you’re gonna have to remove it because that’s so in that seniors’ home, one of the things was we didn’t clean the duct in the kitchen, and we didn’t do a grease clean on it. And we had particulate that when the kitchen was not in use, the outside winds would backdraft the smell of smoke back into the building, and that kitchen ventilation system held copious amounts of the synthetic smoke smell. Right? So you had that. Absolutely. What are your thoughts on window treatments? Do you clean or replace? The adjusters tend to freak out when we give them a twenty k replacement quote. So so the so here’s the thing. Twenty k to replace, are they heat damage or smoke damage? So if they’re heat damage, life is what life is. You can’t change that. If it’s smoke damage, you now have up to twenty k to play with to save them. So if you’ve got the right technology to clean window treatments, have at her. And now you get to be creative because you’re not gonna do that on time and material. You might come in and say, hey. They’re worth twenty thousand dollars to replace. Do you wanna spend ten grand to for us to clean them? And you would do a test clean and see if it works. And if it works, then you go at it. So it’s a it’s a good option when they wig out on the replacement cost. Now you have a bigger budget to save them money. There’s there’s I like that question because there’s a whole there’s, like, a whole day of discussing how you use that type of how you use that type of of scenario to maximize your revenues and your profits and save the insurance carrier a ton of money. It’s like a win win for both. Good question. Do you wanna take one more, or do you wanna go to break? Let’s take one more, and then we’ll take a, a five minute break, and then we’ll and then we’ll come back and finish it up. Perfect. So what’s the most effective way to remove protein fire odor after cleaning all the surfaces? That’s well, so you’re if you’re still stuck with odor, you’re now trying to find out what you didn’t clean. So is it interstitial spaces? Is it behind cabinets? Is it inside electronics? Like, if you’ve cleaned every square inch of the building and you still have odors, you’re now left with where did you where are those odors hiding? Now it comes down to concentration. So let’s say you got ninety nine point nine percent of the odor, but there’s still an area where there’s some odor. Normally, it’s behind kitchen cabinets. Like, it’s in the voids in the cabinets or it’s in the porous materials of the cabinets. So you could try, hey. I think it’s in the trim. I think it’s in the exposed OSB. Maybe we seal that. It’s just a risk game. It’s like, I think I could seal it and make it go away, or maybe I have to sand it, or I have to replace it. And so what could you use? It’s normally the cleaning process. You could try you could try the like, a little bit like, an ozone’s not great on a greasy thing. You could try a thermal fog. A thermal fog might work with the right chemical. Yeah. And then and then but the big thing is, like, ninety percent of your ninety nine percent of your effort should be cleaning on that. Like, not a lot of order counteractants are gonna do a lot of good on the on the greasy stuff. So you’re gonna be left with elbow grease. And so you probably just missed something. Maybe the underside of a counter. Right? Like, that’s like, normally, we look at the horizontal surfaces, but in a, like, a really bad protein, everything’s covered in this stuff. So you’re just doing a real deal detailed clean. A lot of cleaners just overlook it and just do, like, as if they’re doing, like, a final clean. Totally different cleaning. This is where the insurance industry who’s untrained puts pressure on those that are trained, and then the degree of your knowledge is gonna impact what how we how we handle that. So I’m gonna show you some jobs. This one these jobs all went to a legal, litigation after. In here, this was a fire damage. And so this was a plaster wall, and then these walls were covered with this, plank. And in behind the plank was either a blown in or a bad insulation. And I got into a battle with an engineer on that the planks had to come off and the insulation had to be removed. And they said, no. The plaster was wet, but that doesn’t mean that the insulation got wet. And the engineer actually said, because I don’t see any water lines on the wood, means the water never got there. And that was a major battle, to have a discussion on, is this ready for rebuild? And the homeowner was like, what do you think? I’m like, well, if the plaster was wet and you have mold on the surfaces because the plaster was there, it’s just a conclusion that there’s gonna be water there, and no one tested. The restore never tested. So that project was basically left wet because they said, well, it’s a fire, and we didn’t put anything on because mold doesn’t grow on plaster. Nope. It might not, but it grows on the contaminants. It grows on the solid surfaces. It grows on the debris. It grows in the mold. Like, there are whole in the insulation. There’s a whole bunch of areas that will grow. Maybe it’ll have a harder time growing on plaster. Sure. But these are the discussions you’ll have with untrained individuals. That was the blown in insulation that was left behind, and this job was ready for rebuild. The insurance company had farmed this out to a rebuild contractor who took a three day fire damage course, and now they are ready to do fire construction rebuilds. I said, what’s your what’s your plan? And they’re like, oh, we’re just gonna put it back together. Maybe we’ll just sweep it up. No fire damage training. No fire damage tools. No mold training. No mold tools. And when we talk about it, you’ll see that temporary little splashes of sealant and then all of this, like, this is not ready to go. This is a dry ice blast that’s required for this. Like, you’re not gonna seal those contaminants. Their plan was to seal the the contaminants in place. There’s a little bit closer picture of it. That is unacceptable. That is not a proper fire restoration. Now I get the temporary repair because there was maybe some structure that was burned, but that’s not how it needs to stay, and they had to come back and correct that. In here, this was ready for paint. This was cleaned and ready for paint. I there was no cleaning, and that’s not ready for sealant or paint. Those walls need to be cleaned. Look at the floor here. Oh, let me go back. Look at the floor. That is debris from the demo. How is this cleaned? It hasn’t been cleaned. They haven’t removed the the byproducts of combustion. On the wall, you have the good old hand test to see if there’s what what type of soot and contaminants there are. You’ve got exposed electrical. How are we gonna deal with that? Is that getting replaced? Why is it still there if we’re gonna remove and replace it? You know what one of the driving factors was for the installation was that if there was a certain percentage of the home that got renoed, then they would have to go through permits and the electrical would need to be replaced. It wasn’t a decision based on the technical. It was based on a financial. So, technically, wet insulation with category three water needs to be removed, But from a financial cost, they didn’t wanna open the walls. That is original construction dust and debris demo. How is this building clean for fire? And you’re gonna see this all the time. Yeah. I know I know, Scott. Right? When when it will not grow, I give them the benefit of doubt. It’s like, okay. Mold won’t grow on the plaster because of maybe, like, the sort of the same thing as, like, on concrete. I don’t buy it, but we’re looking at this, and this is all exposed. In here, in this building, because of the age I walked through it, I was I was fully PPE ed up. I was like, I bet you there’s lead here. And so I ran lead tests, and I found lead paint in the cutoffs. So that meant that this was also now a lead exposure, and all this dust was lead contaminated dust or potentially lead contaminated dust. Worst project, but if this is gonna go to a general builder, and their people were gonna go and work in this. And I had to fight the insurance company tooth and nail. In the end, I lost that one. The insured gave up and just said, you know what? As long as they get us back to rebuild, I we’re just gonna go with it. You can’t you can’t win them all, but that one I knew we could win if they had the guts to keep going. It’s just they didn’t have the financial means to fight it. Well, I share this one with you. Occasionally, you get weird stuff, and sometimes you can’t step onto it alone. Now this is an extreme example. But for you as a restore, extreme might be different. Right? You might be doing small smoke damages, and then you get a total loss, and you’re like, oh, I don’t even know where to start. You get somebody with experience. So you get a consultant involved. This was a former student of mine who took the fire loss specialist training. Top notch restore, went to the job, and then was like sent me a text and was like, hey, Chris. I have this project. I’m not sure how to handle it. Do you have a couple minutes for me? And I was like, oh, yeah. I got a couple minutes. So he calls me, and he goes, Chris, and he how are you? I’m like, good. What are you dealing with? And he’s like, I’m in a two thousand square foot apartment. So my mind, I’m in, like, an apartment down the street. And he goes, I’m in the living room looking at an eighty million dollar Picasso. And I went, I now know why you’re calling. And he goes, hey. This is a a unique situation. I’m dealing with some ultra high net worth individuals. I’m like, yeah. The the the Picasso would tell me that. And what we started to do is we looked at what when you get in there, you get overwhelmed by value. Sometimes you just like, you weren’t expecting. Like, I was expecting the call where we’re going into a regular two thousand square foot apartment. He wasn’t expecting an eighty million dollar Picasso when it threw him off. So he called me, and we started working through it. It wasn’t just any billionaire’s fire. It was the penthouse of a very, very high end hotel and apartment block. It turned out there was a suspected Chinese spy. He was a fraudster. He’s a businessman for that the FBI were raiding. And in the middle of the raid, all of a sudden, there was a remote device that was detonated, and it burned all the evidence in the apartment. And then it resulted in substantial heat and smoke damage. And when we looked at it, it was this hotel. It took several hours for the fire to be extinguished. So it was a hot fire in that vent, but it had moved through the entire building. And at the time, they were using the elevators, and the elevators were working like pistons. And so the contaminants went from the top penthouse all the way to the restaurant on the first floor. And this gentleman was, had had had caused the fire and or or allegedly had caused the fire. And when we were looking at this apartment, everything in the apartment had value. The couches the couch was a three million dollar couch. The paintings and artwork were worth over a hundred and twenty million. The unit itself was valued at about thirty. And the adjuster blew my mind because he wanted to treat it like we were doing an IKEA furniture pack out where we move everything to the center of the room, stack it all on top of itself, wipe the walls, and move everything back, and we’ll just call that good. That adjuster had no comprehension for what we were dealing with, and I don’t know his experience whether he was doing, like, normal residential last week. And then today, they’re like, hey. Guess what? You stepped up into the big league. But to give you an idea of the value here, there’s about a hundred and thirty thousand ultra high net worth individuals in the USA. We were dealing with the top five hundred in this building. So, like, there’s no no horsing around. You you f around, you’re gonna find out they’re gonna tie you up in a lawyer. Like, they will spend a thousand or two thousand dollars an hour for one lawyer, and that’s nothing. That like, that will put you out of business. So when you’re dealing with extreme stuff that’s bigger than what you’re normally able to handle, be conscious that you might not be in in the ballpark. So when we did this, I was like, okay. This is a major risk because these people sue for fun, and I don’t have the funds to defend myself. You don’t have the funds to defend yourself. So we gotta do this one really tight. And so you protect yourselves that way. But when you look at it, you go, what are the risks? So any job you look at this, you say, is there a risk of bad press? I don’t care if it’s a billionaire’s job or you’re doing a job at the school down the street. Is there a risk of bad press? Is someone gonna get sick? So if you’re doing a hospital, a school, a day care, that press is high. A residential house, low. Right? Like, what’s the chances they’re gonna get there? But twenty kids makes for a good story. Be careful of press. Is there a legal responsibility or a legal risk? So we anything we do, we have contracts. You have a process of taking your job from start to finish. There’s a legal process that goes with that. In that legal process, you’re basically looking to see how susceptible or how willing is the other party willing to go down a legal process with you. Billionaires, like sport. A school, not so much. A resident, not normally. So where we normally do our work, there’s probably a lower legal threshold. But when you screw the job up, yeah, there’s a there’s a higher legal threshold for when you when you screw up. So you look at what’s the legal risk. Well, low if I follow my standard operating procedure. So I can eliminate repress liability. I can eliminate legal if I follow standard operating procedures. And then we look at our insurance policy limits. Are we gonna get paid on this? Do we have the coverage ourselves? And then are we working with an outside expert? So are we going with indoor, environmental, professional? Your price should reflect the degree of difficulty or the risk that you’re taking on. So you’re not gonna charge the same for that hotel as you would for doing a residential job. That hotel, you’re gonna up your rate because you’re taking on additional legal liability, plus your skill set to do the job is high. Would you do that same thing if you were doing, like, a hospital? Your rates are gonna be higher in a hospital than they are if you’re doing residential structures. So we look at all of that when we come up to determine our price, and then you look at what is the value of something. So the value of art, when you look at this, in that particular job, that eighty million dollar Picasso, this is a painting, and that’s a painting restored after the oxidization process. So oxidization is one of the biggest enemies to high end artwork. It will age it on an exponential level. What we do with a with an ozone machine in four hours, I think is the equivalent of, like, ten years of oxidization. I might be wrong on the four hours, but I know one of the settings on your ozone machine, whether it’s four, eight, twelve, or twenty four or four, eight, or twelve, one of those settings is the equivalent of ten years of oxidization. So you’re taking years off of there. But if you’re exposed to oxidizers from other structures or other residents, all of a sudden, you’re now taking years and years off of that that, that artwork. And when people use it in higher concentrations, you’re doing bigger damage. The caution is when you do normal restorations, not when you’re playing in this world, but when you do normal restoration, you’re also running that risk that you’re oxidizing things like paints and plastics and TVs and electronics and everything else. You’re taking life off of it. So you apply it with some discrimination on that. Now, normally, you wouldn’t bring contaminants into high pressure. So when we started to look at this, we said, hey. We have an eighty million dollar Picasso. Normally, we put the building under negative pressure. Today, we’re going positive pressure. We’re gonna make sure that we keep the contaminants out of this building because I don’t want the other restorers’ oxidizers damaging the art. And we did that. We put a plan in to bring in New York fresh air, run it through an air scrubber, run it through dehumidifier, and then put it back in the apartment as positive pressure. That was to reduce liability, reduce risk of the artwork till we could get it out. No restore is gonna touch that. That’s a special handling. And then what we did is we made sure that we had the in the customer onboard with that that program. Now what’s important about this is that every job you look at, whether it’s health care facility, dental office, or someone’s home, what are you running the risk of damaging, and are is the insured ready to accept that liability of you putting your processes in? We don’t normally have that conversation, so it’s a big risk. Alright. Last poll, and then we’re gonna wrap this up and go to the q and a. What do you guys do to stand out? You perform furniture restoration. You handle high end or high value artwork. You specialize in wine handling, specialize in oriental rugs, or you provide general restoration services. So the answers are coming in. We’re gonna make this poll pretty quick. If you guys can jam your answer in there quicker than than not. Here’s what’s interesting is as the answers are coming in, I’m seeing more going towards general restoration services. If you wanna make money in this business, your skill set of being able to do what others can’t do is gonna set you apart. And when you’re in an area where you’re sort of doing what everyone else does, you become a commodity. So you’re not a specialized expert. If you’re not a specialized expert, you’re gonna be struggling to find revenue and profitability. It’s just it’s just what happens. If you’re in the business of doing dentistry and there’s a million dentists there, you’re gonna be struggling to get the customer in and get the right number. But if you’re doing the orthodontics or the surgical work, you’re gonna be in a higher pays pay grade than everyone else. Same thing with restoration. If you deal with the low end insurance companies, you’re gonna be there. If you, yeah, you flip that out. Ninety one percent of you are doing general restoration services. So that probably means you’re doing pack out. Maybe you’re in the in the contents cleaning, but you’re not in the specialty cleaning. You’re not doing electronics. We have no one doing oriental rugs. Oh, sorry. We had one doing oriental rugs, three handle wine, four handle high high high end artwork. Guys, you’re you’re in the starting point of restoration if you’re gonna get into this. If you’re gonna go into contents, you wanna be the person that saves it. Who no one gives like, no one cares whether you save drywall. Everyone cares. Like, if you if you save my desk, I’m gonna love you. If you save my drywall, I could care less. So the money is in contents restoration or historical restoration or restoring yachts or being able to restore an aircraft after electrical fire. You’re gonna find more money in those specialty services than you will inside of the, inside the normal run of the mill restoration. And the only way you can get there is if you skill up. So I wanna talk to you guys about selling here, and this is just a little bit of bonus because this I think this is important, is if you start looking at specialty being able to do furniture, what items could you save or do you what type of jobs would you get into if you were, let’s say, a a hardwood specialist or a furniture specialist? You’re probably gonna get into those million dollar homes or those five million dollar homes or the ten million dollar homes because the adjuster is gonna have confidence that, yes, they might not call you on all the small water damages for two grand. But when there’s the thirty thousand dollar water damage plus we need this table restored and that table’s worth a hundred thousand dollars, you’re gonna be the one that they call. You don’t even have to perform the work. You just have to know enough to get it to the right sub trade. But that call will lead to more revenue and bigger revenue with more margin. Now for those of you that are hunters or outdoorsmen, the restoration of taxidermy like a head mount is maybe seven hundred dollars. If you don’t but that’s a hunt of a lifetime. So someone could’ve worked ten years to get that mount on their wall, and then all of a sudden, it’s damaged with fire. And you’re like, I’m not really sure what we’ll do. We’ll put chemical on it. I’ve watched technicians put weird stuff on the taxidermy and ruin it. And if you took it to a taxidermist or you built a relation with a taxidermist and said, hey. Do you do fire restoration? Yeah. There’s taxidermy that can repair an antler. They’ll do a a synthetic mold and get the antler to look exactly like it did before the fire. Paint it up. Do it all up. It’s gonna cost some money, but you can restore that. Do you think that you maybe earn that client in the future? Hundred percent. You’d now hold that client’s client now holds you in a different light. So you’re gonna be getting these wins, but I’ll tell you, no one really cares about your carpet and your drywall. They care about the things they own. Oriental rugs is another one. You don’t need to know a lot about them, but you need to be able to come in and identify, hey. I noticed you have this rug here. That’s a very beautiful rug. Where where did you get that from? Don’t make the assumption. Hey. I got it from you know, it it’s it’s an oriental rug that I I I end up getting or it’s a it’s a family heirloom. Okay. How long have you had it? What’s the value? I had one fire loss where we had they were Iranian Persian rugs, and there were seven of them. Not one of them was worth less than ten grand. Okay. If we didn’t know that, probably we rolled them and threw them out or rolled them and treat them rough. Instead, we got carpet specialty, and that job went amazing because we had seven Persian rugs that were dealt with, and we just said, are those Persian oriental? Other Persian. Okay. Cool. How much are they worth? Ten, ten, ten, thirty, eighty. Cool. We’ll deal with those. That’s where you become a specialist. You don’t have to be the one that knows how to restore it. You just need to know enough to get the right sub trade in and talk about it. So just focusing on having those relationships and then going and marketing that service, you’re now different than ninety three percent of the rest of the industry. The ones that are doing wine, if you’re in wine country like we are here, having a good wine consultant with you is probably pretty important when you’re going into a fire damage and there’s a million dollars of wine that is is exposed. This is another one. Number one, if you go into a house and you see a room or a hallway dedicated to artwork, you better stop and pay attention because that artwork normally has a value, and and usually it’s a monetary value, especially if you see it’s got a built in wall. So if you see on the wall that there’s a built in inset and it’s got lighting, that is something that is a prized possession. You should stop and ask questions. Joe Myers is great when he does this presentation because he’ll stop and be like, oh, that that piece of art looks fantastic there. Can you tell me the story behind it? And all of a sudden, you’re getting the story of the artwork, and they’re telling you, oh, this is the painter. Here’s the value. Perfect. That’s what I need to know. Who normally handles your artwork? Oh, normally, it’s done by this gallery. Okay. Perfect. Let’s call them up, and let’s get them to come in here and get it out of the way. We don’t need to deal with it. You just need to know enough so you look like the expert that can deal with it properly, or you can take control of it. And I saw one of you guys earlier said, hey. You’re the contractor. You make the call. Yeah. You do. And then you take control, you act as if you’re in control because you’re asking the right questions, and you’re handling the items with the right respect. So we did actually get a couple questions just surrounding the standards that we talk spoke about earlier in the webinar. So do the standards touch on heavy metal particulate from a fire loss? Do you know? So I’m gonna say the I I believe the wildfire standard does, and I don’t believe the the residential fire standard does, or it does not. There’s it’s in draft format, so it it hasn’t hit its final format. So I’m I’m gonna just say that considerations have been given that when you deal with something that you believe is a risk, you should call an IEP or have a hygienist come in and do testing. So in some cases, it does, but does it specifically call it out as a major risk? Heavy metals may fall more under a health and safety concern than it does a cleaning concern, but that’s probably a light answer. It it it probably doesn’t fully address the the the concern of heavy metals. That’s a good question. You can easily address it though as like, hey. We have a lithium ion battery that just burned. We’re gonna get tested for metals. That would be a reasonable step to take. I think that would be prudent. And your justification wouldn’t be for it could be for cleaning, but your primary justification is health and safety. So use your risk assessment as is there any potential exposure to heavy metals? And if the answer is yes, then we need to use an IEP to test. Perfect. During the smoke and fire mitigation process, workers are wearing proper PPEs and using the right equipment and site protection. Is there a clause in the ICRC standards now for removing affected contaminant materials under cat three? This is a common challenge from the insurance reviewer to scrub our estimate. Under cat three. So under cat three, a contaminated material must be removed, and you kinda got bounced around. So this is the s five hundred. So this is a water damage question, but, you have to bounce around. So you’re you’re saying that you have a material that’s contaminated, and then you could refer to the reference section in the back of the standard and say, in those materials, let let’s say drywall, contaminated three drywall needs to be removed, and they’ll make the argument, well, it’s dry. So we’re so we’re good. No. It doesn’t say in the standard that when cat three water dries, it’s now category one. And so you have to refer to your standard and do that, or you get an expert in to come and argue it. And, I’m so I did a couple videos. This this this kind of, this kind of where we’re going is there’s a lot of, bullshit in the industry that is outstanding where adjusters say one thing because they were told stuff or they learned stuff ten, fifteen, twenty years ago. What we’re gonna do is we’re gonna have videos, coming out. So I did this. I did a test run. And if you look, like, there’s some videos, like, seven reasons why I stabilize a job. I’m creating some stuff that you guys will be able to go in and not be the ones to say it. I’ll say it for you, and then you can give it to the adjuster as an instructor that’s telling is is is saying exactly what is. So when you have this question like, hey. Category three water is dry is now category one. It is not category one. You can just send them a link to a video, and you don’t have to be the one getting into the battle. Oh, I’m hoping that works in a as a benefit to you guys. But regardless, we we gotta educate some of the other sides, so it’s just part of an education process. We’re getting real here at four thirteen. Okay. So this one actually just came in, so I’d like to get to it. So equipment left at fire jobs. So example, a dehu. What do you recommend for deodorizing them after? We had cases that the equipment odor lingers even after the cleaning. Yeah. So some of it is how you set up and, like, what equipment are you using? Are you using a desiccant or are you throwing an LGR in there? And if you throw in your LGR in there, you’re exposing it to some corrosive materials. You could consider doing a fresh air exchange depending on the on the so so the question about deodorizing is you got now particulate in your machine. So your goal should be is is maybe you’re setting up a clean room where you can process the air through filters coming into your clean room. So you’re getting a low particulate count, and you’re processing the moisture out of the air. Those are are valid techniques of, like, not just throwing your equipment into the contaminant because now you’ve got contaminated machine unless that’s the purpose of the machine, but you will watch it corrode. So you might want to build a clean room, put your dehumidifier in there, bring fresh air into the chamber through filters, either through a negative, air machine or, or an air filtration device, and then have the the processed air go into the building. It’s a different way of doing it, or you might use desiccants or you might use heaters. Right? You might use some different technology to to control the humidity in that contaminated environment as opposed to putting your equipment in the contaminated environment. So who is responsible for doing a risk assessment priority to do to do any restoration? The public adjuster, the insurance adjuster, or the restoration company? So it falls on your your duty of care is for you to protect your workers. So it’s it’s you as a restorer, are are responsible for doing the risk assessment, and then you’re responsible to do it every day. So you might have things like electrical. Right? So we have electrical that’s exposed to contaminants. How do we how do we reduce that exposure? Well, we could have it expected by electrician to say, yeah. It’s still good to use. That you know, you basically go through your assessment saying, okay. We got trip hazards, slip hazards. Can we eliminate them? Can we can we reduce them? Can we put engineering control in? We’ve got a high particle count. You’re the one doing it. And then anytime that you come up with an OSHA I’m gonna use OSHA for this example. But anytime you come up with an OSHA concern for health and site health and safety, you then have an engineering control. How can you reduce that health concern? So now you have justification. We put an air scrubber in because we had a respiratory concern. So we go back to the air scrubber is, like, that is the reason you would do it is we have a high part particle count. We have the readings. We have it printed or saved. Put our equipment in, and we we lower the the risk. That’s OSHA. And if you have to, then you call up OSHA and be like, hey. This is what we’re doing. Is that good? Of course, it’s good because you’re doing a respiratory protection control. That’s very good. And so then there’s your justification. But what we don’t do is most people don’t do the rest the risk assessment. Now public adjuster probably should do their own or the adjuster should do their own. They don’t. They’re just not trained for that. They may even have an exemption in Canada. I think we have an exemption for workers’ compensation that they don’t I don’t think adjusters qualify for it. So, like, they’re not even bound by those rules. I might be wrong, but, yeah, like, as a contractor, you’re responsible to to do the work and do the assessment every day and verify the site’s safe. You’re the primary contractor in charge, and you’re actually responsible for all the contractors on-site that are your subs. I’d like to circle back actually to Betsy’s question just before the break. Sure. She said, I’m wondering about total loss. Is there depreciation, say, on furniture category across the board? Also, we do packouts. I’m wondering if there is a system with boxes and storage. So is the industry mainly doing barcode system with a scan gun and thermal printers? Yeah. There there’s no like, there’s handwriting codes right now. There’s there’s no there’s no industry standard. It’s just who’s got the technology to do contents in the way you wanna do it. Like, there’s systems that work. �Թϲ����� works great with a handwritten label put on. There’s barcode systems out there. There’s no standard there. For the like, your question, normally, it’s white boxes are clean, brown boxes are dirty so that it’s easy for you to see what needs to be cleaned, what has been cleaned. And then the other question about total loss, there might be depreciation if they cash settle. You can’t determine that because you don’t know the policy that they bought. So if they bought a actual cash value policy, then they get depreciated amounts. If they replace the item, there’s usually no depreciation. They get the the replacement plus tax. But if it’s if they decide to take the cash, then they get the depreciated amount. So that’s an adjuster homeowner question. But from a restore standpoint, if you believe that it’s gonna be a nonrestorable item, document it really well, get the label, try to get as much information as you can on those items so that it makes it easy for the homeowner to, to make their claim. So while packing out contents from a fire, is it best practice to have a vac contents first and then pack out? Yeah. So you could preclean contents. If you can reduce the contaminant load to your shop, that that’s that’s beneficial. Also, if you’re not able to get to it right away because something else comes in, you’re reducing the likelihood of of of that damage being coming permanent. So you’re reducing the contaminant on that item, which means your restorability should go up. What’s really good is if you do the preclean on the item, which, let’s say, it’s a HEPA vac or maybe it’s a wipe, and then it goes into a box, comes to the shop, and tomorrow or later that day, you can get at it, you’re gonna be able to have a higher save percentage than if items sit for a month and they sit in storage. It’s just the contaminant has less time to work on those items. So, yeah, you’d you’d have a higher the higher ability to save more as a general rule. I like that idea. Like, Is HEPA vac the preferred method of cleaning for wood framing and services? Tough one. Depends on the the it’s a good preclean. And then, you know, are you dealing with actual scorch on there? Is it sanding? Like, is it small damage? Is it big enough damage that you’re like, no. We’re bringing the ice blaster in, and we’re going to on it. You’ve got now emerging. You’ve got lasers coming into the market, which are great for small areas. I’m seeing some lasers that were great for large areas. Like, they’re starting to expand the pattern. It used to be, I’m gonna say, three inch circle. So there’s different lasers that are hitting the market. So your consumable cost is down, but your equipment cost is up. Things like that are starting to change it. But to to answer your question, it kinda depends on what you’re doing. Like, if it’s just settled like, let’s say it’s a garage and it’s settled particulate that hit the surface, I’m not blasting it. It’s not embedded on the surface. Do a HEPA vac and maybe you’re doing gonna do some kind of wipe, And it depends on your surface, but or it depends on what you’re dealing with. Yeah. So do you recommend when we have PEX pipes burnt and the adjusters refusing a repipe? Sorry. What do you recommend? Oh, I so, again, what it comes down to is is when you go back to that assessment, is it heat damaged or smoke damaged? Can it be reversed or cleaned? And then if you’re like, hey. Like, PEX is pretty durable, but if it’s heat damaged and so you’ve got scorching on it, then it’s like, no. That’s heat damage. Like, I can’t zero warranty coming from us. I can’t clean it. I can see a discoloration on it. If you do clean it, make sure you follow manufacturer’s recommendations for what type of cleaning you can do. But follow that process of every time you go into a job is, is it heat damaged or is it not? If it’s not heat damaged, is it smoke damaged or is it not? If it’s smoke damaged, can we clean it? And then should we clean it? So we could clean it, and there’s no risk to it. So then do it. If you can clean it, but you shouldn’t clean it because there’s a risk to it to your business, then you’re gonna be like, then we get a liability sign off or we don’t do it. But, yeah, with an adjuster saying, like, I’m not paying it, then it’s like, well, then you’re covering the warranty on it. And you would just write in writing that we’re not covering the warranty on any PEX lines, and you put it in writing. You send it to the the homeowner that we are not warranting any of the plumbing due to it being heat damaged. And in our opinion, it needs to be replaced. Your insurance company will will you know, you’ll have to deal with your insurance company or you send the adjuster a message being like, we’re not warrantying it. Is this something you plan on warranty? Most times when you ask them to put a warranty on stuff, they just they fold up. Right? They’re not gonna do it. You said no, and your business is an independent business. I don’t care if you’re on a program or not. You’re not warranting some somebody out there. Like, it’s a third party. It’d be like me telling you that it’s okay. You’re gonna leave that pipe in there, and don’t worry. And then you’re like, well, if it bursts, what’s gonna happen? Like, I don’t know. It’s for you to figure out. You’re saying replace it. We’re gonna replace it. And so then you just tell the homeowner. Homeowner is a decision maker. Don’t make it your problem. If their insurance company if they paid for shitty insurance and their insurance company doesn’t wanna do it, that’s between them and their insurance company. Don’t make it your problem. I’ll do whatever you want. You want me a bulldozer house? I will. Does that make sense? Like, it’s just sometimes we get wrapped up in their relationship, and we shouldn’t. Like, so it’s like a like a fighting couple. Let them do their thing. You’re not part of it. Just walk away. Yeah. Well, the so the h o r Right. I That’s and that’s exactly why your recommendation is just it. Right? I have to show you a laugh. It’s still going away. Just like a look. Just like a married couple fighting, sometimes you just let them deal with it with their lawyer. But that’s exactly it. You just you step back. You did what you’re supposed to do. You said, hey. This isn’t restorable. My professional opinion, not restorable. And and then let them figure it out between the two of them. The adjuster’s gonna literally have to come back with, like, some kind of explanation of why they know more than a restore. Thanks. I’m just I’m loving this chat. This is fantastic. Another question another question came in. What are your thoughts on involving a hygienist for a restaurant fire and smoke damage? Should this be done to transfer liability and agree on scope of work and standard for cleaning? Yeah. So so so commercial spaces. So so determining a hygienist involvement, in a residence, you’re talking to the owner. And they have visitors, but, like, they’re in control of their family, so you’re you explain the risks. Like, you know, there were some chemicals burned under the kitchen. I think we should get a hygienist for that. And that’s a discussion, and then it might go to the adjuster. On a commercial environment where you have people that are consuming food, it comes back to what is my what is the press gonna do if they got ahold of this? So what publicity would I get if this went sideways? I don’t want the publicity of a restaurant being having a bunch of people get sick or say they got sick because of us. So I would have a a hygienist involved where there’s food involved. So it becomes one of those ones like, is there a risk for for legal and press? If there is, get somebody else in to hold the bag and and pass it on to a hygienist. And the beautiful part is you get a hygienist in. Hygienist is gonna say, hey. I’m not qualified to to look at the at the ducting in the for the for the kitchen. That’s a health inspector. Cool. The health inspector comes in. Like, you don’t need to be the the the answers for everything. Just call the right people. So food related, deal with the health department and have them make the call, and you make sure you get them involved. Why? Because I guarantee the adjuster is not calling the health department to see if they have to do something that they don’t wanna pay for. You call them and be like, hey. I’m the one doing the work. How do I do this work properly? And have them involved. That’s your job. So I think maybe we’ll do one more question. I know people are eager to get off to, their Thanksgiving or whatever their plans are. Although we could listen to you all day, Chris. I feel like you’re so knowledgeable on all this. No. It’s awesome. Last question is, how can you push for dry ice blasting instead of particulate blasting? So it it depends on your reasoning. If you were to go let’s say that you’re and and particulate blasting, let’s say that you’re you’re talking, like, soda blast versus, like, soda versus dry ice. You could you could make the argument that the cleanup is less, so we’re not gonna have all the soda everywhere. Now soda is a a good system because the soda is absorbent for odor. So it’s in some ways, it’s better than dry ice. Like, from a fire standpoint, it might actually be a better solution and worth the extra cleaning. So you could maybe make the argument that, hey. You want dry ice over a soda is because the job’s gotta turn around faster. So you’re just gonna deal with the wood chunks that come off. The ice is blasted out. It dissipates, so it gasses out. You remove it. And now you’re just cleaning up wood chunks, and so it’s a faster cleanup. Whereas with soda, you’ve got a substantially bigger cleanup but lower cost of operation on it. Is there a right and wrong way? I like soda with the cleanup. My text didn’t, but I like it because I like the result of it. The dry ice, I also like because it’s they’re all good systems. Like, I like the laser too. Super expensive, but the laser has, like, no cleanup. Although you don’t know what gases your the plasma is creating, But laser has an effective place in there too if you control the gases, so then you have no cleanup. Or or maybe sorry. I’ll say no cleanup, but there’s not been any research. Like, not like I’ve gone back and checked for residues after, like, what did the plasma create, But you have less visible cleanup. You know what I mean? Like, it’s it’s it it gives you a good result without a lot of debris around. So you’re dealing with a gas then. Maybe you’re creating something different. I don’t think there’s been any research into it. But, yeah, it’s just a different approach. Justifying it just comes down to selling the reason why. Why are you doing it? What is the outcome? What’s the result? How is it gonna save the insurance company money? Or if it doesn’t save them money, how does it reduce the problems that the insured’s gonna come back and call you for more problems? Awesome. Thank you so much, Chris. Is so late. That’s that’s a long that’s a long session. Thanks for sticking around till the end. Absolutely. Well, we wanna thank everyone once again, and thank you again, Chris, for sharing your knowledge with us. Have a good one. Bye, guys. Bye.

Hello, everyone. Hello. Welcome to the Water Damage Boot Camp. Thank you so much for joining us. I’m Kristen. I’m the event specialist here within Circle. This webinar, will cover topics such as, source of loss versus cause of loss, categorization of water, dry standards and drying goals, equipment placement and calculations, and so, so much more. This webinar is eligible for four IACRC continuing education credits. So without further ado, the reason you are all here, I will pass it over to Chris and Ken. Beautiful. Well, good morning, everyone. Good afternoon, depending where you are. Couple things. We’re gonna do polls. If you haven’t been to one of these, when we do polls, it’s completely anonymous so that anything that you answer in there, no one’s gonna see your your information, your answers. You can be truthful. We ask some sometimes difficult questions and, and just answer them truthful, and and we’ll have a discussion, kinda crafts what Ken and I do, through this. We have a a a framework of how we’ll present this, but then we usually make sure that we we talk to some of the points that you guys are experiencing. The other thing here is this flow, but what we did is we followed through hydro. And so if you’re trying to figure out, whether you’re gonna implement hydro in your business or you have hydro and you’re trying to figure out what some of the stuff is. As we work through here, this is the workflow that hydro has and then this is a little bit of the learning that goes around that. So it’s it’s supplementing what you’re doing with the tool and then it gets a a lot deeper than that with the discussion that we’ll have with Ken. So we’re gonna go through. We’re gonna source a loss, cause a loss, categorization of water. We’re gonna talk about drying chambers, psychometrics, and vapor pressure differentials, how it impacts materials, so the material permeability, and then drying standards and drying goals. And then we’ll get into a little bit of a moisture mapping discussion. I I saw a bunch of questions in the in the registrations about that. Creating conditions for stabilization and drying and why you’re stabilizing. There are a lot of questions about stabilization, Ken, that was coming in on registration. Equipment calculations, we go through that piece and explain how it can help and hurt your business. Placing equipment, reading dehumidifiers, there’s inspecting to completing, and then we also have a little bit of some of the constant, battles that happen, in the review process. You’ll get some arguments, and then we have some rebuttals and some discussion points around that, coming from this the, the standard and otherwise. First poll, we’re gonna start with four polls, get a bunch of polls out of the way, and this is more so about who you are and what problems you’re dealing with. What part of the restoration industry do you work in? And it could be part of the insurance industry. We got restoration contractor, insurance carrier, TPA, sub trade. We put in an other category this year. You might be coming in as a consultant or something that’s on the side. It might be a homeowner. We’ve had a few of them register. Right now, it looks like we got mostly restoration contractors, some insurance carriers or, adjusters, and, no TPAs this year and no sub trades so far. I’m excited to see we have some insurance, company interest. This is a this is excellent. Yeah. Yeah. We’ll give it a few more seconds. It’s, rallying in, and, looks like a, a ton of restores, one sub trade, couple sub trades, one TPA, and three or four carriers. Perfect. And then we got a bunch of other, and and I I have no idea what your other is. But that’s okay. Kristen, if you wanna close that, we we we’ve got our audience. That’s awesome, guys. Well, welcome. And if you’re not on a restoration contractor side, welcome welcome into this. It’s we’re glad you’re here for this discussion. Alright. The next the next part we have is what percentage of your jobs are reviewed where price and scope are challenged? And this is could be in the TPA environment. If you’re not in the TPA environment, it may change a little bit. Can I don’t know if you like, while these guys are answering, this has been a change in the last twenty years that you’ve seen is is the review process? I know you talk a lot about it, but, but this is something where we’re seeing right now. The numbers are coming in. Zero to twenty five percent is, it’s actually it’s almost almost split down. Zero to twenty five, a third of people aren’t being reviewed or very little. Twenty five to fifty is twenty five percent. Fifty is seventy five percent of the time is twenty five percent, and seventy five to a hundred percent of the time is is seventeen percent. And it looks like it’s sort of holding those numbers. What I find interesting here is that I first of all, I I think it’s important everybody understands that this is a very geographic phenomenon. Here where I am in Florida, as you can see from my background and no. I’m not really on a beach because I wouldn’t be wearing a shirt like this. I’d be wearing my bikini, just so everybody knows. But, no. Actually, I I what I’m really surprised about is that here in Florida, it’s really common practice that the majority, if not almost all of the contractors’ claims, are challenged after the work is done. It’s a very Floridian practice. But if you go to other places in the country, other states, it’s amazing how many contractors have their files, challenged, you know, only a a few times, like, maybe a couple of times out of ten, and it’s, it’s not very common. So I I think geographically, the the practice of file review, aggressive file review, scrubbing the file, these types of expressions to try and manage the, loss severity. This has been, something that is has become regionally focused in different pockets around, America. I know we have a lot of, people from other countries here, Australia and Canada, which is awesome, and those practices might not be as common as they are here in America. For what it’s worth, California, Texas, and Florida. Those are the worst states for file reviews. That’s what I have found. Yeah. It’s interesting. And so we got the poll finished up with thirty one percent, zero twenty five, twenty six percent. So it’s it’s, like, you know, substantial review across the board. The majority of them is is twenty five to a hundred. We got seventy five percent of people there. Very cool. Our next poll we got going on is what percentage of your jobs are reviewed where quality of restoration is there? Now this is different than a a review on on your price. Is someone coming back and reviewing your job and saying, hey, you you follow the standard or you didn’t follow the standard? So zero to twenty five, twenty five to fifty, fifty to seventy five, or seventy five to a hundred. And, the quality is is these are would be considered like a two way review where it’s like, hey. We we noticed you did the standard. You followed a bunch of the the the literature there. You were following a bunch of processes. That makes, sense. Hey. We noticed you didn’t follow this. We should go back and fix it. And zero to twenty five is leading sixty seven percent. It’s really no. This is interesting. So Ken does a bunch of legal work, and he does a bunch of file review or or site inspections. I do a lot of legal review, and I do a lot of dispute resolution. And in, I’m gonna say, all of my cases, and and I’ll I’ll I’ll maybe preference it with maybe there’s one that wasn’t, none of them received a technical a competent technical co review. And so I haven’t seen that yet. But, yeah, try challenging labor rates that do amount of I would say pricing. A bunch of this stuff is is is on the quality. Did you did you dry the building? Are they reinspecting it? So it looks like the majority, sixty six percent said no or zero to twenty five. Twenty five to fifty is seventeen percent. So we’re sending the majority is is limited review on quality of restoration. And and I saw one of the comments is, yeah, they won’t care about price. And and it’s easy. Actually, it’s interesting because price is one of those things that you can easily review, whereas quality requires a skill set that is hard to, achieve. Can you guys This question, This question, Chris, I I kinda got a scratch on my head. How many of the people that read this question, are thinking that when a the file is being reviewed for quality that the equipment use duration or quantity is not a reflection of quality. It’s a reflect reflection of practice. Because I think that the drying strategy that would have x number of pieces of equipment for extended time, is that a quality, a challenge on the quality of the drying, or is that were you when you formed this question, were we talking about something other than equipment counts and duration? No. It was it was it was quality. You know? Are you are you are you are you doing a proper, decontamination of the environment? Someone checking to see if category two is properly handled. It’s it’s in those sense. So The numbers, I think, were similar to last year. And finally, got one last poll. Thanks for participating, guys. You guys got a huge participation amount, coming in. I really appreciate that. Alright. Our next poll is how much more difficult is it to make money these days compared to years past? And your answers are, I haven’t been in business long enough to know. It seems easier, and our books show it. It’s been getting more difficult. It’s hit and miss. The longer I’m in the business, the harder it gets, and we’re struggling to be profitable or not profitable. Again, no one can see your answers, so you’re free to answer it. And, again, appreciate your your honesty. Yeah. And we’re starting to get in that a lot of new people, haven’t been in business long enough to know that that’s a predominant answer. It’s been getting more difficult. It’s hit and miss, and and that seems to be the trend that we’ve seen over the last three years of doing this this session is is that number is up. Last year, I think it was thirty percent. This year, it’s sitting at forty three percent. The long term in the business, the harder it gets is is trending right around eighteen percent, and we’re struggling to be profitable or not profitable. I tend to believe those are more full services restores, but it’s six percent that are there, and then that can be true. And we’ve seen even very good mitigation companies sort of get left in behind the pricing trends, and so we’ll do that. Perfect. So it seems, Chris, that the, you know, it’s been getting more difficult, and the longer I’m in business, the harder it gets. If we combine those two, sixty percent of the attendees here are having challenges being profitable. Yeah. Sixty six percent if you take this we’re struggling in there. So it’s a two thirds. And just to give you an idea, we did a an estimating boot camp about a month and a half ago, and we did the profitability, boot camp or master class back in January, February of this year. Just for context to this, that number is about the same number as it was for those other ones. So so you guys aren’t alone. It a lot of people are finding it more more difficult to to survive today. Alright. Here’s where we get started. Thanks for your answers. The symptom is focusing on the price. The solution is focusing on the quality, and this is something that Ken and I both have done in our reviews. We start looking at how do we how do carriers and contractors work within the industry, and one of the symptoms that you’ll see is focusing on price. It’s the easiest thing to focus on because it’s the one metric that you can have an opinion on without anyone checking it, and it’s a discussion. It’s it’s a battle of opinions. In Canada, there’s a lot of changes that have taken place. Several cases, that have gone to court have actually determined that if you’re a preferred contractor of the insurance carrier, then the insurance carrier’s actions are no different than the contractor’s actions. They they tie the two together because the carrier is bringing a preferred in. Therefore, the solution in Canada is probably gonna have to move to a quality solution because the courts have now tied the contractor and the and the insurance company together, and, and they’re bound. The solution that we start looking at is the legal processes in Australia. Australia, the insurance company is bound with the contractor. The US, there’s still some some division there, and it depends on where you are as Ken said. It’s getting closer. I don’t know if you got anything to add to that, Ken, on the percentage of files that you see go to a courtroom where where they’re connected. I don’t know if you’re involved in that very often. Yeah. We’re we’re seeing that out here in Florida that it is, getting more, aggressive. The trend that I’m observing, though, at least on the files that I’m involved in, is that, you know, there are depositions that are taken. There are files. There are experts files that are reviewed, experts that are asked to review those files to go to the jobs and to explore the the project, interview the policyholder, and they the the process, the legal process goes back and forth for the duration that tip is typical of a legal, lawsuit. It’s usually at least a year and sometimes as much as two or three years before the court date. And then they take it right up to about two or three days before the court date, and then they settle. And it’s a it’s a it extends the the whole dispute process for several years and, of course, lots of expense because of the lawyers and being involved, but it never actually makes it to the court. Now there are some exceptions, of course, where it does go to court, and that’s where the, you know, the experts have a a a field day, you know, going back and forth, and the attorneys get more aggressive and vocal, and it they’re they’re never much fun. But, I find that they settle before it actually goes to court for whatever reason that is. Yeah. And then The one thing I do wanna say about your slide here really quickly, Chris, is I was thinking that the symptom is focusing on the price. The solution is focusing on the quality. What I have noticed is that the insurers typically seem to approach the contractor with the understanding or predisposition that all contractors deliver the same product. And I think that’s the the the foundation of the error is that we are not all the same. And after reviewing many, many files, like I know you have, Chris, I’ve seen a grand difference in the quality of mitigation, performance among contractors in our industry. And so focusing on the quality is a legitimate focus. And what I particularly am resistant to is when there is a, quote, competitive quote after the work is done, that they found a competitor to produce a scope of work that is contrary to the original contractors. And they say, see, it could have been done for less. This is a really if you ask me, I think it’s a very poor practice because we don’t all deliver the same product, and we don’t all have the same level of understanding and competence. It’s not like we are all delivering the identical product. And I think that it it’s really difficult for us as contractors to say, that contract over there is different from us because of and then you fill in the blank, whatever it is on their quality control thing. But if you have a unique practice that you are particularly proud of, I would showcase it to say that this is your hamburger for the sake of discussion. This is what your product looks like compared to what their product looks like. And I think that your level of education should also be showcased that while you might have thirty years experience, the person who prepared the competitive quote might be a a new individual that is still learning the ropes of this, craft. And I think these are the, elements that should be, mentioned to those who would rely on a less on a second quote from an unknown source. I think that’s a good way of saying it, rather than the contractor that was on the job site and had to make go through the exercise of making the difficult decisions in how to make a competent mitigation strategy on that particular job with its specific needs. We’re not all No. No. And and I don’t think you’re wrong. So so when we talk about the legal process to that point is if you were to come in and provide an estimate or a quote, the most amount of money you can make is that number that you wrote. So if it’s a five thousand dollar estimate or a five thousand dollar invoice, that’s the most you’re gonna make on that job. And then to what Ken’s saying is now you go into a review process and someone else writes a quote or you get a peer review from from someone in the office saying that these prices are the wrong price, and there’s a negotiation that takes place after you’ve done the job. Well, you’re taking dollars off. So you’re negotiating on something that the work’s already done, and now you only have money to lose. There’s not really money to gain in that process. And then you also have the other side, which is the workmanship side. If you have deficiencies or you need to go back and repair some stuff or you left stuff off the scope, you also lose money when you have to then do that extra handling and carry. You’ll see that a lot on the rebuild side, little bit less on the on the mitigation side, but you’re still taking dollars off the job at this point. Now everything after that contract is signed or that invoice is delivered, I consider this the legal process. It’s a legal process of sorts. It’s a it’s a collections process. It’s a getting paid process, and then it moves into, the dispute process. So you get into an a little bit further, you get past the initial reviewer, you might be inside of a senior management discussion that’s taking place inside an insurance company or it goes from a reviewer to an adjuster, and that costs you more money. That’s time that you could be spent out working on your business that you’re now navigating through this loss of dollars, and it’s reducing your profitability there. If you move to the part where Ken’s talking about it, now you get into an appraisal position. You’re paying a party to represent you. It gets really expensive. Representation is if you find someone new, they’re probably two hundred dollars an hour, but it’s like two hundred to five hundred an hour to find someone to represent you. And and and they have to be trained and qualified and a specialist to be able to make that argument for you. So you’re finding somebody of a very high, experience level and they’re very niche in their skill set. You now are are starting to spend money. What you’re actually gonna do is probably pay money out of pocket. You lost all your profit on that job, and now you’re defending your your business reputation for the future. So you’ve decided that you’re gonna go into this dispute resolution to get the win because you’re trying to send a message to the other side no different than that’s what they’re doing to you. If this continues and it doesn’t get resolved there, you’re gonna go to trial or you’re gonna go into court. As Ken said, this may you’re in the process where you go through an appraisal or you decide to avoid appraisal and go straight to court. When you’re moving towards that court decision or that that court process, you’re gonna spend a lot of money getting there. You’re gonna lose a lot of dollars. Nobody wins in this situation, but what this is is this is a battle that you’re taking and you’re putting it on someone’s doorstep to send a heavy message or to change the precedent of a case. Both parties will fight tooth and nail. It’s hard to come out as a winner. At this point, everyone loses, but there’s a there’s a higher purpose or the reason you should be doing is a higher purpose. If you think you’re going to trial to win to get paid, you’re losing money along the way. There’s no one that comes out of trial or that process that wins. I’m gonna say that, but now I’m gonna say to Ken’s point, there’s some jurisdictions where it may pay if you are in the right to win, but it’s it’s a long process. It a lot of energy out of your business. Ken, you you live in this in this world. Any any, objections to that? No. Actually, I think you covered that really well, Chris. I’m noticing some of the questions that are popping up in the the feed, and there there’s a one individual who’s asking about these alerts, high temperature alerts and and this sort. Is it do you have any comments about these alerts? Yeah. So so we’ll get into that when we get into, sending a drying plan. Ken and I talk about that a bit. All I’ll say is that the alerts inside the app are there to protect your technicians from making simple mistakes. The high temperature, you set the temperature range inside �Թϲ�����. So it’s a �Թϲ����� question. Tell you what, let’s get to it at question period, and and we’ll continue on. But it’s a good question, and I’ll make sure if I don’t cover it at the question period, let’s cover it when we get to, drying chambers. And and and I’ll explain how we use those those temperature alerts in, in hydro. That sounds great, Chris. I look forward to that. So we also talk about claim documentation and drying documentation. There’s a little bit of a difference here when we when we look at this. The two types of documentation that you have, and it’s because we serve a different party. If you only serve the customer, you would only be worried about drawing documentation. But because we have this relationship that’s really close to the insurance company, we get into the claims world, and we start to get into their nomenclature of using their terminology. And we also start catering to their needs, which is helping the customer, file their claim and substantiate their claim. So it’s it’s it’s not a bad thing. It just you have to understand that they’re completely separate. Insurance paying for water damage has nothing to do with how we do water damage. The payment of that contract, that contract could be written completely different than a normal, homeowners policy that you see, has no bearing on how you’re gonna restore the building in the sense of the steps you’re gonna take. So when we start to look at it from the perspective of doing this, it’s about legal liability. From a drying perspective, how are you gonna dry the building versus, what are we gonna do for the documentation for the claim? And so we look at the insurance policy slightly different. An adjuster is looking at the policy to see is the loss covered by the by the insurance. And effectively, what we’re saying is does that contract that the homeowner paid money to the insurance company and the insurance company then promised the the homeowner they would be there for certain losses, is it covered? And if it is covered, how much is the insurance company responsible to pay? One of the one of the easiest ways to look at this is when you look at, a roof or a roof that has actual cash value. So if we take a roof that has twenty years life, at ten years it has a loss, the insurance company says it’s at fifty percent of its life expectancy. We provide coverage for fifty percent of the roof, and the other fifty, you’re on the hook for. If we were to look at water damage the same way, it’d be a lot easier. But in water damage, most of it is on replacement cost, so you get into this battle with the insurance company wants to reduce invoicing. It’s it also comes down to is the is it covered? It has to be sudden and accidental, generally. Generally, maintenance or poor maintenance isn’t covered because you can control that. The insurance company can’t. So they put exclusions in saying if it’s a drip, a leak over time, those are typically not covered and as a water damage restorer, you would need to kind of have an idea of there gonna be who’s gonna be responsible for paying if you see a long term problem. Chances are it’s the building, owner who’s gonna pay for that, not the insurance company. But there are some policies where that rule doesn’t apply for certain situations. When we start to look at claims documentation, though, we’re looking at the other side. I got a re extra animations here that I didn’t want. They normally influence how your work. So when you look at the, customer, can they afford your services? Are you having that discussion? Are you talking to them about whether the, insurance company will only pay after certain things happen? What’s the responsibility of the customer, and do they have to take action in a hurricane or something along those lines? That becomes an issue, and that becomes a little bit of a challenge to deal with here. But we look at it from how are we serving the customer. So we look at it as two different industries with two different terminologies where we, where we serve them. Can what what’s it called? Is it called the, is it the restoration triangle? You know what I’m talking about? The the carrier, the restorer, and the homeowner? Sure. So would you like me to speak to that quickly? You may. Yeah. Absolutely. Quickly. So there are three an insurance claim is an unusual business model because there are three entities involved in the transaction, of which there are two contracts in play. One is the policy between the insurer and the policyholder, and the other contract is in play between the policyholder and the contractor. But there is rarely a written agreement between the insurer and the contractor. With the exception of Australia. They do have the insurance company will engage a contractor directly. So, in America, at least, it is a different, experience in how to settle the claim. So your previous slide, Chris, was how much is does the, insurance company owe? How much should they pay, you know, for the claim? And my, thought on that is it’s unusual it’s it’s disappointing that when a contractor completes their contractual agreement with the policyholder and they submit the invoice, not an estimate, The it it’s no longer an estimate when the the scope of work reported in your file describes the services performed, not what you speculate will be performed, but were actually done. And so you submit the invoice, and you say, here’s the the the amount that is owed, and then some third party, like the insurer, with which there is no contractual agreement with the contractor, steps up and says, I wanna negotiate that final invoice, and we agree to it. And this is where it gets really complicated is because there was a commitment to the policyholder. There’s an agreement between the policyholder and the insurer to indemnify. But the practice, as I’m seeing it, is that the insurer will negotiate with the contractor for a settlement amount as if it is an a suggestion that the invoice and the scope was a suggestion. When it’s not a suggestion, it’s a report of the services performed and the cost associated as it as stipulated in the contract between the contractor and the policyholder. And so to have it renegotiated after the work is done, I find to be difficult to accept. I’m trying to control my emotional language here. But I get really upset when I see that because that is not the model promised in the policy nor is it a an an element of discussion in the contract between policyholder and contractor, and yet we do it. And so I wonder what it’s gonna take to stop this poor practice because I don’t know of any other industry on the planet where that is usual and customary. It is a really weird practice, a nuance of this industry. So when I see new people excited to get into our industry, there’s a part of me that really relates to that. I love drying out buildings. It is the funnest challenge ever. It is truly enjoyable, but it’s that business side. Holy smokes. Is it ever messed up? And we really need our industry deserves to have that resolved in some fashion so that it’s less adversarial, and we can do our job wake up in the morning and do our job with the smile that we all deserve to have? So so part of it, Ken, is is the terminology. And and this is where over the years, you see that the two industries have blended together. Right? It’s originally started in from the cleaning industry. Carpet cleaners moved in and started doing restoration. Construction companies would do the rebuilds on fires. And then you see this blending. Well, so a carrier terminology is used a lot by contractors. We call them the insured while they’re customer. And so when we look at the two different terminologies, you kind of get understanding when you start blending. Oh, who’s the insured? Everyone knows who we’re talking about. Who’s the customer? Sometimes we know we’re talking about the insured. Sometimes it’s the insurance company. Sometimes it’s the adjuster. They have a policy. We have a contract. They have a reserve. We have a rough order of magnitude. And then they have policy limits. You have an estimate or an invoice. And this is what Ken’s talking about where that’s the business side of dealing with the insurance company. When you start to look at the restore your functionality, we’re basically working with two major organizations. You’re you’re working with the IICRC, our standards of how do we do the work, and then OSHA or OHNS and other countries where, how are we performing the work safely? And those are your two primary, functions that are on there. Now that you also have the laws and jurisdictions that go with it. But when we start to look at drying documentation, are we doing the things that we need to do to protect our workers, and are we doing the things that we need to do to dry out the buildings? And are we documenting that properly? Are we documenting in such a way that we don’t have biased documentation? And this is something that Ken and I were discussing. We’ve actually had this for probably now three years. We’ve had these talks about biased documentation versus unbiased documentation. So when you start to review contractors’ reports or we review other consultant reports, is it written in a way that is factual and unbiased or does it have a bias slant to it where they’re selling a a position? And all of a sudden you look at your paperwork and that response is, are you selling position or are you just reporting data back saying based on this data, we made this decision, or did you have a bias coming in that this is how we’re gonna draw? And what’s interesting is in a lot of the disputes we end up in, there’s a lot of bias in how a job is documented both from the contractor side and the reviewer side. That leads to conflict because it’s almost opinion based. And opinion based gets you into fights a lot more than facts. Facts, the lawyers don’t wanna deal with, but the second you get into opinions, they can tear it apart. And so most of the disputes I see are biased documentation that have a lot of opinion without a lot of substance. Ken, you’re seeing that same thing, in in the field work you’re doing. Right? Is it like, is that not true? Yes. Absolutely. Yeah. So and then what comes down to is ethics and integrity. Is is it helping you do your job if you’re following it? The biased decision making, allow you to make money in the wrong way. And and one of the things that I’ve sort of been discussed or sort of been thinking about for the last few years is that bias position that the carriers have taken from a vendor process and the bias position from a restorer trying to just keep the numbers in in check so your business makes money. Those two, interests sometimes are conflicted. And what we look at is, can you drop claim severity and increase profitability? And it’s something that you have to have intimate knowledge of the industry to be able to do. And right now, I don’t think the players that are making the big decisions have that in-depth knowledge to be able to make a system that works. And so we see the broken system needs more review, more, accountability after the fact, less discussion before it happens. It’s just a it’s an interesting trend that we’re in right now where a lot of you said it’s harder to make money today than it was before or it’s hit and miss. I think that has to do with the system. It doesn’t have to do with the people. We have more education now than we’ve ever had. We have more opportunities to get training than we’ve ever had. There’s more online training, so so it’s it’s more accessible. Yet the industry seems to be harder to work in today than it did ten years ago, and that’s that’s perplexing when you should be more knowledgeable, should have more information. So if I could speak to that, Chris. Yeah. One of the ways historically and here I am being the historian after being in the industry for forty seven years now. But going back to about the year two thousand when the applied structural drying course, ASD, was evolving and being introduced to the market, that was one of the ways that our industry tried to provide greater value, lower loss severity, and more profit was through the creation of the ASD course and doing in place drying or top down drying, whichever expression you wish to use. This practice for those that, of you in the this call that may not be aware of what that means, it is when the contractor would leave the original installation of the building materials in place. You leave them unaltered. So baseboards remain on. The pad remains in place. The carpet remains in place. You put the equipment on top of the carpet. You do not remove any of these materials, and then you will dry everything in place from the top side. Now the the beauty behind that in the year two thousand was, look. We can dry everything, and there’s no rebuild. Alright? Because everything is still in place, and we get to use more equipment. And we all know that equipment is highly profitable. So this was the unique product offering of the in place or top down drying process is that you could leave all the building materials in place, thus negate the rebuild costs, and you make more money with the drying equipment. So why didn’t that survive? Why is that becoming less common than it was in the year two thousand? And the reason why is because we have since learned that there are risks associated with leaving all the building components in place. That in fact, leaving wet carpet and pad on a plywood subfloor, there will be several days of that plywood continuing to absorb the moisture that’s still present in the pad that is in contact with that plywood. And so it gets wet for the next three day wetter for the next three days. Now here’s what’s interesting. When I’m looking at these files that contractors are submitting and I’m watching you know, looking at the drying records, I’m seeing drying records that do not reflect that truth, that the plywood is gonna get wetter while the wet pad remains in contact with the wood. There’s no way it’s gonna be saturated on day one when you got there, the plywood, and that it’s gonna start drying within twelve or twenty four hours. No. There’s still wet pad in contact with it. It’s gonna get wetter before it gets better, especially in an in place drying strategy. So what I’m finding when I read those records, I look at it, I just shake my head and go, these numbers are made up because that’s not the way these buildings dry with an in place drying strategy. And for those of you on the call who might be surprised by that message, I invite you to get your meter out and check it for yourself Because after teaching the ASD class for many, many years, never once have I seen the plywood get drier when there is an in place drying strategy with wet carpet and wet pad that you’ve extracted in contact with that plywood. The plywood gets wetter, not drier, after twenty four hours. So this is one of the truths of this, and it’s difficult to justify that to a reviewer who’s looking at this and going, why didn’t the material get drier? I don’t wanna pay you for that first twenty four hours. Well, that’s the physics of moisture movement. It’s not that it immediately starts drying the minute you plug in a piece of machinery. So these the other risk that happens is people started noticing that there are fancy colors appearing behind the baseboard after an in place drying strategy because it it dries so slowly, it’s not uncommon. You’re gonna have a microbial condition that amplifies in an in place drying strategy. So many contractors started to pull back from that attempt to dry everything in place without touching it because there are risks involved, and it’s difficult to explain why things got wetter for the next couple of days and then started to progress. And I will also say this. If there’s anybody in the call that thinks an in place or top down ASD drying strategy dries buildings in three or four days, they need to go back to the same school that you learned your ASD and check to see if the house dries in three days. The course is four days. Tell me that building is dry after three days. It’s not. And in fact, the flood houses that are out there, they did a survey, and I’m not gonna say who did it. But the average ASD floodhouse takes between eight and eleven days to actually meet dry standard. So if you’re doing top down drying and think that’s a three or four day drying strategy, that is just false because the average drying time approaches two weeks for a top down in place drying strategy if you’re checking the building competently and being intellectually honest with the process because it doesn’t dry in three or four days. It just doesn’t happen. And and this comes into where we we started talking about documentation that can be defended. So if you’re documenting to make better drying decisions, you’re actually recording the real data that’s on-site. And when you do that, you’re effectively increasing your profits and reducing your liability. And to Ken’s point, if the reading show that you’re getting wetter and you have an explanation of why that’s happening, a decision could be made. We don’t want it to get wetter. Okay. Well, then let’s take out the pad. But you’re you’re actually using real data to have real conversations to then be able to support what you’re doing. When you do that, you get some some really interesting things that come out. You have a legitimate conversation with the insurance carrier saying, this is what’s happening. Here’s what’s going on on the job site, and here’s the result. And the customer, you’re validating that the work you did on the job site is the right work. It’s when you get into the into this type of model of collecting real data that you’re getting data driven decisions and you’re an honest broker. Because like Ken said, we both have just recently have caught people submitting readings that don’t make any sense. It’s not physically possible to do what they said they did, and you have to have the questions. Like, if you wanna have that discussion, we can have that discussion, but what you said physically can’t happen on a job. Then all of sudden you get into the conflicted data, documentation that has a conflict, And it’s usually documentation to get you paid. So I’m gonna document and show that we did this great job. To Ken’s point, I’m not gonna show that things got wetter. I’m gonna say that they got drier. Well, okay. What happens there? Well, you’re following someone else’s rules even though it defies what’s what’s happening on the job site. And this is where you get some conflicts when you’re a contractor on a preferred program and you you go against the review of a a second contractor or a homeowner and your data doesn’t support it. If if Ken reviews it and it doesn’t add up, he can’t tell you that you’re in the good. So all of a sudden your data puts you as a bad actor. And when that happens, drawing problems don’t get caught and the customer gets a substandard job. And to what Ken just said, you get those fancy colors underneath, a homeowner sees that and goes, I didn’t have that before or we’ve never had water damage so why do I have those those molds, those visible molds or visible microbial growth? Why do I have that after you’re done? And it’s because you’re running with biased data. You’re just trying to get paid, and you’re not an honest broker. And that’s right now, where most of the conflicts we’re seeing are coming from is you’ve got contractors that are putting in really bad data and then selling it as if at the end of the job, it went the way that you said it was, and and you just can’t substantiate it. So that biased documentation versus unbiased documentation is massive. And if you you’re gonna see the trend. Right now, I’ve got well, we’ve got the Retramex remote monitoring system. So we you’ve got Phoenix with remote monitoring. You got all this independent data that’s coming into the into the marketplace. That is gonna change the way we do we do business because all of those readings can’t be manipulated. Well, now you’re gonna start to see the trends where things get wetter and then they dry or you remove the materials in there, but now you’re gonna have that unbiased data to start and enter the marketplace. And so we’re entering a new era. And for those of you that said, hey. Things are getting harder. The rules got harder. The the the systems are changing. The game is changing, but a lot of those the way that we played the game ten years ago doesn’t necessarily work as good today. And I can tell you this is a trend that’s happened. Ken’s been in the industry forty seven years. In forty seven years, if he stayed still, he forty seven years ago, he said this industry is easy to make money. If he stood still, ten years later it’d be harder to make money. Ten years later it’s harder to make money. If you enter the business at any one of those ten year segments that Ken’s been in the industry, you’ll always say that the the previous ten years were harder to make money because you learned the rules then and the rules change over time. And so you get stuck in those ways, and that’s why the new people entering now, they’ll say that it’s easier to make money today and it’ll be harder in ten years. It’s just how we all we all react. We get into a rut and we don’t change. We don’t notice the industry changing around us, but when you enter it new, you figure out how to play with the environment that you’re given. So we run into this source of loss versus cause of loss. Again, restore terminology versus carrier terminology. The source of loss is what we’re gonna run into, and I think it’s important we talk about this because you’ll hear a lot of contractors talk about cause of loss when really they should be talking about the source of loss. And when we look at source, source is a thing. It’s a person, place, or thing by the definition. But when we look at it from a restoration perspective, we’re looking at it’s a ruptured waterline. Okay. Is it a supply line or a waste line? Because that’s that source is gonna determine how we we we handle the loss. Is it wind driven rain, aquarium, a sump pump? What are we dealing with as our source which results in our actions to to deal with it? When we look at cause of loss, it’s an action that caused the loss. So it’s a person or a thing that gives rise to an action, a phenomenon or a condition. In the insurance world, it’s a cut water line. It’s a sump pump failure. It’s a ruptured, pipe. Frozen pipe, that’s the cause. Whether it’s a frozen sewer line or water line, it’s a frozen pipe that is defined in the policy. A leaking pipe is also defined in a policy typically as an exclusion. For us, we would look at a leaking supply line and say, well, we’re dealing with a a source that’s category one or it’s a clean it’s a sanitary supply line, and then now we’re dealing with the resulting damage, which could be a long term water issue, and that’s changed it. These terminologies we use interchangeably, but they’re not. So cause of loss, you’re talking an insurance policy term inside an insurance policy contract. Source of loss, we’re talking about restoration. If you were to look at this picture, what possible sources of the loss could you have? You could have a potential tank. You could have the water from the bowl. You could have the water from the bowl with matter, with urine. It’s gonna change how you handle it. You have a a leak from around the wax seal. You could have a supply line leak. There’s all these different reasons you could have it, but your your cause of loss could be a hammer fell into the toilet or your cause of loss could be the dog chewed a water line. Your source of the loss is the type of water we’re dealing with. You have the same thing that happens here in the sink. And so what we start to look at is how is that restoration versus insurance come together? And, Ken, probably an important point is is a perspective when you look at disputes is that terminology can get you into trouble. We’ve spoken about restorers grabbing the wrong protocols. When they go to job sites, they’re treating a category two as a category one. We’re gonna get into that, where they start to get in there or the or the insurer takes control of the site and says, ah, the cause of loss is this. Therefore, you need to treat it like this. And I think that’s probably one of the trends that we started to see in the industry is the insurance company is now getting into the discussion around categorization or determining which side of the coin that this falls in. Are are you seeing much of that now? Yes. I am. You know, this whole subject of cause of loss, as I understand first of all, I’m not an insurance adjuster nor am I an attorney, so I want everybody to know that. But the expression that I am familiar with from the insurance policy is called proximate causation. Proximate causation. Now what that means, that’s the the event that made it sudden and accidental and became a covered out an element of a covered peril. And so this whole subject of causation, I have found to be a valuable understanding so that when there are disputes on a claim related to the causation of this damage, then this is a a part of the discussion that would be relevant to an adjuster who is determining coverage decisions on an insurance claim. So while we are we we in this conversation, we’re talking about the source of loss being the pipe. The causation is the fact that it froze and caused a rupture. This same line of reasoning can be taken to areas that end up going microbially amplified amplified due to a delay that can be identified. Namely, in this discussion, a delay from an insurance carrier was so long that the building went moldy, you document on day one that the job was not moldy. And then after the the job progresses and there’s delays that you’ve documented and it took an extra week, an extra two weeks, and now the job is all nasty, it’s not uncommon that the insurance the insurer or the representative will say, ah, there’s an exclusion for that microbial amplification. Here’s the limit on the policy. If you can prove the causation is not from the original event, but rather the causation is the result of the delays of the insurer, the conversation changes. Because now it’s no longer subject to the I gotta be careful. It might not be subject to the exclusion or limitation of the policy, but rather it’s an error on the part of one party involved in that claim. And if you can trace that back to a certain entity, maybe they are responsible for the condition that the contractor must now deal with. So causation is an important bit of information in the file, especially if the if the new damage is the result of delays. The causation is the delay, not the peril. And that distinction might be valuable in discussions. The challenge for us is to document these conditions so that the discussion, if it should come up, is compellingly evident. What caused it? Yep. Absolutely. And and you guys and you don’t have to take that even if you come into a job and you’re working with a with a carrier, you have a preferred contract, and I did a lot of our work in Canada with with preferred programs, you’re still documenting the job. It’s just it’s just it’s not biased. It’s we got to the job. There was no visible mold. Here’s my photos. There was no visible growth. If you do any type of sampling, here’s the sample results. It’s just collecting data, and it’s not that you’re doing it, know that things can go sideways, but you’re doing the data collection. And then later on, if someone needs the data, you have it. And you take the bias out of it and all of a sudden your data is you have a history of a process of collecting good unbiased data. You’re easy to deal with. And you’re easy to deal within a dispute. You’re you you could be a witness for the carrier, you could be a witness for the homeowner, or you’re there to defend yourself. It doesn’t really matter. Your data is impartial. And that’s the biggest thing that I think we’re getting here. We’re at questions. Kristen, I’ll let you, take over. Perfect. Yeah. We’ve got a few, great questions coming in. So the first one is, if the loss occurred on September first with CAT one, does this deteriorate into CAT three by day three on September fourth? It depends, but all I can answer it. Oh, really? Okay. Alright. So first of all, let’s acknowledge where the question comes from because there was a period of time, when the IICRC s five hundred water damage standard, on page eighty eight in the two thousand six version of the standard, there was a graphic that had three little images that showed the influence of time on category of water. And if you read the small language at the bottom of it, it said, yes. There it is. Thank you, Chris. You might remember those, that image. If you read the small print, it talks about the influence of time in changing category. And if you read that sentence carefully, it does say seventy two hours that that the category of water can change in as quickly as seventy two hours, although it is not this is being mentioned in the standard, and it’s not to be used as a threshold that defines the moment in which, you know, the water can change category. It’s a laboratory test condition, and that’s what they you know, that’s what was published in two thousand six. We’ve since had a two thousand fifteen version of the standard and now the twenty twenty one, and you will notice that that graphic is absent. They took it out. The person that made that realized it was flawed. It was flawed, and he didn’t like the way the industry was using it, saying that after three days, the category of water changes, you know, as if on the seventy first hour, it’s still category one or two. And then on the seventy second hour, it changes to a three. That is ridiculous. And the laws of, you know, life and biology just don’t work in such, you know, ways. And the the main thing that they really noticed that they were wrong on is it’s not about time, everyone. Time is not the big dis the, influence, not the greatest influence on water changing category. The biggest thing is temperature. The warmer it is, the more it it behaves like an incubator, and that’s what dictates the rate at which it changes category far more than the the time that has gone by. It’s not about time. It’s about temperature. So if you’re in Florida, I noticed in the comments that there’s a lot of people from Sarasota. I live in Largo, Clearwater area, so I’m just right north of you. And I’m telling you, it stays warm here for a dominant period of time throughout our our year. That is usually quite warm. And these jobs can change category not in days, but in hours, and in some case, minutes. That’s how quickly bacteria can germinate and multiply. And I think we’re gonna talk a little bit more about that when we get to the categories. But this point is this three day threshold. Please throw it put it in your back pocket and just leave it as a historical reference because it’s not accurate, and we don’t have those thresholds published anywhere in our current standards. It was an idea that was published, what, ten ten years ago, twenty years ago, and it’s now abandoned. So leave it in the past. It doesn’t apply to our industry in today’s market, not among competent restorers. We don’t use that threshold. Seventy two hours. We don’t use that. Chris? No. I’ll just I’ll let that that’s good enough. I’ll I’ll let Kristen go to the next one. Okay. Okay. So the next question is when you have multiple drying chambers and you have a chamber dry before the others, how do you eliminate those tasks show up on the next day visit since the chamber material is dry and the equipment has been removed? Yeah. We’ll we’ll we’ll we’ll pull that one when we get up to drying chambers. Right. So, going back to, insurance. So the insurance tells us it it is the policyholder’s responsibility to mitigate regardless of coverage. How do you get around that? For both of us or Chris, go ahead. No. So so it is in in most policies, and I’m I say most because I haven’t seen one that doesn’t have this, is that as the property owner, you have to mitigate against the damage. So that’s take care of maintenance, and that’s when a loss happens, not to just stand there and watch is to take action. That’s the expectation of the insurance carrier. It it’s it comes in this responsibility. You couldn’t ask somebody in New York of how they would deal with your water damage in Texas. If you’re the one that’s in the house and you know there’s water, there’s there’s an onus on you to to to reduce the severity and not turn another tap on if there’s a loss happening. So when they started saying that you it’s on you to mitigate, it’s effectively coming in and and and saying that you have to take steps to reasonably reduce the severity and don’t delay in reporting or if there’s a contractor that you’re working with is to allow it to take place. But there’s a financial cost that if you didn’t have insurance, how would you prevent that microbial growth? Or how would you prevent or repair that water damage? You’re gonna take action and communicate with the carrier. And there’s a whole bunch of it’s not just that one clause. There’s usually, like, three or four clauses in there, that you’ll communicate with the carrier immediately. You’ll you’ll, take steps to to mitigate the damage. So it’s it’s a matter of of what the contractual agreement is and then how that relates to the action of the homeowner. The owner homeowner has to take action. That’s that’s what it comes down to. There’s some weird things in there. Like, the insurance company has the right to investigate. So do they have the right to investigate before you take action? And some of that kinda gets convoluted and can get disputed at times because it’s based on the interpretation of contract language. I don’t know if that answers that question exactly on point, but it it is the customer’s responsibility. So, Chris, everything you said was pretty much what I was gonna say, but I was gonna frame it differently. So the question was the the policy says that the homeowner must take action to keep the damages to a minimum. That’s fine. The policy also says that the insurer must be given the right to inspect. Now if you go in there and start changing the building up and you start cutting things out and saying, I have to do it, and then we’re gonna worry about, the claim later, I have seen the claims where the insurer shows up and says, you cut out all the sheetrock. You took all the carpet out. You did everything. We must have been given the right to inspect. So since you already did the work, we deny the claim. I have seen more than one claim denied because the contractor went in there and did the job before the insurer had the right to inspect. And now granted, I’m in Florida. This is the worst market on the planet. I I’m just saying if it happens here, maybe this trend is coming to your state or country soon. I’m just saying this happens here. Claims are denied if you do the work before the insurance company has been given the right to inspect. So the contractor responds with this. They they they had the claim denied. They paid dearly for that experience. So now what they do is they notify the insurance company with the policyholder. They notify the the insurance company. We have a a covered peril. You’ve already said that this is a covered loss. We are now waiting for approval for the these steps that as a contractor, we recommend, need to be done in order to have a, a satisfactory, usual, customary, necessary, standard restoration practice. And you use those terms in your communication. And you say that we are standing by waiting for you to to communicate back to us when the the the appointment’s gonna be that you’re gonna come to the job site, and you’re going to, you know, investigate this loss. Like, you’d stipulate is required in order for this to be a covered loss. We’re asking you to tell us when you’re coming. Or that you will respond to this email and waive your right to inspect so that we can proceed. Please let us know the answer to either question. Please note that we are stabilizing the property. Our burn rate is three hundred and fifty dollars a day, and our current balance is six thousand five hundred and thirty dollars because we’re waiting for you to respond, and you send that email every darn day with a read receipt or some kind of a tracking receipt so you can tell what they did with that email. Because I promise you, at least here in Florida, what they’re gonna do is when you say, hey. We sent you an email every day for three weeks and you didn’t respond, they’re gonna say, we never got those emails. By golly, you gotta prove they received those emails. And then with that, then they sit back in their chair and they go, well, crap. Now we gotta do something. So, it it’s it’s become like I said, you’ve really gotta think ahead on what you anticipate the insurer might do because a failure to respond to these types of communications is really not uncommon. They will drag it out for many days, even weeks, even months with no response, And then they blame everybody else for the fact that the job went, you know, sour, that it became a hundred thousand dollars or whatever. But because they didn’t communicate, and you’re waiting for some communication on them. I know this sounds very negative, but I it’s a reality here in Florida. And so the only way to use to respond to them when they say you had to do something, well, we did. We followed the language in your policy that said you had to be given the right to inspect. And when we invited you and you didn’t show up or respond, that’s not on us. That’s what’s required in your own policy. And so that’s the lang that’s the the the angle that I would recommend the contractor take. Ken Ken doesn’t get involved in many jobs that go straightforward. He’s usually involved in the conflicted ones. That’s true. That no. It’s true. And so if my message comes across as negative, please understand that this is my world. This is what I’m exposed to daily from contractors, and these are the types of experiences, and they’re all very similar. These are the issues that contractors face commonly in the state of Florida. Well and and and and part of it is is you may in different areas, we see this as well. So you you might have one adjuster who takes that position, and so you’re you’re running up against, you know, someone who’s misinterpreting the policy. Typically, it’s the if you communicate well, but to Ken’s point, maybe his region, normally, if you communicate with the adjuster and come up with a plan and document it, you go forward with it, and it’s usually relatively quick. In certain regions, it’s it’s not. So, but, yeah, I like the passion of Ken. So go Kristen, we’ll do one more, and then we’ll we’ll get moving. Sounds good. So last one for this section. We’ve been seeing more and more adjusters not paying the emergency service call as it’s part of doing business. How do we how should we respond in order to get paid? So this is it depends. If you’re in a program, then you probably have signed or your organization assigned program rules where they’re not, they’re not accepting that. If you’re not in a program, it’s it’s not for them to exclude that if that’s part of your normal business operation. Service minimum service charges or service callouts is about diverting resources. It’s not about taking the call that you got the job. It’s about diverting resources from other jobs. So there’s a there’s a cost component to that. But it is it’s it’s part of your contract. If they don’t pay, it’s kinda like if you went to the dentist and the dentist said, hey. Your insurance company doesn’t cover this procedure. You’re on the hook for it. Okay. Well, that’s the same thing that goes to the homeowner is your insurance company is not covering the emergency service call out even though there’s no exclusion in the policy for it. They’ve decided they’re not covering it. You’re gonna have to pay that fee, out of pocket. That’s you know? And and that may or may not go to cover their deductible. So it could get chewed up as part of the deductible is that that service callout fee is included as the thousand dollars that they’re giving you. They paid for this service callout. There there there’s a oh, I’m not gonna get into it, but there’s some nuances around it. But this isn’t the right environment to to get in that discussion. But there’s there’s certain ways that a policy acts that your emergency service call out could get dropped into the deductible amount. It’s the out of pocket expense that the homeowner faces. Alright. We’re good. Let’s get in. This is we’re gonna enter Ken’s specialty. You wanna hear some passion, you’re gonna hear it. We’re gonna jump into the categorization of water. And and in here, I’ll tell you this is probably one of the best discussions I’ve had with Ken over the last three years is actually, it’s been longer than that. It’s been about eight years now that we’ve we’ve I’ve got behind Ken on this one. I I I battled him for a while. Maybe it’s his seniority that that allowed him to win, but it’s it’s his approach on looking at this. And so I’m gonna I’m gonna go through this and and then get Ken’s opinions on it because there’s a lot of times when we have a lot of opinion being put forward into this. And Ken’s got this quote that he uses, opinions are the lowest form of human knowledge for it requires no accountability, no understanding, but the highest form of of knowledge is empathy. It for it requires us to suspend our ego and live in another’s world. It requires profound purpose larger than than the self kind of understanding from Bill Bull Bullard. And here’s what’s interesting. Ken, put a little bit to that quote because categorization is probably one of more contentious things that we deal with that directly impacts severity. Yeah. So I’m disappointed by the entire subject of water category. So really quickly, category of water is an IICRC ism. They’re the ones that came up with the expression of category of water. So it’s not something that’s found anywhere else in any other industry that I’m aware of. So the question is now if the IICRC came up with the three categories of water, which we should all know what they are, one, two, and three, and and what each one is. What are the thresholds by which each one is measured? And there is nothing published on such a subject. Now the IICRC has given us clues that we can use in our determination of the degree of contamination of the water, but this is not being read carefully enough from the standard. And I know you’re gonna be getting into that in this section, which is good, Chris. We’ll talk about some of the elements that the standard speaks of that we should be looking at when we’re categorizing water. What I find the most disappointing is that at the end of the day, it boils down to the cut. Generally speaking, the general practice, the common practice that we see among restorers is everybody takes a wild guess that we will, you know, say, oh, the water came from this source. It’s been here for this long. I think it’s a two. I think it’s a three. I think it’s a one. Whatever. Everybody just comes up, and maybe they’ll have a little discussion between, what do you think we should make this? A two or a three or a one? What do you think? And there’s a little bit of a consensus among the the the twenty year old technicians that are on the job site with no scientific background, no understanding of biology, no understanding of the risks that we are actually facing, no real consideration of the occupants of the building and what their, needs are, No real consideration of how the microorganism, behaves in different environments and what microorganisms might be present that we should be aware of. These types of understandings are largely just, it’s let let’s just take a swing at this, and we’ll call it whatever. Well, I’m gonna say right here and now, if you were a claims adjuster, wouldn’t you take that subject and go, everybody’s guessing, and there is nothing that that they’ve got that says it is compellingly this conclusion. And frankly, nothing in the standard of care has a greater influence on the actual scope of work that would be, performed on the job. Nothing is will have a greater influence on the scope of work than the determination of water category. Because if it’s a one, hey. Dry everything. If it’s a three, cut everything out. So this is a really, really big money decision, and we just casually call it whatever and think, you know, it’ll be accepted. No. It’s not. If you’re an adjuster, you’re gonna argue that one because no matter what angle you chose, whether it be a one or a three, if it can be proven wrong, the entire scope of work that you did can be challenged that you did it wrong because there’s no evidence one way or the other. And so this is a really discouraging position that we find ourselves in because we have a lack of data and a lack of thresholds on what makes it a one versus two versus three. So the standard breaks it down into a a category one protocol and a category two three protocol. A two and a three is handled the same way, everyone. Same thing. So we only have two protocols to choose from. Don’t you think we should be able to distinguish between a category one and a noncategory one loss? And that’s where we’re gonna go with our discussion this morning after this. So we we’ve got we’ve got the poll question coming up. What percentage of your files being reviewed are subject to a category change in exchange for price concessions? Now the price concessions could be there, but it’s it’s what percentage of your files are being subject to a category change. And so if we’re getting into this, then this or maybe maybe let me better define it. It’s that after the fact, we’re saying, hey. This is a category one. You that shouldn’t have been a category three. This should have been a category one. Look. It came from a supply line. And therefore, because it came from a supply line, your determination on category three is wrong. And that’s that’s I think that’s probably the most common battle line that I see is that they use the source of the loss as the determining factor that we get into. And so, actually, the numbers are interesting. I don’t change my rates. I don’t change my the opposite, Chris. I’ve seen somebody call it a category one, and the insurer said, that’s clearly a category three. I don’t wanna pay you for your category one approach. Well, that’s interesting. Yeah. I haven’t come across those ones yet. You should have been cutting it out. What do you pay making me pay to dry this material out for if it’s, you know, not category one? And they argue. They have a difference of opinion. And why is their opinion any more or less relevant than my technicians? Everybody’s guessing. It’s a guessing game. Yeah. No. I I here’s the results. I don’t change my rates, twenty one percent. We’ve got zero to twenty five percent. Fifty nine percent of you say very rarely is that the discussion, twenty five to fifty percent. So it’s not as prevalent, Ken. It or it doesn’t look as prevalent. Fifty to seventy five percent of the time, two percent, and seventy five to a hundred percent of the time is three percent. So most people are not getting into a categorization battle very often. I guess, is the best way to to put that one, which is interesting. And and and here’s the thing. When and this is probably the world Ken lives in or the world I see where a lot of these battles that start is based on these conversations. So when they do get escalated up, a lot of the the miscommunication happens in these these files, which would make sense that a lot of you go about your business and go about your day with little or less friction, and you don’t end up in those disputes. When when you look at it from a a perspective of of communication, communication fixes the problems, and and it and it there’s this opportunity to create this bait and switch opportunity where it happens on both sides. If you ordered a burger and fries and you thought you were getting this, but in reality, you got that, you wouldn’t be too impressed paying fifteen dollars for a very plain burger and very little amount of fries. And I use this analogy because it’s a lot of what what we do. We expect that the insurance adjuster understands what your level of service is and that you’re giving them the the deluxe burger with all the fries, and they’re used to buying this other cheap burger with little fries. You you just make the assumption that all contractors are doing what you’re doing. All contractors communicate like you’re communicating or they have the gear that you’re putting in or they have the training that you have. We’re all different. All of the restores like Ken restores a certain way, I restore a different way. We get to the same objective where we might have different skills that get us there. We might have different perspectives that gets there and we have a different way of approaching it. But when we deal with source or or sorry, categorization, we’re getting into the the communication at the beginning has to be very transparent and very unique, and it provides an opportunity for a discussion and an explanation because it is gonna change the way that the job goes if we determine it’s a category one or we determine it’s not a category one. And these are the ways that you can determine that. And these are Ken highlights this and and he highlights it in his book and he highlights it in any discussions that you’re with. These would be the six things that you could look at. Five of them, you can easily do on your own. What is the source of the loss? So if the source is immediately a contaminated source, you don’t have to go any further than that. You’re you’re now stuck at the source as a category three source. You’re at a category three. If you broke a sewage line, you are not going any further. Is there visual debris that would that the water has come into contact with that would allow you to make a determination that this no longer is a category one. Actually, I’ll turn it over. Ken, you’re the master of this. You you you you take take them through this this journey. I’m still stuck on the burgers on the previous slide. I’m all hungry now. We’re coming up to break soon. I know. Actually, what I really want everybody to know is that the burger on the left with all the big fries and the tomato and everything, that’s an American burger. The burger on the right is your Canadian burger, just so you know. Okay. So the source of water, yeah, that seems to be what everybody looks at, and that is what they call the the category of the water. If it came from a freshwater supply line, it’s a category one loss. I gotta tell you the minute it hits surfaces in the building, it comes into contact with substances that might not be, sanitary. This is we found to be especially true if there are pets in the home. We’ve all seen what our dog does when he drags its **** across the carpet in the living room. That’s spreading E. Coli and coliform bacteria in the structure. And whether you want to admit it or not, any testing results will reveal this what we we know to be true, that it will be there. So the source of the water is considered in the categorization of water, but it is not the determination of what the water is. And we have found this to be incredibly, meaningful, with with with our testing process because we have found that even from a freshwater source, the quantity of jobs that where the water remains freshwater after coming into contact with flooring or shelving under a kitchen sink or, behind the toilet or down into the basement or whatever it might be that you’ve got. Even though it’s a freshwater source, make no mistake. It comes into contact with other biological organisms. And in a liquid environment, those microorganisms have a party, and that party is really aggressive. They it doubles in in population at a surprising rate, and we’re gonna talk more about this later on today. And, the meaning behind that means it it it establishes that we have hours or even minutes before it changes category, not days. And that’s why I say, and I think you’re gonna hear this talked about later, is that the real unicorn in water damage restoration are category one losses. They are as rare as you could ever imagine. These are not category one losses because category one water can be measured. And so if it doesn’t meet the criteria for being category one anymore, then it must be something else. And if it’s something else, it’s a noncategory one loss, and we must treat it as such. Oh, I’m sorry. And visual debris. I’m sorry. I got stuck on that one. Let’s talk a little bit about the visual debris. If you’ve got junk in that water, take a picture of it. Show that there’s silt in the water or some kind of a a granular substance in that fluid. If there’s toilet paper in that water, get a close-up. Okay? Get it make that part of your documentation. It might be from a freshwater source, but it came into contact with other stuff. Document that. The temperature. I doc I go around with a laser thermometer, and I will take photo like, laser thermometer readings of the variety of different surfaces that have become wet in that building to demonstrate that these weren’t cold surfaces like you would find in your refrigerator of thirty five Fahrenheit or three degrees Celsius. That’s not what we’re dealing with. We’re dealing with, you know, temperatures that are more reflective of a living condition, like seventy Fahrenheit, twenty one Celsius, and warmer. Okay? These are great incubation temperatures. Microorganisms love to, multiply when it’s in root in temperatures that we find ourselves comfortable in. The odors, the presence of fragrances, things like the smell of a laundry basket or a wet dog or your son’s bedroom or a pair of nasty socks. Okay? These types of fragrances are indications that bacteria has, is present and viable and is digesting mic or organic material and producing those fragrances. That’s what we are smelling. So that’s a clue that there is a, bacterial amplification if it smells like a men’s locker room or whatever you want to try and correlate it with. I will say that if you encounter that on the job site, document what the fragrances reminded you of. You can’t there’s no meter out there that says we got this fragrance present. You it’s a very subjective measure. And so you would document what everybody is smelling. How would you describe the fragrance, missus Jones? How would you dry describe the fragrance, Bill? You know? And get those expressions written down, and it would be even best if you got them to just put their signature on whatever it is you wrote down. That becomes similar to an affidavit that these individuals documented what they smelled at that moment in time. That’s a strong indication that the, bacterial amplification has transpired. Time, yeah, I’ll document the time since the date of loss in passing, but I’m not really following the time. It’s kind of just like, oh, it’s been there for several days. I bet you the bacteria has really had a lot of time in order to germinate and amplify. And then finally, testing. For goodness sake, perform some kind of testing, some data. Take this this determination of category out of the realm of guessing and opinions, and for the love of God, get some data from some source. It’s not the sole determination. You can’t just require, or just depend only on testing. That’s not sufficient. And there’s, you there are meters available to us for adenosine triphosphate testing, ATP. There are people that’ll give pushback on the use of that technology. I say let them push back. It’s the best documentation we’ve got available to us now. It’s better and more conclusive than a laboratory test, that’s gonna get a whole bunch of comments in the chat. I’m telling you that, Will. The ATP instant hype, testing that you can get in the field is gonna be more conclusive than taking a sample, shipping it to a lab, having them do something in in the laboratory, pull some tests that are, in some cases, subjective tests. They’re looking for a color change on a on some testing process. That’s subjective. It’s not quantified. And it had to survive the transit process. So instant on the site is better and more sensitive than what you can get at a laboratory. And so I’m big on using ATP in conjunction with consideration of the other five elements included in this list. And I will I I maintain that that is a a far more compelling list of con data that will produce a conclusion that everybody can rely on if the subject of category should ever be debated in the future. Yeah. And and let let’s move forward, Ken. Let’s talk about category versus category two versus category three. We we got a lot of questions that I know last year we we went through, and we started to talk about when you also run into the hazardous regulated materials, mold is best as fireman’s water or fire suppression systems that aren’t necessarily really mentioned in the the s five hundred. And and we got to this point where it led it is funny because Ken and I got into this this discussion about, you know, what is the unicorn, and and mine’s based on on an opinion. Ken’s based on facts, so so I’m gonna eat a little crow here when I show this. But this is how we we looked at it. And over time, I’ve I’ve changed my perspective. I I thought there was a lot more category three than category two. Now I use the definition from the s five hundred from the IICRC. So is it grossly contaminated, and is there a health risk for severe illness? But when well, there’s there’s it can be. And Ken and I have argued this. He’s like, well, it’s subjective. How do you know? And I don’t know. I just have imperial or evidence from being in the field where where we don’t get sick, especially when you watch everyone’s not wearing their PPE. That level of sickness and and severe health doesn’t happen as often, so then I would move the three over here and say, but there’s a lot of probably mild sickness or mild contamination, pink eye, and other things that you get when you aren’t being careful on on the job site. But the category one versus category three, we both agree there’s a hard line on it. And I’m moving my my category ones have moved from, you know, maybe twenty five percent to ten percent. Ken’s down to, like, two percent. So he’s pulling me down. But I understand the philosophy. I understand the reasoning why, and and it makes more sense that we’re getting into how do I put this? After COVID, I started to look at things as if you apply, an antimicrobial to a COVID surface, so you clean and then apply antimicrobial. We handled that whether you you know, the sources of of information that came in are are diluted with facts and unfacts, however you wanna position them. But what we do know is that as you apply that to surfaces, what if we applied that to some category ones that Ken has determined as a category two and you’re like, well, we could we can do things to get them back to that sanitary condition, but they’re not there now. And that’s why I’ve shrunk my list down is that there’s still a two, but we can make them a category one. Okay. Do we have to do as much destructive stuff? Well, you get into a slippery slope because now you’re talking liability. And so I’ve had to move my line down because from a business perspective or protecting the business, that line has to be reduced. How you operate as a homeowner, you can do things that have more risk. You take on more risk, but there’s also no one holding you tethered for liability. And and the best analogy or the best example I can use is like asbestos. It’s a regulated substance that you as a contractor have to deal with in a certain way. You as a homeowner can deal in a completely different way than that of a contractor. So the same thing applies to water is you as a homeowner can deal with a water release in your home in a different way, but as a contractor, there’s a certain responsibility and liability you take on. And so I’ve moved my position much closer to Ken’s. Ken, I’ll I’ll let you take it from there, when we move to the the next slide here. Okay. Is what Oh, I didn’t know if you want me to speak at this point. Sorry. Sorry. I’m I’m gonna I’m gonna put this up. We had some discussion earlier this morning. We got up early to talk about this. The cause of loss versus the categorization of loss is one of those areas where you guys aren’t seeing it as much, which is good. It’s it’s it’s better that you’re able to make the call because that’s how the standard, has interpreted. And Ken pointed out why. That might be somewhat flawed if we have inexperienced people making that discussion. But if you have a causal loss that’s a a ruptured supply line and it contacts matter, it goes from a one to a three. We see a lot of adjusters or insurance companies taking that that position that it’s a category one, and that’s how you treat it regardless of what it contacts. And that’s not what the standard says. Right. If it sits unnoticed for a period of time and has the ability to amplify, it’s a two or three. Doesn’t matter, and we’ll get into why it doesn’t matter. If it sits, if the site has a high temperature and Ken mentioned Florida, it’s a two or three very quickly, at room temperature or higher. So if you have a few days of a delay, you could all be past the point of being, considered a category one. And then if you smell that odor when you arrive at the site, you’ve already missed the opportunity for it to be a category one. That odor is an indicator. It’s a two or a three or somewhere on that spectrum. If you’re using these rules, it doesn’t it doesn’t take a lot to then come back and determine is it a category one or is it not? And I love the fact that Ken puts it that way because that’s an easy way for all of us in the field to be able to identify what’s a category one. We look at our source, We look at all the factors, and we rule it out as a category one. And the second you rule it out as a category one, it doesn’t matter. It’s a two or a three, and you’re gonna treat it the same way. Now I know the estimating systems have lagged behind. Xactimate has category two cleaning versus category three. You know, it’s it’s it’s incorrect. So the part of it is is the information that the insurance companies receive through the estimating software, through their training, they may be getting the wrong message, and so that’s why we have some of this this incompatible communication that happens. But when we start to look at what is category one versus category three, the only difference between the two and the three is can the drywall potentially be left, and can the carpet potentially be thoroughly cleaned? Ken, I’m gonna let you talk to this. This was the discussion we had. I didn’t get a chance to put the the definition in from the book, but can you talk to the the s five hundred and how it reads, about the cleaning and about the water being splashed on the drywall? Can I get you to go through that? Yeah. I can. So let’s I I will get to that. Let’s just very quickly review my position on what category one water is. This is the only category that is defined anywhere, and it’s defined by every major city I would suggest on the planet that every major city has published thresholds on how much coliform bacteria can be found in, in the city supply lines. And the answer is generally zero. You’re not allowed to have any coliform bacteria in your city supply lines. How about E. Coli? Again, zero. So if those are the published thresholds and I find that the water that is in in the house, the puddle of water that’s in the house, I pull a sample, and it’s got viable coliform bacteria and E. Coli, then it is no longer qualified to be considered category one. Now how does the city control the, you know, the proliferation of these microorganisms? They add chlorine to the water. Alright. So they do that, and we know that there’s a little bit of chlorine in there that keeps that, microorganism in check. Now here’s what when I bring that up to a debater, a person who wants to debate the, the what I’m saying, they say, yeah. But you’re not going to drink that water off the floor. So you can take that idea and throw it out the window because we’re not going to be drinking that water. You’re gonna **** it up, you’re gonna dry it. Well, then the next part of that question is, well, let’s talk about what that same city, what the thresholds are for E. Coli and coliform bacteria in public swimming pools. That’s physical contact, not drinking. And the answer is they have to add chlorine to the public swimming pools. If by a factor of ten x, there is ten times more chlorine in public swimming pools than there are in the typical city supply line. Why? Because when you drink water with bacteria in it, it goes into an acidic environment in your stomach, which is very inhospitable to bacteria. So if there was any in there, it and there’s only a few, your body’s immune system can handle that. But not when you’re swimming in it, not when you’re in physical contact with it because that liquid can get into your eyes, your ears, and all of your other orifices, and that is a direct into your metabolism, into your your body, and that’s why they add chlorine to swimming pools. And, I would suggest that if you are an occupant of a house and you had contaminated carpet and your restorer cleaned or steam cleaned the carpet and sprayed their favorite juice and dried that carpet out and there was still some viable organisms present on that carpet, and you had athlete’s foot, those are open sores on people’s feet. One in five people has athlete’s foot. If that happened, that is directly related to this loss or related to that peril. And I I think that we we deserve to possess that understanding so that we can make wise determinations of water category. All that being said, there’s a threshold for category one. It’s the city there you’re not supposed to have those microorganisms present. So if there’s microorganisms present like that, then it’s not category one water. It’s either a two or a three, and I don’t care which one it is. If somebody wants to argue, it’s not a three. It’s a two. I go, you win. It’s a two. It’s the same procedure. You have to have containment, PPE, take out all the materials that absorb that significant or gross contamination, and you’re gonna have to, isolate the area, contain turn up isolate the HVAC system, have a health and safety plan. Twos and threes require that. And if ones are so rare, man, we should be doing this all the time on these jobs and opening up the cavities to reveal the contaminated areas so you can decontaminate it and then begin the drying. We all know you’re not supposed to put air movers on twos and threes. Right? We all know that. No air movers on twos and threes, not until you verified it’s back to a category one. And I would suggest I saw one of the questions. Ken, how do we get how do we handle the pushback from those who say, we don’t wanna pay for five days of drawing, six days, seven days, eight days? What I’m gonna suggest is that several days of these category two and three losses, if that’s the dominant one that we’re really encountering, if we have categories twos and three losses, what we do on the mitigation process, eighty percent of the activities that we perform on twos and threes are just getting the job ready for the first day of drying. You’re isolating the area with containment. You’ve got negative air. You’ve got humidity control. You’ve got the furniture removed from the affected area. You’ve deconstructed the structure to remove the materials that absorbed that two or three water. Carpet, pad, sheetrock, insulation. You’re gonna be taking all that out. All your guys are wearing PPE. You’re doing all that work, then you have to wash. Wash that structure. Don’t just spray a juice. Read the label. It says it needs to be applied to a cleaned surface. You charge for that cleaning step because it’s federal law. You shall comply with that that that EPA registered disinfectants label. It’s a it it’s a it’s a first sentence on every one of those EPA registered disinfectants. It is a violation of federal law to use this product in a fashion that is inconsistent with the labeling. So if the label says it must be applied to a cleaned surface, then you must clean the surface. You include the label as part of your documentation, highlight that sentence, and say, this is why I had to clean it because I’m federally I’m told by federal law, I shall adhere to the rules of that label. And then you apply the disinfectant, and then you get it tested. Now all of that is not drying, but you had an air filter on that job. You had a dehumidifier. No air movers. You’re just controlling the humidity and the particulate due to the deconstruction. By the way, it’s not dust. There are exclusions in the policy for dust. So you call it particulate or debris. That’s what you are actually managing. And you will notice that eighty percent of the mitigation costs are just getting it ready for drying. Now when you’re ready for drying, you got open structure, and you have a few air movers and your dehumidifiers. The air scrubber is no longer required. Get that thing out of there. I and I apologize. I said air scrubber. It’s not an air scrubber. It’s a negative air machine. You put that in in a fashion that makes a negatively pressurized chamber. The standard has said that about four or five times. Don’t put air scrubbers in there. That’s a HEPA filter that’s just sitting in the middle of the room. You must configure it so that it produces a negatively pressurized chamber. And the standard says you might have to add some dehumidification because you’re pulling in the outdoor air when the room is under negative. And it says you’re supposed to add a dehumidifier, and you document that. And then, after all that’s done, then you can begin the drying process. What I suggest this group do is that you will create two scopes of work. One is mitigation phase one, getting the job ready for drying, and you make an invoice for that phase. K? You got a separate scope and a separate, invoice just for the decontamination and getting it ready for drying. And that’s not uncommon that it’s two, three, four, five, six days just to get it ready. And then a separate scope and equipment list for the drying effort. Separate the mitigation out into two phases. And that way you can have fourteen days of equipment use, but you’re not all for drying. Get change the discussion by by separating the two efforts, the two phases of mitigation. Combined, that’s all the activity for mitigation, but it all it wasn’t all for drying now, was it? So on category two sheetrock, if you have category two water that comes into contact with sheetrock, you’ll notice at the back of the s five hundred, it says that it’s generally restorable. If you read the legend on generally restorable materials, it says, if cleanable. If cleanable. Now if the water soaked into the sheetrock, is it cleanable? The answer is no way. Therefore, it’s not a candidate for restoration. On the other hand, if the category two water splashed on the surface but didn’t soak into the material, then go get a towel and wipe it off. That’s why category two sheetrock is generally restorable. It’s if it’s a splash. But if it’s soaked into the material, it is not a candidate for restoration. So when you’re using your moisture meters on sheetrock and you’ve called it category two, you should be recommending its physical removal, not an attempt to dry it. The standard is clear on this. And I am one one of those experts that will reveal it and say, that is not an element that is should have been attempted for restoration. It should have been recommended for its replacement. And then let the discussion ensue on what they’re going to do in order to find settlement because there is no way that absorbed category two sheetrock, a significant degree of contamination, not insignificant. It’s freaking significant. There I am. There’s my emotion getting into it. It’s significant. You’ve gotta get it out if it’s in the building. Otherwise, the structure the structure’s mitigation is incomplete, incomplete, and you deviated from the standard. You better have some good reason reason for documented in your file for why you left that significant contamination in the building. Because people like me are gonna ask you, why did you deviate from the standard? Why didn’t you recommend its replacement? When we start talking about drying chambers, there’s times when you’re looking at a structure and you’re trying to determine your drying strategy. And you can have different things that’ll happen inside that strategy. You might have a small chamber that you put into a large part of a room. You might use an entire room as a chamber or an entire floor. Whatever your your job site dictates to you is what you’re going to need to do, you’re going to have to modify your drying chamber and we get into these where you might have certain rooms that you have to build a drying chamber. But what you have to realize is those chambers when you put them in place, you’re effectively controlling the environment. And I have this photo where, I was airport and it oh, I got a bunch more from airports that I go to that you see the the drying in progress. We’re we’re looking at a small drying area. The the posts represent the actual drying area. That should be polyed in. Behind me is thirty or forty thousand square feet of terminal that we’re drying with that that dehumidifier. The dehumidifier is doing nothing in this situation. This happens a lot inside normal residential jobs where we’re processing all the air of the building. And when we’re building a drying chamber, the goal is for us to apply our control over that little wet and affected surfaces to create the environment for drying. We’re basically applying the pressure to it. That means you control how much air you wanna process. You’re controlling what rooms you’re impacting and what surfaces are getting your attention. You have to be building drying chambers, setting up your containment. And then to Ken’s point before, if you’re doing a category two, three, you need to then be controlling where the contaminated air is going. You can’t just let it go into the un uncontrolled part of the building. You’re blocking out HVACs. You’re blocking out passageways. You’re putting the environment under negative pressure. You’re dictating how the air is gonna move. You’re not allowing the building site to dictate. Alright. Let’s get in the partial drying chambers here. K. When we start to look at this becomes a documentation, issue, but partial drying chambers, there’s there was questions in there about how do you take readings or when one part of the chamber is dry. Now we have to distinguish. Are we talking multiple chambers or different rooms within the same chamber? And it becomes one of these things if you’ve used hydro or you do paper log, it doesn’t really matter. The more chambers you have, the more paperwork you’re gonna generate. And so the goal is, at least in my perspective of the goal is that you’re gonna reduce the number of chambers, and there’s certain things that are gonna help you impact your decision on reducing those chambers. So if we were to look at the office and laundry room, if we were running a job and there’s no natural, corridor between them because it opens up to the rec room, you would treat those as potentially two different chambers. And you would then have to look at, well, what does that mean if you were to make them two different chambers? It means you double your paperwork. So each chamber has to have an affected area reading. You’re gonna be doing calculations for your sizing of your equipment. You’re gonna be monitoring it. And what happens is when we start to look at that, we go, well, why would you run multiple chambers? And there’s probably four times that you would. One, you have different conditions. One chamber requires more heat, more vapor pressure, or a different drying system. That would be a reason why I would break those two rooms out. You have to process too much unaffected air. So that that rec room, which we have a very small corridor, we have to process the entire rec room. It doesn’t make sense to have our equipment set up to do that processing of that unaffected air. So therefore, we’re gonna run two individual chambers. You might have sensitive materials so that it kinda comes back to one, but you have sensitive materials and you’re gonna do two different drying setups or you’re you’re gonna be focusing your drying ability on some more sensitive items that are inside that building. And finally, you have contaminated environment in one area and the other chamber doesn’t have, isn’t affected with those contaminants. And so you might get in a situation where maybe one room is where the dog lives and the other room, the dog’s not allowed. In the room where there is a pet and it touches that matter that’s on the carpet, you’re gonna say, hey. This is a category three, and we’re gonna change it, change the way we handle this specific area. The area where the dog is not allowed, we’re gonna handle that as a category one. And that would be pretty much your your main reasons of why you’re handling it. So when we start to look at it, if we were treating these as separate chambers, our option that we have to move this into one chamber is to simply put up a small containment. And if you put up a small containment barrier, you can now use that entire area and only take one set of readings. Now I would walk around with my thermal hygrometer, and I would go and make sure that both rooms are are equalizing. They should. Sometimes they’re a little bit different, but not enough to warrant doing another set of documentation on there. Where you start to run into when do you start to look at building a second containment is if you have a small area that’s impacted away. Again, we have all this unaffected air, and we need to process it. So we make the choice that we wanna control the drying environment. So we would reduce our environment down to a small area, put our equipment in there, and we could reduce the amount of equipment we need. Plus, we’re also increasing the amount of control or the amount of impact our equipment has on that area. Ken, do you see anything with that other than my simple explanation when you would do it? Is there anything else that you would run into that you’ve you’ve caught? I I agree with everything you said about, the distinction between rooms. Especially if you can tie them together like that, that becomes a single chamber. And I would remind everybody that one of the most common failures I noticed among residential restorative drying mitigation companies is a failure to isolate the HVAC system from your drying chamber. It’s amazing how many people will leave the HVAC system fully functional as if it’s not even there and then put a dehumidifier in their chamber and not recognize that the HVAC system is gonna take your dehumidified air and dilute it throughout the entire area that that HVAC system is servicing. The HVAC system can completely negate your drying strategy. And as part of my file review process, I’m looking. What what did you do with the HVAC system in that room that you sectioned off with some, plastic walls and negative air machines, whatever? What did you do with that HVAC? And it’s amazing how few people or how many people are just forgetting about it and not recognizing what it can do to your drying strategy. And then you also run into the amount of paperwork. So one of the things that we we saw when I was with �Թϲ����� is that a lot of the a lot of the readings that were being taken was from every room within the chamber. So they’re taking an affected reading from the office and the laundry room and you only need one reading and then you just verify with your with your meter that they’re all the same and only record it once. You don’t need to record every room. That’s right. If there’s a room that’s an outlier where the atmospheric conditions are different in that room, you might wanna then adjust your your your equipment so that that doesn’t happen. You may wanna document that, but effectively, you should have very similar, psychometrics within your entire chamber. So you only need one reading. And then when you move to a different chamber, take one affected reading, but just sample it, inspect it with your meter. You don’t need to record it if it’s the same. And that’s where we saw a lot of paperwork get built up, a lot of time on the file wasted looking at the wrong readings, and then they fail to do the moisture content in the materials, which is critical that you have that. So Right. So one of the questions I just saw is how do you isolate the HVAC system? I would encourage, if you don’t know how to do that, you should go and get your AMRT course, the Prolyde Microbial Remediation Technician. That’s the mold class where they teach isolate, containment really, really in in-depth. In short, you put plastic over the vents, but now that’s gonna throw your balance of your HVAC system out of whack in the house. And if you’re in a really cold area where it freezes outside and you’ve got no HVAC service, do you think you could cause, those rooms to freeze? And if they froze, could pipes break as a result of your strategy? Yes. Does that mean you have to bring in portable heat? Then the answer is yes. The reverse is also true in Florida or any other hot humid area. If you isolate the HVAC system, is the temperature gonna get super hot and humid? Yes. So do you need to bring in portable cooling systems for that chamber? The answer is yes. And you document it with your, psychometric readings in justifying the use of your portable heating or portable cooling systems. Sounds good. So first question is if there is a cat one loss, but there is a microbial growth, does it change the cat from a one to a three? I’ve I’ve missed the beginning of that. What was that? No problem. If there was a cat one loss, but there is a microbial growth, does it change the cat from a one to a three? When you’re saying microbial growth, let’s be clear. Are we talking mold or bacteria? Answer both answer both ways, Ken. Okay. Alright. So mold. The answer is heck no. The presence of mold, even if the water comes into contact with it, has nothing to do with water category. It just doesn’t. It has nothing to do with it. What changes is the condition of the loss, not category. You have condition one, two, three. Condition one is normal fun normal mold ecology in a home. Condition two is elevated subtle spores, and condition three is active visible mold growth, but it does not affect category. In fact, the standard has a separate section on what to do if you encounter mold. You’ll notice that it’s kind of like that fourth category. It’s not really a category. It just says hazardous materials and mold. When you have those types of conditions, you must do the remediation before you address the, the, mitigation, the, the drying, the the removal of the contaminated water. But you gotta get rid of the mold first. If it was a bacteria amplification, then, yes, that is a factor in changing the water category. Is that the bacteria bacteria thrive in fluid. Mold does not. Mold survives in a humid atmosphere, but bacteria thrives in liquid water. So that’s why we don’t mix the two discussions up. Mold and bacteria are two different discussions. Hopefully, that answered the question. Yeah. It looks like a lot of people were saying mold, so that I think that was the perfect answer. Mold does not change water category. It it’s it’s not even to be it’s not an element of the discussion. And so with visual debris, best practices to justify CAT three when there’s a lack of photo documentation due to homeowner cleaning up the evidence? So, for example, matter. Sure. Yes. Of course, when you have debris that the fluid encounters, that’s going to change its visible physical appearance because it doesn’t come out of the sink looking like that. Right? So that’s not an a a condition that you would say, look at that muddy water. That sure is nice category one water. It it doesn’t. It doesn’t work that way. So, no, I I wouldn’t think that the pres presence of debris in the water should be ignored. I will also say that that is true of fireman’s water. Now we all know that the fireman that throw tens of thousands of gallons into the house, we’ve seen that water. It’s full of char and all kinds of other junk in that water. It’s not category one, is it? If it’s not category one, then it must be something else. And and so the point is if the homeowners cleaned up the visual debris, but they they make mention that that’s what was there before, your notes need to reflect that the reason you made the decision to go category two or three is because the homeowner indicated there was solids there or there was that they had removed previously removed the visual contamination or contaminants that were there, just make a note of it, and that’s the reason why you based your decision. And your chronological notes, whether they’re digital or or manually taken, will reflect why you made the decision you made. It’s really easy to defend you at that point. Right. Let’s go one more, and then let’s get moving. We’re we’re we gotta catch up on some time here. Perfect. So what really is the difference between a cat two and a cat three? Why isn’t contaminated just considered contaminated, and how much E. Coli is too much? That’s a great question. I would suggest that you give that feedback to the s five hundred committee so that they can consider, that nuance. Because believe me, the subject of water category has been a very heated discussion among within that committee for a long, long time. You know, we don’t have thresholds. We don’t know how to distinguish between a two and a three. It just is kind of like, there should theoretically be a, you know, a two and theoretically be a three. Somewhere there is some distinguishing line, but nobody knows what that line looks like. So why don’t we just distinguish it between category one, freshwater, and noncategory one, not freshwater, and, then we approach it that way because category one is defined. It is measured. There are thresholds where they say, if it doesn’t meet this criteria, it’s not worthy of being in the city supply supply line freshwater. It’s not category one. Yeah. And and and and part of the discussion when Ken’s talking about, like, the pools and and the level of chlorine in there and the E. Coli levels there, When you look at swimming water, swimming water has usually an E. Coli count of four hundred or less before they close the beach down, so you can swim in there. It comes down to risk management. The the you’re in a public beach in the outside. There’s no expectation. You can control the environment. There’s no liability for swimming in the water. You choose to enter that water. When you’re in a pool, there’s an expectation someone’s monitoring it. So they’re controlling the environment. That’s why there’s there’s different standards. For us, what’s the standard for the building when you have kids? What’s the standard when you have seniors? What’s the standards of a normal home? There is no no written standard. So how do you determine a category one versus a two, three? And it’s a great question. I I lean more towards Ken these days than I than I do previously. And then the reason why is because there’s a there’s a liability and there’s a risk management that your business takes, and you’re responsible if it goes sideways. So you you would lean more towards making sure that you took care of those contaminants. I’m Alright. Let’s get A lot of comments in the in the the the the feed about, some perhaps new definitions or new thresholds or a new way to approach the subject of water category. I’m excited about seeing these types of comments. These are the types of comments that need to be given to the s five hundred committee for consideration in changing or making the subject of water category something that is easier for the restorer to distinguish on and more conclusive on their our jobs. I think that we’re we struggle with, having some guidance on this subject, and yet it’s such an important part of our mitigation strategies. Yeah. I I completely agree. Yeah. So we when we get into psychometrics, there’s a there’s a way that you can look at it. If you when you it’s really important that you look at the readings and understand exactly what’s happening inside the building, outside the building, and how those those pressures and the conditions are impacting your drawing. Now when we get into this section it’s it’s justifying the additional time. You got to take your readings, you got to interpret readings, you need to set your drawing goals, you need to make sure that the pressures are working for you and and what happened is when we got into looking at reference psychometrics, if you looked at old paperwork and when we talk about you know, how things change, I changed my perspective of reference readings to inside the building and outside the building. So it actually looks a little bit more like this, is that we’ve got reference readings for the exterior and then we’ve got reference readings for the interior. And the unaffected area, you often see not documented very well or or at all. Inside that building, you are responsible not only for the drying chamber but for what happens to the rest of the building. So if your drying chamber, to Ken’s point there, causes secondary damage or you allow a different part of the building to freeze or overheat or the humidity gets too high, that’s on you. That that’s a that’s a restorer’s decision that you need to be responsible for. And so I look at it this way is that the reference areas are the unaffected area. If we had an increase in moisture in the unaffected area, that could justify putting a dehumidifier to stabilize that condition or that in that environment. You could you could justify putting an air conditioner in a hot unaffected part of the area so that you can allow occupants to to work normally in that space or live normally in that space. That’s how you need to start looking at the building and because when we start looking at the pressures, you can have it where you can have moisture impacting from the outside and the unaffected area into your drying chamber. So you have to compensate for that additional moisture that’s trying to get into your your drying chamber. That’s why I like that detailed calculation when we get to it. When we start to look at the exterior, what happens if our drying chamber is sending moisture into the unaffected area and also towards the exterior. It might be driving moisture to our outside walls. And so you have to be aware that the moisture dust doesn’t the water vapor doesn’t just go to the dehumidifier. A lot of times we think it does, but, I’ve got tons of photos where the restorer was trying to dry in a basement and their vapor pressure wasn’t high enough that the water was actually condensating on the cold surface in the wall and then it led to a large mold job after. Those are common things that you’re gonna run into. So you’re trying to understand where are all the forces applying to your your job and where does the moisture wanna go. Your dehumidifier isn’t, necessarily the exact place that your your water vapor is gonna go. It’s gonna leave to the other forces. I’m so glad that you said that, Chris, because I’ve heard all my career, these arguments that the water will go out the same way it went in. That’s just not true. It’s gonna go from areas of high vapor pressure inside the material to areas of less vapor pressure in the route of least resistance. And, usually, that’s the backside of the gypsum wallboard. It goes into the cavity. And if there’s a cold surface anywhere inside that cavity, it’s gonna go there just like it would go inside your dehumidifier to a cold surface. And so what’ll happen is it’ll go to the cold, let’s say, foundation wall or the exterior shaving because it’s cold outside the building. And your moisture meter says, look. My sheet rock is dry, and you think you did a great job when in fact all you did is you moved the water three and a half inches to the other side of the wall out of the the range of detection from your moisture meter. You think you dried it, but you just put it on, you know, three and a half inches away. And so after a while, that water will bounce back into the sheetrock after you’ve removed all your your equipment, and you thought you did a good job, and the building’s wet again. And so the question is, where did this come from? You know? And so this is where our understanding of how water leaves a material is an important understanding. It doesn’t always go to the dehumidifier. It will go to areas of less vapor pressure, and that might be inside the wall cavity, and that can cause problems down the road. So when and when we look at it inside the app, it it’s it’s looking at vapor pressure. I’m gonna pull up this. That unaffected area to your chamber, we can look at our our vapor pressures. We can look that we have forces that are coming in. And the way we do it inside of �Թϲ����� or the way the app is built is that those vapor pressures are showing you the higher the number, the higher the pressure is gonna move to an area of low pressure. So if we are chamber is the area of lower vapor pressure, we have the outside trying to get moisture in, we have the unaffected trying to get that in. Is that gonna impact your drying? Well, the outside might. If the house is is well sealed, it might have less effect. If it has a higher vapor pressure differential, you could have more effect. The unaffected area definitely has more ways to to access your drying environment, so the opportunity is greater for that to be impacted, but it could also reverse. Your drying environment, if it’s poorly set up, could be negatively impacting your unaffected area, and you’ve gotta be aware of that. There are a lot of secondary damages that you’ll see inside of a job, especially when it gets illegal. So it’s, like, not your run of the mill jobs. It’s the ones where people are have picked up on the problems, now they’re looking at it. That’s one of the areas you’re like, hey. The unaffected area was was wrong from the beginning, and it got worse. Direct result of the restorer not paying attention to it. Vapor pressure differentials in materials is a major area of opportunity for a restorer to really understand how to dry. When we look at vapor pressures, if you remember the old psych charts, psychometric charts from when you were going through your schools and maybe you’re using them now, we had vapor pressure listed on the side and we zoom in on it. That’s the vapor pressure. It’s a constant. When we start to look at our environment, we look at what material do we have. So we have a material at seventy two degrees, and this is what Ken was talking about. He’s taking the measurements of the materials. If we got a temperature of seventy two degrees at a hundred percent saturation, we can extrapolate. Now this isn’t an exact science and and but we can extrapolate a vapor pressure within that material. And then we look at our drying environment and say, well, we have a ninety degree chamber and we got a vapor pressure of point two. The difference between those two on the vapor pressure scale is the vapor pressure differential that we’re looking for. So point eight to point two, have a differential point six. And what we’re looking at is that creating those vapor pressure differentials between the material and the drying environment. A lot of times and can you I’ll have you quickly talk about this, but a lot of times we’re monitoring the the atmosphere without paying attention to anything that’s going on in the material. You take a moisture reading, but you don’t take the temperature. You don’t have an idea of how effective you’re making that drying environment. I’ll turn it to you. Well, I could spend well, I do typically. No. You you’re not you’re not gonna. You’ll spend one minute on this one. I know. But I spend days on this because this is the true force of drying. This is the measure. Everybody sits there and thinks it’s about grains per pound. Bull. That is that that is a misunderstanding. That is a misuse of GPP. It has nothing to do with drying forces or what the materials will eventually become in moisture content. It is not a game of GPP. It’s a game of vapor pressures. And this is the the true metric that quantifies the force of drying that you created, and none of us are are are documenting this amazing metric that says we started this drying force off with a delta vapor pressure of point six inches h g, and we entered the job with point four inches HG. And throughout our drying plan, this is our drying force throughout the entire, process. And I don’t know of a single restorer on the planet that reports the force of drying they created. Rather, they’re just saying, look at the GPP, and there is nothing about this psychrometry that it that suggests that grains per pound is a qualifier of your drying forces. It doesn’t work that way. The only legitimate use that I know of for GPP is a grain depression calculation from your dehumidifier to establish how much water, the rate at which your dehumidifier is removing moisture from the air. That’s the only legitimate use I know for GPP. Every other attempt to use GPP in our discussions has is is made on fluff that you can easily debate and defeat. GPP does not quantify your drawing forces. It is the wrong measure. Your ladder is leaning against the wrong wall. Yeah. Just looking here and make a quick change. There we go. I I would agree, Ken. Here’s what we got is when we look at our vapor pressure, we got this pole here. If I double my drying force, will I cut my drying speed in half? And you’ve got these options in the pole is no. I don’t believe doubling the force will impact speed. Yes. Use the power of the force. It depends. Other factors can impact the drying speed, or I don’t know, but I’m learning. And and all those are fair fair questions. In here, it’s interesting because you get a lot of, discussions about applying massive amounts of heat to a building, running desiccants, which is, you know, the insurance industry because I I think they have a lack of knowledge. They call it specialty equipment. They’re just tools in their toolbox, but they’ve defined them as specialty tools that require special permissions to use them, which makes no sense. But that’s the industry we’re in right now. The polling questions are coming in. It looks like eleven. No. I do not believe doubling the force will impact speed. Yes. Use the power of the force. It depends. Other factors can impact the drying speed, and I don’t know, but I’m learning was eighteen percent. So sixty seven percent say it depends, and we got three and twelve. Twelve percent say no, three say yes, and the majority says it depends. It’s interesting when when we look at the at vapor pressure and and the impact. Let me give you an example here. We take our building, and we put our drying conditions in here. So we look at our material conditions. And inside our materials jeez. You know what, guys? I apologize. I don’t have the vapor pressures on this, but I know that if we take our material conditions and we start monitoring what’s happening with the with the material conditions, what you should see is that the material will have a high vapor pressure. Our drying chamber is gonna have a lower vapor pressure, but the lowest vapor pressure that is in the building is our dehumidifier exhaust. Why? It’s taking the moisture outside the drying chamber. So our dehumidifiers are bringing the chamber air down, and the goal is to get that air really dry in the chamber. Your lowest your driest air should be coming out of your dehumidifier, and the goal is to try to get the chamber and the dehumidifier as close as possible. That’s when you have a a really torque down drying environment. But you’re looking at those building those material conditions. And as Ken said, nobody’s looking at the material conditions of what’s the temperature and what’s the moisture content of that of that material. If you don’t know that, what are you doing? You’re literally just building a drying environment and taking a reading and walking away. And so you have to change your your perspective of if you’re focused on drying the material, no one cares if you dry the air. They care if you dry the material, but you have to dry the air to get the conditions to dry the materials. And that’s what you’re really focused on when you’re when you’re working on a job. Now what factors will impact your ability to dry? And this is what I think is really interesting. Ken, I’ll I’ll I’ll just get you briefly touch on this point because this is a critical pathway that if you’re not focused here, you’re gonna miss a bunch of it down the road of your drying project. Right. I just wanna reemphasize something you said. We are hired to dry the building. It’s not hired to dry the air. And with that in mind, all of this focus on the air is an incomplete consideration when we’re we’re when we’re evaluating our drying strategy. Remember, we we need to inspire the water molecule to leave the material we are drying and becoming a gas. And, I it’s very important that the, that we consider the condition of the material and the condition of the water molecule in there that we’re trying to deliver energy to in order for it to change state from being bonded with the material we’re drawing and becoming a gas. We always look at the air, but that tells us nothing about that molecule in the material we’re drawing. And that is that’s the foundation of most restorers’ documentation failure is that there’s all this focus on the air and then a little bit of focus on the machine and then very little information about the material you’re drawing. If we’re lucky, we can get a meter reading off of that material. And yet that’s the the focus of our objective is to work on that material, and we’re looking at the air. We are completely misguided. And I I would encourage our education programs to be more attentive to the the the need of the the the industry being that we need to focus on the material far more than just the air. The air is only half the equation. What happens with these materials? And when you look at them, it’s consider the material permeability, the ability for the moisture or the water vapor to move through a material. And think of it as a destination where you have an actual area. So if you wanna look at it like dry town, and we’ve used that example where you go from a certain distance. If you travel through a material that allows you to pull a lot of moisture through, you can get there very quickly. But if you’re in a material that takes forever to dry, it’s gonna take you multiple hours to get the same amount of water vapor out of that material. And so when we look at drying, the type of material we’re drying is gonna impact our ability to get the job dry in a matter of time. And so there’s jobs where you might have sat there and went, you know what? I used to get jobs done in three, four, five days, whatever the number is. And now on this job, this seems to take a lot longer. I wasn’t anticipating this job being that hard to dry. And what you’ll find is usually has to do with one, how did you build your drying chamber? And if you did it the same way, then the other factor is your materials. And so when we look at the permeability, you’ve got, this this phenomena where the higher the perms, the faster the moisture will be removed from a material. And so that’s more moisture coming or more water vapor coming out of the material. We start looking at what type of barriers do we have. So we have a vapor impermeable vapor barrier, less than point one perms. That’s poly, sheet metal, rubber membrane, foil face insulation, very hard to move moisture through, almost impossible to move moisture through. Then we come into very, vapor semi impermeable vapor barriers, which is four coats of latex or more. And the more coats you have, the harder it gets. Consider this anything that’s older than buildings older than five or ten years. Normally, after about five or ten years, they get a recoat of paint. Twenty years, you’re almost guaranteed that you’re running into this. But normally five to ten years, there’s a sprucing up of the paint. After your first set of paint and you start adding the second coat, the third coat, the fourth coat, you got a building that’s fifty years old, how many coats are on that wall covering? All of a sudden, you’re walking into multiple different types of of vapor barrier or different a different degree of vapor barrier that gets really hard. Maybe it puts you back into the last category. Then as we start to look at, we got vapor semi permeable vapor barrier. This is your new construction. Your newer homes have three coats or or less of latex paint. You got foam board, asphalt, building paper, OSB, and, and plywood. And so now all of a sudden you’re looking at going, okay. Well, if I got a layer of plywood, I can maybe dry a little bit faster. And then to Ken, what he was talking about before is you got this other layer, which is the really easy stuff to dry. Vapor permeable vapor barriers, unpainted drywall, the backside of a drywall board is easy to dry. So if it has a choice between eight layers of paint or paper, which which side is the water vapor gonna choose to go through? Well, some of it may try to get through this way, but most of the pull is gonna go back into the paper. And that leads to your problems in some of these older homes when you’re creating the drying environment, you create the vapor pressure, and the water has no option but to go into the other cavity on the backside. I like the inject to dry systems for that to be able to circulate the air on the side that’s gonna release moisture the easiest. You got Tyvek. You got insulation. And to put it in perspective, Ken caught this on on a presentation we had done a few years ago, and I I love the the perspective they caught on this. If you look at the speed limits, it looks like this. Vapor impermeable vapor barrier is like one mile per hour. Not fast. You’re not gonna get there. Semi impermeable is ten times faster. Semi permeables is ten times faster than that or a hundred times faster than the vapor and the impermeable vapor barrier. And then you go vapor permeable, the the drywall, the unpainted drywall, it’s a thousand times faster than the poly. Put that in perspective and you go, oh, well, in this house, I was drying a thirty or forty year old home with lots of paint that’s on the wall. That’s why it took me longer to dry. Oh, maybe that’s why we should have opened up the wall cavities because there was all of these barriers in there. I was drying a rubber, carpet pad. Oh, that might impact the way that we dry because it’s now acting more as a as a as an impermeable vapor barrier. All of these are gonna impact your drying situation. This is why drying is so hard is because there’s a whole bunch of factors from the way you set up your job to the temperature of your materials to the type of materials to the permeability of the materials. Ken, you wanna add something on this one? You’re muted, which is the best time. That’s the that’s the way I like you. That’s right. Yeah. I apologize. The only thing I would add to your excellent comments, Chris, is that, I’d invite everybody to envision if the job takes four days to dry with one dehumidifier, couldn’t we dry it in an hour with fifty dehumidifiers? It doesn’t work that way. That’s one thing I want this group to know is that you can’t just keep doubling up on the equipment and think you’re gonna get it done in minutes if you just, you know, exponentially increase the amount of equipment. And the other thing I’d invite everybody to pay attention to is the finish on the wall, everybody. You know, I know that we’ve been taught that a latex paint allows water vapor to go through it much easier than a gloss paint. And while that is true, I would invite you to consider if you’ve got multiple layers of paint, every layer provides some restriction to the passage of vapor through it. And so if you’ve got ten layers of paint, the perm rating is not what the last layer is being latex paint that allows water to go through it freely. It’s the combination of all those layers that will result in possibly an impermeable surface. And if we think that your dehumidifier is doing anything to the process, you’re mistaken. It’s a it’s just it’s physics. The water has to be able to go into the low vapor pressure atmosphere, and it must have, some no barrier or limited barrier in that transfer process. Then we get into dry standards and drying goals, and this is an area that can get really contentious in a legal perspective of what were you trying to do and was it justified. And one of the areas that we see is that you have to understand what a dry standard is. An approximate a reasonable approximation of the moisture level or moisture content of a material prior to the water intrusion, and that’s from the current s five hundred. And when we look at this dry standards, the best way to determine what you’re trying to get to is to grab an unaffected material inside the same structure. That is by far your most accurate method. And the reason why is you’ve got heating and air conditioning systems, that can impact the moisture content of material. You’ve got normal living. Is there multiple people that take showers and lots of cooking that will impact the normal dry standard, the normal condition of that material, which may be different than a single guy who microwaves his food every day. That’s a totally different environment. So you have to you can’t apply it across. But if you if you don’t have access to that and that’s not possible, then you would go with your known geographical area, previous experience, or reference from similar structures. All of those are opinions. The only one that is actually fact driven is the first one. So we get asked or when we got asked a ton at �Թϲ�����. Hey. Can you put in just a regill dry standard? I would advise you not to use that because that one is an opinion not based on fact. You may be completely off inside that structure. And so your goal is to grab the most accurate reading, which is the one from that that environment. When we look at drying goals, this is very important that the restorer, not anyone else, the restorer should establish the drying goals that would be expected to return the structure, systems, and contents to an acceptable condition and inhibit microbial growth. And these two statements without any further context are normally taken out of context and said, hey. As long as there’s no microbial growth, you’re good. And that’s inaccurate, and that’s wrong. There are other factors that we put in and other responsibilities of a restorer that has to be taken into consideration. When we start to look at our drawing goals, there’s a whole bunch of reasons why you might wanna do it. Are we discussing the drawing goals with an agreed scope? If the project has limitations or complexities, that may impact what you’re able to do. What’s the composition? What are the expected conditions after the restorative drying? So if we’re installing materials that are moisture sensitive, as the restorer, your job is to ensure that you create the building’s conditions to accept those materials. You can’t just leave it, to the to the next sub trade to figure out. You’ve got prevailing weather conditions. You’ve got building assembly limitations, and you’ve got the USDA Forest Product Laboratories handbook, wood handbook. Now I’m gonna talk about that a little bit here because that came up in a dispute that I was in, and it was misquoted. And I’m gonna explain to you how that applies to our industry because you will see it come up as a discussion. Along with these, above considerations, where applicable, it is recommended the drying goal be within ten percent of the dry standard. Now that’s what the expectation of the restorer. And the reason why is, and Ken can correct me if I’m wrong, but the reason why we have that goal is that if you get within ten percent of the dry standards, so if it’s six, it becomes six point six. If it’s seven, it’s seven point seven, or if it’s ten, it’s eleven percent. The reason why is that tolerance allows almost all materials to be installed in that building without any concern. And the goal is that you’re not you don’t have time to wait for a building to acclimate naturally. You have to get it ready for a quick repair. Ken, is there anything that I missed on that as to why that ten percent has been recommended? Yeah. Because if you go all the way to ten percent, you’re surely going to have overdried some areas, and that’s the concern. You don’t wanna overdry things. You don’t wanna pay for overdrying things. So if you get down to within ten percent, generally speaking, it’s not going to change dimensionally as it goes all the way back to your your target of, let’s say, ten percent. Eleven percent is close enough. It’s not gonna change significantly dimensionally. And I will say that, you know, there’s a a lot of energy from debaters when they say, we only you only need to dry to sixteen percent or fifteen percent, whatever the magic number is they come up with, because it won’t support mold growth. That’s an incomplete consideration of what our objectives are. We are not hired to produce a house that won’t turn moldy as a as an objective. That’s not what we’re hired to do. We’re hired to return the structure to a condition that it was prior to the covered peril. And if you’d stop at fifteen percent and your dry standard is eight, you’re seven percent away from that. And if you’ve got wood products as they dry from fifteen down to eight, it’s gonna continue to shrink. So if you went in there and started painting all the trim work that was dried to sixteen percent thinking that’s good enough, those boards are going to shrink, and you’re gonna have a a a flaw in the painted material. And that’s on the contractor because he dried it to a damp condition, not an acceptably dry condition. And that’s the difference. And that’s why I fully reject recommendations to stop your drying at fifteen or sixteen percent. That is not in the standard of care. That is not compliant with our contracts agreement, and it’s not part of our objectives. It’s just to create a condition that won’t support mold growth. So if you guys are using �Թϲ�����, we built that into the app. So you’ll see that there’s the moisture content. The moisture content in your dry standard, that’s what your meter had had pulled off the material. In this case, it’s drywall. And then the dry standard variance is ten percent. So we leave that as a default. And so it automatically puts you at your drying goal of fifty five points in this case. That effectively is setting you up. Now I had this case and I put this in here because this got referenced is that the wood forest handbook or the wood handbook, wood as an engineering material, that restoration project should be following this because it was referred to in the standard as an area where you could refer to you could you could cite and and use as part of your guidance. And it’s true. You could do that if you have new construction, if your building’s gonna be vacant for a number of months and you know that the conditions are gonna be there, you might consider using that. But as a general rule, that does not apply to you as a restorer. That applies to new construction, and that’s the the goals that they have. When we look at restoration, we’re following the standard, guys. So although there’s other things that could influence your decision making, the standard does apply to you, and that’s what you’re gonna be held accountable to. So if you create a situation where secondary damage happens because you didn’t dry to a proper, number, maybe ten percent. But if you determined it was more, that’s fine, but you’re also the one controlling the environment. What you have to look at is these are the two conditions that would be there. In the handbook, it says new construction normally within five percentage points, not when we say ten in restoration, we’re talking ten percent of our dry standard. There, they’re talking a full five percentage points. So if wood is eight percent is where you’re trying to get to, you can install it at thirteen and let it naturally acclimate over thirty or sixty days while the building’s being buttoned down and then there’s the mechanical processes that are being applied. It’s got time. In restoration, the the the goal of insurance is to get you back as quick as possible. You don’t have that time. So we follow the the five hundred and that if you ever hear it referred to, that’s the only consideration that you might be like, hey. This building’s gonna be vacant for a year. Okay. You could probably not horse down on your drying. You can get it into five because you know the parameters of the building would allow for that. But in the normal course of most restoration, very few jobs are gonna follow that format. And so that’s how I would look at it if I was if I was you. And your goal is to get as close as normal, get the get it as close to normal as possible to the normal condition that’s inside that building. That’s your goal. And if you follow that, your projects are gonna go really well. And now you’re starting to combine that. You combine vapor pressure, material permeance to the the drying goal. All of a sudden, you’re starting to build a plan, aren’t you? You know what you need to do to get your your temperature and humidity set up. You know what you’re dealing with on material, and you know what your drying goal is. That sounds like a plan coming together. Alright. We’ve got a short period of time for a few questions. Perfect. So what if you have multiple affected areas, but they’re separated by walls and require separate chambers on the same laws? If they’re separated by walls. So if you were talking like a hotel room where the rooms you get two separate rooms that have are separate chambers and you the common hallway can’t be used, yeah, you just run them as two separate, drying environments. It means more paperwork. So you’d have to talk to your customer and and this is just communication guys. Like, as a a as a former adjuster that wasn’t an adjuster long enough to to be good at it, you you wanna let the insurance company know, hey. There’s this complexity on the job site that’s gonna result in more time for us to document the job because we are drawing these two rooms separately. It would be easier if we could shut the hallway down, but we can’t. So we’re we’re we’re gonna have to do a little bit more paperwork. That’s just that’s just the way it is. Or let them participate in. Let’s close the hallway down and make people go a different direction. That’s also an option where we put the dehumidifier in the hallway, and we feed the air into both both rooms. It it it just means you got more paperwork if I understood the correction or the the question right. Alright, guys. Questions around moisture mapping and moisture points. When you start to look at this, this is documenting the evidence in a visual context that allows you to understand what’s happening on the job site. It’s like a map. Right? We call it moisture mapping, which gives you the ability to reference different positions within the building of how you’re doing it. And when you look at your loss, it helps somebody who’s never been on-site and and years ago we used to have adjusters come to site, they look at it go, yeah, I get an idea for it. Now they sit in a room and they may have never been to a job site or don’t have the experience of the previous adjuster. And so now what you’re looking at is being able to provide a visual story of what happened. Why is the toy room impacted here? How come you’re dealing with the kitchen? All of that could be told through a moisture map. Moisture maps may be drawn on on a schematic. They might be done in a more rudimentary way. They could be even hand bombed. And what you’re doing is you’re basically just trying to provide context. Now the better technology has come along, the easier this is, the faster it is to create. So your your quality of your file can go way up. �Թϲ����� has, �Թϲ����� floor plan, that allows you to do a large floor plan in six minutes so that you can get this information and put it into your your moisture map. But regardless of how you do it, you’re gonna wanna document your job site. Now the old way we used to do it would just be put tape on the wall so we know exactly where we are. Now I still use this system because there’s a combination of digital documentation and the real world. And in the real world, I want my technician to be able to walk around and see what moisture point one in this room is because that’s important for making sure that we’re doing the readings in the same area. Now it’s a little different. If we’re doing drywall here, we take our drywall reading. If I’m doing baseboard or sill plate, I’m taking it under that reading or in that general vicinity. If I’m gonna do the the subfloor, I come down off of one and I go to the subfloor. I only put these moisture points here and and work my way through that moisture point through the different materials we’re reading. There is the other way that you have where you could come in and you could put dots. And so different dot systems exist. You could use multicolor dot systems. I don’t like multicolor because it gives a a bad indication that this was wet and then this is, like, less wet. And then now you’re we’re yellow and then green is good. I don’t like the multicolor but people do it because you get them at Staples cheap. I like the blue stickers. If you put the blue sticker on, you can put in when you took your readings. You can get two inch blue stickers that you can put on. It just shows where you’re taking your different readings. But Ken and I would agree, a lot of your your readings, it doesn’t dry straight down. It’ll dry in in in weird patterns at times. So what are we actually measuring? Are we actually taking a reading? Are you averaging it out? Are you showing us just the wettest reading till you get to the do you only take the bottom and just show it’s a hundred percent, hundred percent, hundred percent forty zero. How are you taking your readings? And, Ken, you wanna comment on that? Actually, I I don’t have much good to say about that. But, yeah, boy, do I ever see a lot of that on the reports. On day one, it’s one hundred on a scale of a hundred. Day two, it’s ninety. Day three, it’s eighty. Day four, it’s seventy. And then day five, thirty, and then eight. It things don’t dry that way. It just doesn’t work that way, and it it’s very frustrating and discouraging to see because you know that those numbers are probably made up because mature moisture doesn’t move in the way that they described. But what am I supposed to say? Call them a liar? You know? It it’s kinda one of those things that you you you know that it’s wrong. You know it’s fraudulent, but to say it is not really a professional thing to do. And in private, I could question them, but it’s not gonna change anything. I just I don’t like seeing fraudulent paperwork. It just really discourages me because I can’t have an intelligent conversation with an individual with numbers that are that have exposed their, insincerity. But now in in all fairness, this comes back to the biased documentation to get paid versus being an honest broker. So the industry, both the care insurance industry has things like, hey. We wanna see it a certain way. We wanna see progress, and so you’re interpreting your readings. Now if you were to come in here and take your moisture point, you might say at twenty four inches, it’s this reading. At six inches, it’s this reading, and you would just be managing two points within the same wall for the same material. You’d measure the top dot, the bottom dot. Oh, top dot’s dry, so we showed we made progress, and then we’re waiting for the bottom dot to dry. It it’s it’s not perfect, and there’s no good ways. Like, I’ve seen moisture readings where you say it’s it’s a distance from the the floor, and then you pick a point, and you’re saying we’re measuring these different distances. It’s time. How much time do you have? How many moisture points are you doing on the wall? There’s a whole bunch of factors that the residential restoration environment has created from a business perspective of, like, well, we only take one reading on one wall. We average it out. We put it in our documentation. Can’t validate it, but that’s a a a way we we operate. Then for someone reviewing your file after, you you you have no way of validating data. And then one of the other ways that we see data being collected is where they put in these these cards. And so more in health care or some industrial applications where there’s a third party reviewer that’s on-site. So it could be could be the infection control officer at a hospital. It could be, you know, one of the the laboratory scientists that’s reviewing it. They wanna see what’s happening in the wall. So you see these stickers. This is uncommon for residential, but more common in, in industrial and health care. And then what we look at is we’re looking at how do you document those moisture, points and where are you taking those moisture points. And so as we start to look through this, we we are documenting it in a room. And to Ken’s point, well, what if it’s four feet like, what if we’re dry here, but four feet away we’re not? Well, do you start a new moisture point to indicate that, hey. We’re dry in, eight spots, but we found a new one that’s wet. So we redocumented. I like that that position now that digital is starting to come into play. When you find that all your points are dry, but you have one that’s wet, you add a new one and indicate that it’s the remaining area that’s still hard to dry. So, yes, we made success in in eight of eight, but we still found an area that that that’s wet. They’re not ideal, but it’s it’s a better way. And as paper moves to digital, as digital improves, you’re gonna see that I think this is gonna become easier for the restorer, not harder because the tools are gonna be more adaptive to what you’re doing in the field. Alright. Let’s jump into this poll. What percentage of cat two three jobs do you stabilize before drying the job? We don’t stabilize jobs. That’s a fair answer. No one knows if you put that in there, by the way. Zero to twenty five percent, twenty five to fifty, fifty to seventy five, or seventy five to a hundred percent of your jobs that are cat two are stabilized before you dry. And the results are coming in. I appreciate guys, I always appreciate your honesty when you guys do this. I know, I sometimes get emails after being like, I didn’t wanna give you the answer, but I did anyway. Really appreciate when you guys do this. It’s, it makes the conversation, a little bit more real and enjoyable. Alright. I’m just seeing a poll on what you what people or what the audience believes the definition or the objective of stabilization is. You’re you’re gonna get a chance to to to explain what it is. Okay. Alright. That’s good. So so seven percent said we don’t stabilize. Zero to twenty five said that, nineteen percent of the sorry. Nineteen percent of respondents stabilized zero to twenty five. The majority no. It’s not even the majority. Majority of people aren’t doing it seventy five to a hundred percent of the time. We got forty one percent doing seventy five to a hundred percent of the time. Here’s I’ll I’ll let Ken tell you what the answer is. What? On the this the seventy five to a hundred, forty one percent of you stabilize on your losses. So that that means that that the rest of us are are, at times, not doing it correctly. These jobs require stabilization more times than not. There’s very few situations you would not stabilize a two or three. I agree. You should be doing it almost on I I can’t hardly think of an example when you wouldn’t have a stabilization strategy on a contaminated loss. And in fact, the standard even has a component in the blue pages that speaks of stabilizing category two, three losses. So if you’re not stabilizing on those losses, you’re you’re skipping an element of standard practice. So so here’s the only time that I would I would say that you could skip stabilization and dry in a contaminated environment, and that would be in a case of, like, a fire where you have a building that is contaminated, but you wanna get it dry and you wanna remove the moisture from there. You could dry a fire contaminated building again, All like, it’s one of these rare situations where you know that you’re you’re gonna spread contaminants throughout the building, but that’s not a concern of yours because you have to do other work. And so you’re you’re choosing to dry a contaminated building, and then you’ll deal with the contaminants. Honestly, though, your your gear is gonna take a a a major **** kicking, so you’re gonna have to have gear dedicated to doing that. And I don’t know if I would do that. Right? Or you’re bringing in desiccant air and putting it in and and firing out the other side. I don’t think I would do that to my gear. That is one there’s only been two jobs that I’ve seen where that would have been the path I would have chose because the fallout or the cost of not doing it was substantially higher, but I you couldn’t blame the restore for not making that decision because it’s not taught in our industry. So to Ken’s point, seventy five to a hundred percent of the time is the right answer. Now creating conditions for stabilization and drying, the problem that we run into is that a lot of the adjusters see the same equipment on the job and don’t understand the difference of it. A lot of restorers aren’t necessarily trained when you’re going through your your your lessons through the, through your training. You’re not necessarily getting a very clear picture of how to apply this to a job site. And so when we start looking at creating the conditions for stabilization versus drying, we have to look at what is the objective of stabilization. And the objective is to prevent secondary damages to unaffected materials. You are not doing anything to the affected material. If a material is wet and you need to stabilize to deal with other conditions, you need to deal with some of the business stuff that that’s coming in, that you’re you are gonna get amplified microbial growth on the wet materials. Your goal is to keep it off the unaffected materials. So I broke this down. And this and and when we looked at this, I said, well, why would you why would you stabilize a job? Well, the insuring needs to make coverage decisions. The tenants are in the way. So those are things that you can’t control that is a reason why you would limit the amount of cost. You’re like, hey. You know, I’ll sacrifice my equipment. I’ll put it in, try to secure the job, but I can’t do anything. You might have, where payment is in question. And so if you’re not sure if you’re gonna get paid, I could throw a piece of equipment in to try to secure the job, but I need to find out who’s paying. It needs cat two or three remediation. Your biohazards, hazardous regulated materials you have to deal with in advance, or you need to mobilize resources. So in a cat situation, there’s nothing wrong with you stabilizing a job to reduce the severity in order for you to get resources. And you might have arrogant people to come back and say, while you’re restore, you should do it. Well, that’s not the reality of our business. If you have to mobilize resources, you might have someone say, well, they shouldn’t have taken the job if they didn’t have the resources ready to go. We’re in the business of restoration. Not everybody has resources. You take the job. You move your resources in place. That’s the business. And so from a business decision, these are the reasons why you would consider stabilizing instead of going straight into drying. Now a lot of people will go straight into drying on these situations, and that’s what we saw in the survey. And so you don’t wanna be doing that. Now what is the stabilization conditions? Somewhere between sixty and eighty Fahrenheit, relative humidity between thirty five and fifty five. If you’re in those conditions, you’re just controlling the environment. You’re you’re not allowing. Now, Ken, you had said that is it that the relative humidity has gone up in in some cases, or are there or or would these be the the numbers you’d be using? So, thank you, Chris. Here’s what I would say about stabilization. You were correct when you said the objective of stabilization is to prevent secondary damage in unaffected materials. Has nothing to do with the materials that are wet. Has everything to do with everything else that is unaffected. Now we do know that from our WRT IICRC courses that, you never want to exceed a certain relative humidity for fear that you can start causing damage in unaffected materials. Now historically, Chris, we used the IICRC had set sixty percent relative humidity. It’s the maximum humidity you would ever want to have in your, structure at any given point. Now recently, I’ll just change, I’ll tell you what a recent change in the last two years from the IICRC is. They’ve changed that number from sixty percent relative humidity to seventy percent. Don’t know why it came out of nowhere. It hit me as a surprise, but that’s the new not to exceed threshold. Now that is what the objective of stabilization is, to prevent the atmosphere from exceeding the sixty percent or seventy percent relative humidity threshold that we were taught never to exceed because that can cause damage in unaffected materials. Now if that’s the objective, it has nothing to do with the dehumidifier formula that is in the standard, has you never reference it for stabilization. Your stable stabilization strategy is keep it temperate, something that people can live in, sixty to eighty Fahrenheit, because that’s what normal looks like in most people’s homes, and between thirty five to fifty five percent relative humidity, because that’s what normal people live in is thirty five to fifty five percent, but it is not an industrial drying condition. So when I see contractors saying, we executed a stabilization strategy, and we got it down to twenty grains per pound. My head explodes. That’s a drying strategy, not a stabilization strategy. They are completely different, and you document in your paperwork what you’re trying to achieve and maintain in order to keep the unaffected materials from becoming affected. Now will the materials that are wet go nasty? The answer is yep. Sure will. But you’re not addressing the nasty stuff that you’re gonna be cutting out. It’s all about protecting the unaffected materials. That is its sole objective. And quit confusing the two. Keep them separate. Two completely separate discussions, separate objectives, and that way you can control the critics that want to challenge your stabilization or drying strategy and your use of equipment. So in here, if you guys wanna look in the standard, there’s humidity control and contaminated structures, controlling humidity and stabilization initial humidity control category one, and then you’ll find this in mitigation phase one and two. Now what’s what’s interesting here is that in stabilization, and Ken’s touched on this before, you’re not gonna find air movers are part of your stabilization. And the reason why is we’re not transferring energy to the wall materials. We there’s an argument that you say maybe you don’t even take a a a reading of the materials. I think you do. I think you take an initial reading to validate the materials were wet when you got there. Wet materials are wet. We’re now stabilizing. I would expect that those wet materials are gonna be sacrificed later on. And so I like that documentation. I know there’s some guys that say when we’re stabilizing, we don’t do the inspection, but I I I I think that’s a flawed method of not inspecting the job site and documenting the current conditions. I got a counter view. I got a counter view. The standard says you’re supposed to do daily documentation of the drying process. There is no such language on stabilization. But I so so I say the initial. I I think you and I are probably in the same Initial is good. You gotta be able to document that things were wet and what was wet, but you don’t need to do daily documentation on the stabilization strategy. Because there’s no expectation that those materials are gonna dry. And so They’re not trying to dry them. They’re gonna be They’re say they’re wet, and they’re gonna be and and now when we go to start drying, we’re gonna do another inspection at the drying phase. And we will now document what condition those materials are in. And then you’ll remove the material. So you might be like, hey. Drywall was at a hundred percent wet for twenty four inches, and we cut it out. K. It’s now been removed from the from the your reading log, but you validated it was wet. You validated it was category three, and you removed it. And so all of that tells a story that when you get into a legal process, a file review, a dispute resolution, or you’re gonna go to trial, It’s all non biased data. It just says, this is what happened. Here’s what it was, and we removed it. And it’s easy for guys like Ken and I to come and understand the interpretation of your data. Good. Drying objectives. A little bit different here. Ken knows a thing or two about drying objectives. When we get in here, we’re creating the conditions to remove water molecules from affected materials to reach your desired goals, and and you’ll hear in here vapor pressure differential, and you’re trying to drive that vapor pressure differential normally between point three and point five depending on it’s probably reverse it. You wanna start with a higher vapor pressure differential to a lower one, so point five to point three. But the the reality is if you can get point six or point seven, if your conditions allow for it, you’re gonna be putting that pressure or applying that vapor pressure to the materials. You kind of gonna be in this range on on more cases than not though. This this point five to point three, you probably start point five, point seven, and you’ll end up at point three, point four, point five, something like that. But when you start looking and and speaking about vapor pressure differential between materials and the and the, drying chamber, you’re now starting to tell a story about what you’re trying to do. You’re not just placing equipment and walking away. You actually are saying here’s what the intended purpose is, and so your drying conditions have to be set up for the for that parameter. Now we have drying, or equipment calculations, and this is something that you run into where the insurance industry, because it directly relates to a price, has latched on to certain parts of the standard and misinterpreted certain parts of the standard, intentionally or unintentionally over time. And what we see is that these calculations are they apply a lot of the time. The air mover calculations are part of the standard. So they’re inside the the standard of care. They’re not in the appendix. Ken will disagree that they belong there because there’s reasons that you can validate or move around that this is a prescribed drying method that doesn’t necessarily have any science behind it. But you get one per room, one for every fifty to seventy square feet of wet floor, one for every hundred to a hundred and fifty square feet of wet wall over two feet in ceilings. If you have an obstruction like a a a an island, you get one for that and you can determine it. Is it a long island? Maybe you need two air movers for that or or a different type of obstruction. Every inset or offset over eighteen inches, you get an air mover so that you can ensure the airflow is moving across it. Now what’s interesting is that that’s part of the standard of care. And then it goes in and talks about water that is less than two feet away from the wall in another room, and we go back to sort of an old formula that was back from the old, standards that says you get one air mover for every fourteen feet of this, floor and and, wall that are impacted. Now the problem is is that those are not considering what type of air movers you’re using. You could be using a little mini air mover. You could you Ken’s got these little fans that you could have, the little handhelds. It doesn’t say that you’re moving high velocity, low velocity. So inside the standard, there’s also discussion about what type of velocity you have and what type of constant or what what type of velocity you’re gonna have when you have a constant rate phase and when you’re in the falling rate phase. And those velocities are like this. Constant rate phase is six hundred feet per minute, and the falling rate phase is approximately a hundred and fifty. So we’re gonna start off with high airflow, and then we’re gonna reduce it. Ken, you wanna add anything to this? Yeah. Very quickly. So just so everybody understands what we’re speaking of when we speak of the constant rate drying phase and falling rate. When there’s a puddle of water and you have airflow going over it and you’ve it’s in a, a consistent environment, there’s gonna be a rate of water molecules leaving that puddle of water that is constant until the puddle of water is gone. It’s gonna be the same rate of water molecules leaving until it’s all gone. Now when you have water trapped in the material, the as you probably have experienced, at the beginning of that drying effort, the rate of evaporation is quite quick. But as you get closer and closer to your dry standard, the rate of evaporation slows down. That’s called the falling rate drying phase. So if there’s liquid on the surface, you’re in constant rate. If there’s no liquid on the surface, you’re in the falling rate drying phase. So that’s what the difference is. Now the standard does say it speaks of the constant rate phase, you should have six hundred feet per minute. That’s about eight miles an hour. That’s a significant winds wind speed. It’s about this the velocity of air that comes out of your air mover when you’re about a dozen feet away. That’s about ten eight to ten miles an hour. Now right in front of the air mover, it’s between eighteen and twenty four miles an hour. Twelve feet away, about eight to ten. The falling rate phase of being one hundred and fifty feet per minute is about two point two miles an hour. That’s the wind velocity. I’ve got a a magazine or a book. You know, when you wave it in front of your face, you get a little bit of a breeze. That’s about two miles an hour. So when you are trying to dry out sheetrock or plywood or plaster or concrete or hardwood or any other material that has water molecules inside it, you want no more than this little breeze. If you put more wind velocity, you can actually slow the drying process down because you’re making a skin of dry material trapping the moisture inside it. It’s called case hardening. It’s a real thing. And so what you do is you slow the rate of wind velocity down. That way this there you don’t make that skin on the surface. It remains a little bit moist so that water can transfer through the material about two miles an hour. Now we have to change the way we think about the deployment of our air movers so that we select the right style of air mover that can accomplish the two, two and a half miles an hour wind velocity over all the surfaces that we would encounter in that chamber. Because if it’s too fast, you can slow the process down. If you don’t have enough, then the process goes even, can also slow down. So you have to have just the right amount of velocity. How do you measure it? Chris had a picture of that anemometer. Anemometer is that, device that you see on that screen, and it reports it records and measures wind velocity at the surface of the material you are drying. Photograph that, and now you can prove to the debater that you had the correct wind velocity for a competent drying of a falling rate drying mitigation. Yeah. I love what you called it the debater. Yeah. I I don’t wanna say the person arguing. I I had to come up with a better expression because I don’t want them to be our enemy. They’re just they wanna debate. So fine. Let’s debate. But we’ll go to the debate with facts and evidence. They’ll have their opinions. We got the evidence. Who will prevail? It’ll be the one with the evidence. So so when we get into dehumidification, we’re talking about, we’re gonna quote the the standard here. When a closure combination system is planned and mechanical dehumidification is not already in use, restore should determine an initial dehumidification capacity to establish humidity control for the targeted condition of the drying plan. And so we’re getting into this drying plan discussion. What’s the plan that you’re trying to do? Are you communicating what your plan is? And when we go forward a little bit further, dehumidification capacity may be modified at any point after setup based on psychrometric readings to achieve or maintain the targeted conditions in the drying plan. And what a lot of people misunderstand, and this comes from an insurance carrier standpoint, is that when we look at the simple calculation versus the detailed. And when I was with �Թϲ�����, we were getting asked tons and tons of questions about why are you using the wrong calculation? Simple dehumidification calculation should be used. Why are you using detailed? It’s the wrong one. It’s not part of the standard of care. These calculations are only the examples, and I want to explain to you why we chose the detailed dehumidification calculation because I like it for a starting point. So I’ll explain the difference to you guys here. You have the two choices. You could take the length, width, height, and come up with cubic feet and divide it by the dehumidifier style and the class factor. So in here, we could say, you know what? We’re gonna go and take fifty by twenty by ten feet. So a fifty foot long, twenty wide, ten high, ten thousand CFM. We’re gonna use an LGR and the class is four. So we’re gonna get our factor of forty. And that’ll tell you that you get two hundred and fifty pints. And what I did is I took the easiest, the class one and the class four, and then I ran it through the different scenarios. Now when you get into a detailed calculation, the reason I like this is that there’s a bunch of things that get considered. You look at your cubic foot and you start off with a base pint, which is a base factor of seventy, and you get a build out density. So based on how the the building is set up, whether it’s a doctor’s office with lots of rooms or a warehouse. You’re gonna be sitting with a different type of factor for build out density. We then looked at building construction. Are these materials easier to dry or harder to dry? We look at the class of water. What’s the class impact on the amount of dehumidification we get? Is the HVAC helping or hurting us, or is it not there? And for a lot of you, you’re not measuring it. A lot of times when at �Թϲ�����, it was like, hey. We don’t use HVAC. Can you take it out? Well, it’s a factor in whether it’s helping or hurting you, and you should be considering that it might be hurting you, and you need to actually consider that for, your calculation. Then we look at the weather impact. Is it is the building tight, moderate, or loose? So is an older building, newer building? Are doors being opened in a lot? And is the outside environment favorable, neutral, or unfavorable? And it gives you a multiplier. Now these multipliers go anywhere from, if we put our ten thousand cubic foot environment in here, we basically get a multiplier factor one point two to point six. And I’m gonna nerd out on this because I think this is important for you guys to understand. Building construction, harder to dry materials, you get another one and a half. And then we as we go through this, the different factors, if we take the the best to the worst, we basically are sitting here with a multiplier factor of six eight point six one. So eight point six one times the starting point or point four eight. That’s a massive range. And to give you an idea of how big of a range this is, this is what you could end up with on the same project depending on the factors that are in there. Sixty nine pints or twelve hundred and thirty one pints. If you use the simple calculation and you only looked at the simple calculation, you would only end up in this range, hundred to two hundred fifty. And so the reason why we use the detail is because it gives you more accuracy for your starting point. Now when we look at the starting point, if I have a detailed and this is where my range is on my detailed calculation, I can get to the exact same starting point as my simple calculation if the factors allow me to get there. But if I use the simple calculation, I can’t get to where the detailed calculation starts you. And I look at this only as a starting position to get you close. There’s a lot of flaws in this, but but I like this better than anything else I’ve seen. In here, when we start to look at what happens if you have a job, the the factors of the building, the weather, the materials, the type of building come in and say, hey. You know what? You need to start around seven hundred pints to get this this figured out. If that’s where you’re starting or that’s where your starting point could be, then I wanna look at it as a simple calculation comparison and say, well, what would happen? Now Ken and I, we debated this, earlier this morning because there’s a little bit of a a business side that I look at it from this perspective. So I’m gonna have Ken clear up the technical side after. But from a business side, if I started with a simple calculation, I started behind the eight ball already. I needed to start at seven hundred pints. I put my equipment in based on what the simple calculation said and I’m behind. From a business standpoint, I’m behind for three days. From a technical standpoint, I was behind the minute I decided to use the simple calculation. But in here, I might, after a few days, deal with the humidity and get myself in alignment. I’m gonna start to be in the right spot at some point down the road potentially. The problem is if you get paid for three days, if you’re on a program, you lost money on your first three days by not sizing your job right. Never mind you didn’t do the right thing for the building. You’re not even getting paid what you should have got paid in the first three days. If you’re only paid for three days or four days of drying equipment without further justification or you you can’t get it, you already got underpaid if you’re doing this. So when we roll out the detailed calculation, what happens is your first twenty four hours, you’re supposed to manage the spike. And, actually, I would suggest you you manage the spike before you leave the job. If your goal is to be under sixty percent relative humidity, if your goal is to get the conditions between seventy and ninety degrees Fahrenheit and under fifty percent relative humidity, you have to do that before you walk off the site. You don’t know if your equipment’s gonna overload the site with humidity or your dehumidifiers are working to remove it. So in your first twenty four hours, you might not do that, but you should. The next forty eight, you’ve set the job up for success. You’re doing technically the right thing for drying. You’re right for seventy two hours, and you’re right, you know, four, five, six days out. Now here’s the thing. From a business perspective, this will lead you to the most prop, profitability in your business because you’re getting paid for those three days where you’ve got the highest equipment inventory in the job. And then later on, you’re adjusting your equipment. You’re starting to reduce your the amount of equipment that’s on the job site. So that’s the little bit of a difference that Ken and I have whereas and, Ken, correct me if I’m wrong, but Ken’s like, technically, you’re screwed, when you use the simple calculation out of the gate. Well, I okay. Actually, this this whole subject, you explained that so well, Chris, and kudos on having a a good component like this in your presentation. Here’s my message to the students. First of all, it the dehumidifier formula is not a component of the standard of care. It’s not in the blue pages. They even took it out of the white pages. It’s not even in the in the guideline. That dehumidifier formula is so made up that they relegated it to an appendix because it’s not an element of the standard of care to be followed. So don’t let anybody shove it down your throat saying this is how much equipment you were supposed to have. I will also remind everybody that there’s not a single passage anywhere in the entire standard that says that the dehumidifier formula dries anything. It is not a drying time. It is not a component of a drying plan. It is not there’s no claim that it dries anything. The purpose of the dehumidifier formula that is relegated to the appendix has one sole purpose, and that is to manage the spike in humidity that is anticipated to happen the minute you turn on the air movers and cause some evaporation. You don’t wanna go over sixty percent, and that’s what that formula claims to accomplish. It’s a friendly bit of recommendation so that you don’t exceed sixty percent RH the minute you turn on the air movers. And once you’ve managed that anticipated spike in humidity, it is never to be looked at or spoken about again. Nothing. Seventy percent if you wish to use that number. So you don’t go over seventy. Now with that in mind, these people who want to argue, oh, you you didn’t have the right amount of dehumidification in there, and they’re referencing that formula, please remind them that that is not part of any drying plan. And you are not supposed to stick to that formula throughout the drying process because it’s not it has no claim to dry anything. It’s not to be used in that fashion, and that’s all my answer would be on that. Here here’s what Ken’s referring to. Appendix b is the example dehumidification formula. So in the standard, this is where you’ll find it at the far end of the book. The following formulas are provided as examples. They are not represented as a component of the preceding standard, meaning they don’t apply. As with any method for approximating minimum dehumidification capacity, verification of and adjustment through the use of appropriate instruments will be necessary. After the initial installation, appropriate adjustments, increasedecrease, reposition, and dehumidification capacity should be made based on the psychrometric readings in order to achieve or maintain the targeted conditions set in the drying plan. And in hydro, if you guys are using hydro, we set it as a temperature range, a relative humidity range, and a dew point differential. That seventy percent RH, you will be screwed if you go to figure out how the dew point differential is. It will trigger condensation alerts on all your walls. I have not found very many environments that you need to be over fifty. And when you get into colder environments, fifty percent relative humidity would be the lowest I would go because at night, when the walls cool off in the cooler temperatures of the evening when you’re not there, you’re getting very close to dew point differential or you’re very close to creating dew point. And and if you’re in that in �Թϲ����� so in �Թϲ�����, dew point differential is basically if you’re inside there, you don’t have the forces to create a good drying environment on that material. You’re not you’re not creating the forces to dry. So that dew point differential, one, prevents you from condensating, and two, it’s an alert that you your wall is not set up in a good condition. So that so the person that asked about the alerts, we set the alerts that you change whatever you want. If you said this environment needs eighty, you put it at eighty. If it’s ninety, great. If it’s too hot, we trigger it, and we tell you it’s too high, it’s too low, the RH is too high, or it’s too low. That’s what those alerts are there for. So that’s how you use it, and we use the alerts to keep you on track. We don’t use the calculation. Once you set your gear, you’re now in those drying tolerances. And Mike will go through that when you guys come here if you come on October for for the the hydro walkthrough, but that’s how it’s being used. And that’s just how it relates to the standard. Everything that you’re doing is about creating a great drying environment and managing that great drying environment. None of it has to do with taking a calculation and disagreeing. So if you got a reviewer that says you didn’t follow this, cool. That has nothing to do with your drying plan. That was a starting point and a starting point only. Here’s what I’d love to everybody to see on that slide if you don’t mind. No. Go back there, if you don’t mind. I can. Alright. Everybody take a look at the last two lines on the bottom of that quote, the yellow lines. Psychrometric readings in order to achieve or maintain the targeted conditions set in the, what, a drying plan? Have you ever seen a single file with a written drying plan ever? I haven’t seen it. And yet that expression drying plan appears a half dozen times in this current standard, and nobody has ever seen one. I just think that’s a real missing element in our industry. We talked about placing equipment, and that the goal is to get our velocity set up right for our air movers. When we start looking for reasons for placing dehumidifiers, it’s vapor pressure differentials and controlling the temperature and relative humidity goals, and they’re all connected. So we’re creating the the conditions for that. What we get into is these other things that the industry has deemed a specialty equipment. Lot of restores don’t have it in their inventory, but heaters. The reason you’re placing your heaters is you wanna reach a desired condition. So you wanna increase the BTUs. You wanna increase the drying energy inside of there, is increasing the temperature. And you’re trying to get it to that desired temperature, but you might also be controlling, the heat primary drying system if you’re if you’re running, an open drying system where you have the fortunate, opportunity of using dry air and bringing it in, and that’s the system you choose. We talk about air conditioners. There’s not a lot of manufacturers making these portable air conditioners. Phoenix used to make them. They don’t know. I think DryEase had them at one point, but they’re not really well used. But where would you put them? Well, you wanna decrease BTUs. You wanna decrease the temperature. And then what we’re doing is we might place a portable air conditioner in an unaffected area so we can keep those conditions in a normal environment. There’s we had a job where we cooked an old lady out. She her living environment was eighty five degrees or eighty six degrees, and she complained that it too hot for her when we took the measurements. Yeah. It was too hot. It was dangerously too hot for her. She didn’t have a system that could her body couldn’t handle the heat. We had to get her out of the building, and and we got her out immediately. But you run risks when you’re not managing those unaffected areas. And we our techs weren’t managing it. They didn’t even think about it. Now if you wanna decrease the desired temperature range, let’s say you have a bunch of equipment and you’re in Florida and your equipment’s starting to get you too high, you wanna decrease the temperature of your drying chamber. You would use an a portable air conditioner to to offset the BTUs being generated by your equipment. Hey, Chris. Really quickly, I was involved as an expert just last year on a job that was perf it was a small job. It was an apartment, where the the apartment had two windows, no sliding door, and no thermostat inside the apartment. It was a section eight housing, and the whole building was kept at one temperature for the occupants. They had no control over the temperature. Contractor went in there, small little water damage loss, put in their equipment. The occupant was sixty three years old, three hundred pounds, had a heart condition, and diabetes. And the job started on Wednesday, and on Saturday, she was found deceased on her bed. The contractor was sued for wrongful death, and it went on his insurance policy. And sure enough, the next of kin got money for the death of their mother, as a result. And it on the coroner’s report, it said, hyper hyperthermia, not hypothermia. That’s cold. Hyperthermia, she died due to heat. And, that’s the I felt bad for the contractor. You know? It could happen to any one of us. But this, subject of temperature, we need to pay attention to that because people can and do die from elevated temperature. Yeah. And that that job we had, it was an overlook. We were busy, and they just overlooked it. Didn’t even think twice. Didn’t do a proper risk assessment. You know, we got we got shoddy on our paperwork. We tightened up our paperwork after. Yeah. It happens, but you have to be aware of it. And that’s what you know, coming to these sessions is let’s let’s just talk about it, make sure we’re all aware. Particle count or sorry. Reason for using air scrubbers. You’re reducing the particulate in the air. There’s a lot of argument about why you would have an air scrubber on a category one loss. So you don’t need air scrubbers. Take your particle counter. Start taking a particle counter reading and and and identify what was the particle count when you got there. What is the particle count when you turned on your equipment, and how are you gonna mitigate that count? I guarantee you’re gonna see a spike in the particle count. And your goal, if you’re doing your your health and safety assessment, is to get a safe environment for workers and occupants. Hundred percent justified, but you need data. Having an opinion of I put four of these in because it needed it doesn’t fly these days. I put four of them in to reduce the particle level from here to here, absolutely justifiable. Chris, I will say that contractors must take humidity and temperature readings out of every LGR that they have on the job. And they need to do that to prove that the device was working. For those of us who are struggling getting the insurance company to pay for the use of your air filtration devices saying it wasn’t necessary, prove that it was with a laser particle counter. We do it as by practice with dehumidifiers. Let’s start doing that with air filtration devices. And here’s what I will tell everybody in this audience. If you think that your air filtration device is delivering the performance of HEPA, you might be blown away at how disappointed you’re gonna be when you use a laser particle counter and measure the quality of the air leaving your air filtration devices and checking to see if it actually does deliver HEPA rated performance. I think you might be very disappointed in what you see coming out of your machines. The point being, I think that we can validate payment for or the value of our air filtration devices on our losses by doing laser particle count readings, recording that, and using that in defense of our use of air filtration devices just like we do with dehumidifiers. Absolutely. Yeah. This is this is something that we absolutely need to be focused on as an industry. But what happened is I I got into this discussion, and it was probably about six years ago. I was working on a couple of cases where a couple files, sorry, where we had discussions about restorers not placing dehumidification equipment into a project, and insurance carrier was trying to hold them liable. And it led to a lot of discussion about how when do we not put our equipment into jobs, and when do you decide not to? And the number one area that’s not discussed a lot is the business decision that we we’re not obligated to restore anybody’s property. We don’t have to go in. Now that might change a little bit if you’re on a preferred program, but even on a preferred program, your reaction to a specific job may prevent you from actually doing the work. But this probably more applies to the independence that you make a business decision that you’re not gonna take the job. If you took all of an insurance company’s work, you probably made the business decision that you’re gonna take some jobs that you lose money on. As an independent operator, in a program, you are fully capable of making the decision whether you wanna do the job. The other reason you might not place equipment is it might be a technical reason. There might be a missing roof on there. There might be something that’s that’s holding you back. Someone could place a limitation onto you so that you’re you’re not able to perform in that capacity. And then there might be a health and safety issue of why you’re not doing it. Now if we were actually looking at these reasons and you start to look at those categories, you could break it down and say, well, if coverage is not confirmed, then I’m making a business decision whether I choose to put stuff on the job because if I don’t think the client is gonna pay, I’m not gonna take the risk, and that’s a fair decision. There’s nothing in the standard says you’re obligated to help everybody and anybody who called you. The contract’s not signed. Payment’s not assured. That’s a business decision. You are not obligated to help them. The insurance company may have an obligation to indemnify them, but that’s not your, as Ken said, you’re not tied into that that tripod, where you have to perform. They can call somebody else who’s willing to take that risk. When you get into a regulated material being present, that’s a health and safety concern. That’s also a technical concern. So you may not put your equipment in for there. Contamination, health and safety and technical. Lack of access. You might be placed on a limitation that someone will not give you access to the building. That’s a good reason to not put your equipment in. Stabilizing, that’s a technical reason is is there’s a contaminant, and, technically, you’re not gonna go in and perform a drying until you stabilize the environment. And then you have no chamber, no roofs, no windows. Technically, you’re gonna be doing nothing, so that’s a technical reason for us not to follow through. Dehumidifier readings. Dehumidifiers are starting to get smarter and smarter. I have no idea how to read this, guys. I will be honest. I was trained by Americans. I Ken does it. He’s a former Canadian. He knows how to convert it. Twenty one Celsius and twenty nine Celsius means nothing to me as a restorer. I, I learned the imperial system. I think it’s for drying, it’s easier. For my Canadian and Australian friends, some of you may or may not use a metric. It’s hard. I can’t do it. But these pieces of equipment have their onboard reading. So it’s it’s providing you some information that you can then start to use as part of your drawing. One of the things I would focus on though when you’re taking your readings is you’re not just relying on their system to give you a reading. You use your independent meter to validate what the system is telling you. Their their unit tells you it’s one thing. You put your your, thermal hygrometer, capture your own readings, record it. And one of the biggest things that you do when you’re taking this is to make sure you record the hours on the dehumidifier. This is kind of like looking at like an odometer on a car. Right? You’re almost all dehumidifiers today are gonna have a total hours meter on the unit, and they’re gonna have, like, a trip o meter of, the total hours for the job. If I’m you, I’m setting that that trip o meter on every job when we start and recording how long how many hours it is between readings. You have you get in these liability situations where the homeowners turn off the hottest piece of equipment and when they turn off your dehumidifier, your air movers loading moisture into the room or into the chamber and if it’s been if the dehumidifier if the dehumidifier has been turned off, that water vapor is going uncontrolled into the environment and you’re not having a mechanism to pull it out. If there’s secondary damages, you need to document that your hour meter didn’t line up between your inspection times. Ken, you got anything on that one? I I I know you’ve you’ve you’ve come across it. Yeah. So these dehumidifiers that are equipped with thermal hydrometers, here’s what my problem or challenge is with that is that each dehumidifier has a has, at least well, probably two thermal hygrometers inside them. Each of them has their own calibration. Each of them cannot be checked for calibration, although you can use on the modern dehumidifiers, you can use your thermal hygrometer and adjust the thermal hygrometer, on the, dehumidifier to match the performance of your thermal hygrometer. I’m just not a big fan of it because I’ll end up having multiple thermal hygrometers in a single chamber, and they can be not well, they’re not. They’re not calibrated to each other. And so, what I do is I will definitely reference them on the I take note of it. When I walk in and see the dehumidifiers, I look at the grain depression calculation and go like, oh, cool. That one’s putting out seventeen grain depression. But I use my handheld Visalia, is the brand that I choose to use, v as in Victor, a I, s as in Sam, a l a. Visala is the gold standard by which, we we we compare our thermal hygrometers against each other. It really is the gold standard. So that’s the thermal hygrometer I use, and that’s what I rely on when I’m doing my testing. I do wanna just quickly say that the the six channel laser particle counter for use in checking your, air filtration devices, The way I use that is you find out what’s in the center of the room. That way you know what’s going into the machine. You get your six channel laser particle counts, and then you compare it to what comes out of the filtered side of your air filtration device. And, technically, you’re supposed to have ninety nine point nine seven percent reduction in the particulate down to zero point three microns. That is HEPA rating. What we find is that frequently, even though you’re DOP tested, even if you’re DOP tested, that machine gets bumped around as it gets placed on the job and bumped around as it goes back to the shop. And that filter moves, and the seal that binds the the filter to the machine is it it goes out of whack, and stuff gets past it. So DOP testing might be good for that moment, but the minute you move it and torque the machine or twist it or anything, that seat between the filter and the machine can become compromised, and your performance might not be what you expect it to be. I find laser particle counters to be incredibly compelling. And, especially, I use it because we are not a regulated industry like asbestos, where you must have DOP tested filtration performance on your air filtration devices. We don’t need DOP in our industry. It’s not regulated. Laser particle counters, in my, opinion, are sufficient to determine or to establish that the machine is filtering sufficiently. So so we get we get into the, the five grains or less discussion or we don’t pay. And and Ken and I, over the years, have have have run into this and and have come up with this. Now I I didn’t blitz you through the math because I think it’s important to understand exactly what we’re talking about. Ken calls them grain counters. And if you give a a piece of equipment that’s you know, let’s say this dehumidifier is running three hundred CFM, and we’re pulling up four grains. And someone says, at under five grains, I’m not paying for it. What are they saying? And so what we’re looking at is that for every every pound of dry air, there’s seven thousand grains. And those grains weigh weigh really, really miniscule amounts, sixty four point seven nine milligrams. Now when we look at that, out of that seven thousand, we’re only pulling four grains. And so for someone to say, well, it’s it’s a small number. We don’t need to worry about it. Well, what are they talking about? We’re talking about four grains for every approximately fourteen cubic feet of dry air. So we’ve got fourteen cubic feet. Imagine fourteen one cubic foot boxes stacked in front of you. We run it through the machine and we pull out four little grains of water. Doesn’t seem like a lot. As we work through here and we get into it, we go, well, we took four grains per pound of dry air or four grains for every fourteen CFM. Our machine processes three hundred CFM. So our we’re pulling four grains at three hundred CFM. That’s eighty six grains per per minute, fifty one hundred grains per hour, and five hundred and twenty three grains per, per day. When you start to move that calculation from that little grain of four over the pints, it adds up. And every day we’re pulling sixteen point nine five pints, a really hard to get moisture that’s trapped inside the building materials or in the environment out of the air and into our, our collection. That looks like this. That’s a fair amount of water to be removing on a microscopic level. What happens if you ramp it up? Because if we’re only looking at grains, then someone’s forgot some very critical parts of the formula, which is how many CFM are we moving? And so if all of a sudden we’d ramp that up to ten thousand CFM, now we’re pulling out five hundred and sixty three pints out of the air every day. Five hundred and sixty three pints doesn’t look like this. It looks like this. So someone that comes in and says, well, that four grains isn’t isn’t working. They don’t know what they’re talking about. Now there is times when when we when we get into where you would consider maybe making an adjustment. And I’m gonna bring up Ken’s slide here where Ken’s take is is from a reviewer standpoint or a consultant standpoint on on on the discussion. And here, Ken, I’ll throw your points up is at five grains or less, the dehumidifier is not providing value and we’re not paying. Let me show you and what will happen, and you’re responsible for what happens. And I’ll document the limitation that you placed on me per the standard. And Ken also had these two other, quotes. If there’s more than one dehumidifier and you’re getting, five grains or less, you might consider removing the dehumidifier. Before we pull the dehumidifier, we’re gonna collect a mold sample and document all the conditions at the time that the equipment was pulled. Ken, can I get you explain those two to us? Yeah. Sure. So if you’ve got a room with three dehumidifiers in it and, let’s say one has got a four grain depression, the other one has seven grains, and the other one has ten grains. I would remove the dehumidifier with the four grain depression because it is removing the least amount of moisture. And I’d leave the other two behind because they can keep up with the rate of evaporation. I’m quite confident. The that’s that’s the the logic I have with the five grain depression, but I do want to say this. If you’ve got a chamber with only one dehumidifier in it and the dehumidifier is producing some really dry air, you’re down to the, you know, let’s say, maybe, well, I don’t know, thirty grains per pound in the room. It’s you know, you’re down to where the limits are for refrigerant technology. If you’re down to about thirty grains per pound, you might only have one grain depression, which means that for every fourteen cubic feet per, of air that goes through that machine, about the size of a four drawer filing cabinet, for every fourteen cubic feet that goes through your dehumidifier, it’s hanging on to one seven thousandth of a pound of water. Holy smokes. That’s not a lot of water, is it? That’s about the equivalent of one point three drips of water. That’s what one grain of water looks like, one point three drips from an eyedropper. That’s not a lot of water. So you’re gonna have a critic say, that’s not removing much water. You didn’t need to do that. Your job is now dry. The problem with that logic is if the materials are still wet and you took that dehumidifier out of the room that was only giving you one grain per pound depression, what’s gonna happen to the humidity in the room? Well, it’s gonna bounce back up to something elevated, something much more humid than what that dehumidifier produced. Right? And if that happens, what happens to the rate of evaporation from the material that you are drying? Well, it slows down or possibly even stops. And that’s the result of removing a dehumidifier before the materials are dry. We are not hired to dry air. We’re hired to produce an industrial drying chamber. And when we do that, then we are doing our job. So when somebody stands in the room and says, you’re I don’t want you to do it the right way. I want you to take that machine out because it’s not putting water in a bucket. You argue back, but I’m using it in order to produce an industrial drying condition that will be compromised if you make me take it out and the materials will not dry as planned. And that’s the argument back. Let’s go to the, the last one there. We talk about collecting a mold sample at the time it’s being pulled. This is that preemptive test. What I’ve seen contractors do is when they they’re forced to take that machine out, they will then, that day, go in there and pull some air samples. Pull some air samples inside, out, whatever. Prove the microbial condition that it is of that day. You then take that cassette, that air cassette, put it in the Ziploc baggie with the name of the customer, and you take that baggie and throw it in the corner of the office. If there’s ever, ever a complaint down the road, you got the samples that you can then send to the lab and say, analyze these. I gotta prove that at the time I was forced to take the equipment out of my this job, we had no environmental condition, no fungal condition that we needed to be worried about. And now that they took the equipment out, now I’ve got a mold condition, and I can produce prove that it wasn’t my activities that caused it. And that’s that’s why you would pull that sample. And it ties into the to the last section here, guys, which is inspecting or monitoring to to completion. The IICRC goes into this, and and this is why Ken uses the term inspections instead of monitoring as his his nomenclature is once the project has been controlled and the correction of down of the damage has begun, the restorer should continue gathering information through ongoing inspections and monitoring. Monitoring process can include, but is not limited, recording temperature, relative humidity readings, and other calculated psychometric values, checking the moisture levels and the moisture content materials, and updating the reports. Restore should record and monitor relevant moisture measurements daily preferably at the same time until drying goals have been achieved and documented. And the first of these inspections to monitor and make adjustments should be performed no later than the day following the the initiation of restorative drying. The frequency of subsequent monitoring should be daily until drying goals have been met, but may be adjusted by the agreed scope of work potential secondary damage job site accessibility or by agreement between the material interested parties. Such adjustments should be documented. This is key, guys. When when you start looking at the responsibility of the restorer, a lot of time programs will come in and say, well, we you you only inspect the beginning and and the last day, and it’s like, well, then how do we make adjustments? They’re talking about when you’re getting paid. They’re not necessarily talking about how you need to do the job. It gets mixed in when we talk pricing and the delivery of the standard. They’re not reading the standard to know what it is. For the most part, program rules and the standard don’t generally jive across the line. There’s misinterpretations that you see, and that can result in you picking up liability or the insurance company picking up liability on, unknown liability. They’re not predicting that that’s the liability they get. When we look at this, the information gathered during ongoing inspections and monitoring can lead the restorer to adjust the placement of equipment and modify the drying capacity. Where progress is not acceptable, the restorer should take corrective action. And when we start to look at this, when you produce a narrative report of the events that led up to your decisions, you basically are looking at section ten point nine, which is telling you that your documentation should tell a story of your job. Now you’re being held to this standard Whether you’re new, whether you’ve been doing this, whether you got two courses under your belt, or you’ve taken the entire, course load and continue to to update it, a carrier or a TPA telling you not to do something is not a defense. You will get slayed in court. You will get slayed in dispute resolution process if your answer is the adjuster told me or the TPA told me, and that’s why I did it. You’re the one that’s responsible to follow the standard. It’s your obligation to follow it. When you follow the standards, you also know how to follow a deviation in the standard, how to notify the homeowner or the property owner, and the deviation you’re gonna do, what the potential side effect of that deviation is, and why you’re doing it. Generally, just cost alone is not a good enough reason to deviate, but cost may factor in. So you may need to do something different to protect yourself or your business, and don’t fake your data. Alright. Question and answer time, Kristen. Hopefully, we wrapped that all up for you. You did. Thanks, Chris. You did it better than I would have done. I wouldn’t go that far. Okay. So let’s go through some of these questions. Is there a rule of thumb with temp, and humidity that you would say is the most likely to increase in cat faster, or is it exponential by temperature where higher is technically better? I I’m so sorry. Could you I I there was a word that didn’t sound right to me. Could you please repeat that question? This is an important one. It sounds like it’s a good question. Yeah. So is there a rule of thumb with temp and humidity that you would say is the most likely to increase in cap faster, or is it exponential by temperature where higher is better? Increase Encap faster. Is that what you said? Encap. Encaps. Oh, catastrophes. Yeah. Oh my goodness. Okay. I got it now. Okay. Is there a temperature range that’s ideal for catastrophe zones? Is that the question in short? Frozen. Yeah. So gosh. I don’t know if there is any ideal window for catastrophe, drying chambers. I I would suggest that you’d want to keep it temperate. You know? Keep it between, you know, reasonable living conditions, seventy to eighty five degrees maximum. That’s where my head is. Seventy to eighty five for drying strategies. And then, of course, you’re gonna wanna, manage the humidity levels and the wind velocity. And and, of course, your objective is to try and make sure that the materials remain warm. If you’ve got materials that are somehow becoming cold, that is your enemy. That is your enemy is cold materials. So if you live in a cold region of this planet and you’ve got wintertime work, man, I would I wouldn’t go anywhere without that laser thermometer because I’d be checking the temperature of the materials. If you’ve got a structure that’s not well insulated and it’s cold outside, your sheetrock might be remaining cold, and that will, possess a low vapor pressure within it. So I don’t care how dry you make the air. It’s going to probably be similar to the vapor pressure in that cold material, and drying doesn’t happen. So cold materials is an enemy to all drying strategies. So you should be aware of that. And and start paying less attention to the temperatures of the air and start paying more attention to the temperatures of the materials. The only time the temperature of the air becomes a, an element of focus is when I’m looking at the performance of my dehumidifiers. LGRs, they tend to lose performance when you start getting into really hot temperatures in the triple digits Fahrenheit. That’s when they start to diminish in their performance. And when you start to approach digital, triple digits with a desiccant, that’s when it starts to lose performance. It doesn’t stop its performance in either case, but it starts to slow it down. And then, of course, in really cold conditions, the challenge is if you’ve got cold conditions with a dehumidifier, your materials are probably cold. So if I can have hot materials and cold air, my gosh, I’m gonna be a drying god. But it’s very difficult to produce that condition. Just remember, it’s the temperature of materials and the dryness of the air. Stop focusing on just the air. Yeah. I misinterpreted. I thought it was what would be the ideal, temperature to to deal with a cat? And if it’s all frozen, you’ve got a lot of time to work with it. But that’s a Canadian deal. Yeah. It’s gonna stay frozen until spring. Keep it frozen. Yep. The next question, would there ever be an instance where you would not seal a heat vent into a Cat one dry chamber for supplemental heat? For instance, during a Michigan winter, returns were covered. Yeah. When you get into so this is a problem in Canada that we see a lot of it’s the same as Michigan. When you start doing a category one and you start blocking vents because you’re raising just particulate into the air, where’s your supplemental heat? Because you’re cutting off your heating vents. So that’s where when we look at the heaters and it’s been deemed them a specialty equipment, no. It’s a required piece of equipment for dealing with us isolating the HVAC system. It’s it’s not specialty. It’s just a piece of gear. Yeah. You you need to add supplemental heat in those situations. And when you get to category two, three, now you’re you’re running your chamber under negative pressure. You’re gonna have to ramp up your heat of that environment as well if you’re venting to the outside. So it’s a great question, but it it’s standard. It should be standard operating procedure that if you need to supplement heat in a cold environment, you have it available. What I love so much about these two questions is you’re talking more about the strategy of drying and less about the brainless dehumidifier formula and air mover formula that we’ve been taught through some education programs. That is not an engineer that is not an engineered drying plan. And I I love the fact that you’re starting to look that this audience is starting to look at the structure’s needs more than just these arbitrary formulas that people blindly follow. We’re starting to think about the needs of the structure, and I think that’s a really important transition to finding competent restoration. Yeah. I agree. These questions coming in have been fantastic. Maybe we’ll do one more since we are at time. So this question this individual does a lot of dryouts in Florida with mold already present. How would you deal with that in the state of Florida where you must have a mold inspection and testing done before you can remove the mold? The longer it sits wet, the more chances of mold spreading. Oh, man. Okay. Yeah. So, what do I say about Florida? They’ve got rules that you find that aren’t really applicable anywhere else on on the planet, and it is difficult. So if you’ve got a a structure in, let’s say, South Florida that has been hit with some hurricanes in the last two years and then encountered insurance carriers who almost as practice denied claims, thus putting it into a waiting game. Well, what do you think happens on these houses when they put get them put in into a waiting game? They go moldy. So when they finally get it approved, it’s a moldy nightmare, the insurance carrier says, we got a three thousand dollar cap on mold. Here’s your three grand. You now see how that as a consumer, your head would explode going, the mold is the result of the insurance company’s delay. So here we are today with all of these structures of which there are thousands in Florida right now because they were denied for a variety of reasons, and the homeowners have all these moldy houses going, what do we do now? Because we have to get it fixed. I got no good answer on where the money comes from. That’s the short answer. And so I I don’t have any advice for you other than be careful because even with they say that the what are they that’s that lion go and say the best intentions is a road leading to something disappointment or something like that. The point is that you might wanna try and help them and be a nice guy. I’m speaking from experience. Every time you try and do that for somebody that’s got a problem, you become the crutch that has to pay for every problem related to that job from that day forward. And so you’re just trying to help them. Come on. I’ll do something, you know, for a discount or whatever, and then they get a health consequence. My son, Billy, has an eye infection, and I think it’s because you’d of you the mold work you did. And you say, yeah. But I did it for only ten percent of what the I should have charged. Yep. But now you gotta guarantee the work. Oh, for crying out loud. So I don’t have a good answer for that scenario, but it is a plague in Florida right now. Tons of structures, not restored, and money is promised from nowhere. And these consumers in Florida are well, frankly, they’re leaving the state. They’re just, they’re giving the house back to the bank is what I’m hearing, and they’re leaving the state, which means that there’s these banks that have houses that they don’t want, you know, know what to do with. So I’m kind of looking, trying to find these distressed sales, and I will get them, fix it up, and flip them. You know? That’s kinda where we are. What a crazy question, man. I’m sorry. That was a very local regional condition that we’re faced with here, and, that’s not that’s not industry wide. It’s just a Floridian problem. I think that’s why they asked it, Ken, just specifically for you. Yeah. Well, I hope to meet you all one day. If you’re if you’re in the Florida area, you know, you got my phone number. You got my email right there on the screen. Send me an email, and we’ll get in touch, and we’ll see how we can collaborate. So, I think since it’s four zero four, if anyone does need to sign off, you’re more than welcome to. We wanna thank you so much for joining us. Chris and Ken have graciously agreed to stay just a few minutes longer to answer a few more questions, so you’re more than welcome to stay on with us as well. But, yeah, thank you so much. Have a great day, and, I guess we’ll chat soon. Thank you everyone for being here. Yeah. Thank you, guys. Alright, Crystal. What do got for us? Alright. Let’s get into the meat and potatoes here. So why do hammer probes register a higher moisture content than a protometer pin? And maybe I’m mispronouncing that. I apologize. No. We need more clarity on that. The is that the the hammer probe connected to the protimeter, you’re saying that that will give you a different reading in the same holes that you would use the two pins. So you take the hammer probe out, put the pins in there, and you got two different readings? No. Let’s assume that’s what they’re saying. Okay? If that’s the case That seems that seems weird. Let’s assume that’s not what they’re saying. Well, if that’s what they’re saying, it shouldn’t do that. I’m just saying that shouldn’t do that. So, because it’s the same circuit board and same connection inside the meter. So I would suggest there is something weird going on. So if if you answer it that way, then then there may be a fault with the meter. If you put a hammer probe into the wood and you go deeper than the the pins, you may have less moisture at the surface than you do in the core of the wood. That is two different ways of answering, Ken. So I I would agree with the answer. Chris. I know what’s going on. So the two pins on the hammer probe have an insulated area on the sides of the shaft of the pins. Only the tips of the pins are exposed metal. So when you use the hammer probe going into the wood, you’re only getting the reading from the center of the wood. Now on your two pins on the outside of the meter, it does not have that insulation. So when you put the pins into the wood, it’s going to find the the the connection that has got the least resistance. It’s gonna report a higher, typically a higher moisture content value than your hammer probe would be. It’s because of the insulation on the side of the pins on the hammer probe, and only the tips are exposed. I think that is the answer. That’s what’s going on. Next question. Would you would the use of a thermal camera help with documenting the drying process and validating the progress? I have a thought. You go, Chris. I like it. I like the visual. If you can use it to help provide the visual but not use it as the only means of of walking the site, absolutely. I think it it it provides context. The one problem with it or or the one challenge that can be is that depending on your settings or your familiarity with it, you may have troubles properly showing the water. If you don’t use it properly, it will look dry. It will look you won’t see the thermal, differences. And so you start documenting it. That’s the only downside is that when you get further into the into the project, it may not be as accurate visually as your as your moisture meters are picking up. But as a as a general tool, I like it when you do commercial. I like walking the site and looking for areas, to potentially investigate with a moisture meter. Yeah. And that’s how that technology should be used. Now that being said, I wanna remind everybody with our thermal imaging cameras. If you’re using the thermal imaging cameras on a daily basis to observe visually the the data that is being reported back with your thermal imaging camera, I want everybody to understand what I’m about to say. If it what you are seeing with your thermal imaging camera is the result of evaporative cooling, that when there’s an evaporating surface, the surface shall be cooler than the surrounding area, and that’s what your thermal imaging camera shows. So I have gotten into some pretty intense discussions with people who want to argue. Look at my thermal imaging camera. Look at all the cold materials. This is horrible. Your job is lousy. I’m going, no. I am seeing the effects of evaporative cooling. I am thrilled with these cold surfaces. It proves that I am evaporating water from that material. It is the best message of the day. I am just ecstatic that I got cold surfaces all over the place here because drying is happening. If everything was the same temperature, no evaporation is happening. No drying is happening. So remember, the cold surfaces are the clue that it’s drying, and you should be happy with that, not that everything is the same temperature. And that that’s an important understanding with thermal imaging technology. Awesome. Thanks, Ken. So we did have a couple questions come in about, roof leak water and the categorization. So if water passed through the building material, the insulation, the drywall, the framing, and it’s sitting wet for more than seventy two hours, what would we categorize that as? Welcome to our webinar today. We’ll start over. Okay. Well, so here’s the deal. Seventy two hours is meaningless. Okay? It is not a threshold that’s published in the standard. We’ve abandoned it. It’s not in any exam. It is gone. Stop thinking about forty eight hours or seventy two hours. I don’t care. Get your focus off of time and start focusing on the temperature of materials. Start thinking like an incubator rather than a stopwatch. Okay? And that is that’s the main point. The next thing I want you to say I wanna say is this. There is another bizarre I guess it’s an idea that if the water flows through a building ex assembly, it instantly changes category. That is a ridiculous idea, and it has no merit whatsoever. There is nothing about the passage of water through a building material that makes it magically change category. And so that it has nothing to do with the criteria with that we use in competently establishing the category of water. Stop thinking about it going through building materials. It’s silly. And, Ken Ken, I think that comes from that that comes from the the I think it it comes from the camp of would you drink it? And that’s that’s not part of the definition of the standard, but that’s the that’s the social media version of is it drinkable water? Would you drink it? If you wouldn’t drink it, then it’s not category one. It’s not the same as the source, and that’s that’s the wrong perspective of looking at it. This has nothing to do with its potability. It’s not about being potable or not. It’s about it meeting the criteria of being category one, which is defined. And it that’s what needs to be truly measured. As far as the other six criteria or five criteria that are listed in the standard, not one of those criteria has anything to do with to do with the subject of having passed through a building assembly. If it comes into contact with a known contaminant, then, yes, that is the the measure, but not because of the style or the of the assembly in the building. It has nothing to do with the subject. I think maybe we’ll do one more question. K. Okay. So this is a bit of a a long one, so bear with me. So dew point differential is super useful, but we’ve had a lot of specific success with evaporative potential, which uses a calculation from the vapor pressure and the dew point. How would you recommend using vapor differential versus vapor pressure or dew point differential, and would you be willing to include an evaporative potential specific tracker in the moisture point reading section? Okay. So I’m I’m assuming this is an �Թϲ����� specific question. So, we went with the dew point differential from a from the perspective of we could figure out the dew point of the environment, and we could allow you to adjust it. So in in southern climates, maybe ten degrees Fahrenheit is a is a satisfactory dew point differential. In colder climates, you might be fifteen or twenty, because of the radical change that you could get in your temperature in the evening or the temperature the external temperature that could impact your in interior. Other evaporation potential. So when you start getting into people’s proprietary knowledge at �Թϲ�����, we didn’t take a position of incorporating that unless someone unless there was one momentum where a lot of people were using it. And two, you know, we were approached. So in in this case, we didn’t have anything else that we put into the system. That’s sort of an encircle position on on how we went about designing the software. There would be nothing that would stop you from putting it in. �Թϲ����� could put it in if the demand was there or the model, you know, there was there was the right turn on that we wanna use this type of feature. It just the time, �Թϲ����� Hydro never got developed to that point. So that would be the reason why it’s not there. Don’t know if that answer that specific question, but it’s, it’d be the same as any of the other proprietary thoughts out there. I’m gonna make a comment about this dew point differential. They use that expression. And just so the audience understands what we’re talking about here, dew point differential is the material’s proximity to the dew point temperature. So we know that if the sheetrock is colder than the dew point temperature of the air, the sheetrock’s gonna start condensing water. And so there’s been certain individuals in our industry that has tried to say, look. The farther away your material temperatures are from the dew point temperature of the air, the better and more stronger your drying chamber is. I will tell you that we don’t have time to to prove this right now, but it’s very easy to prove when you look at the drying chart or sorry, the psychometric chart, is that proximity to dew point has nothing to do with drawing forces. All it is is a management of risk. And to be honest with you, that measure comes from a known industry. The the industry is called the National Association of Corrosion Engineers. Nace is the name of the organization, and they have they use delta dew point or dew point differentials or proximity to dew point temperature a lot on the subject of flash rust or corrosion. If you’ve got a factory and you want, to prevent flash rust from forming on all the iron machines that are in the warehouse, then what you do here’s your objective. Keep make sure that the the the big machines, the temperature of the metal is more than ten degrees Fahrenheit away from the dew point temperature of the air in which it sits. You wanna make sure that you’re at least ten degrees away from the the temperature at which the metal will start to condense water. Flash rust will happen even though there’s no condensation forming on the surf on the surface of the machine. You just have to exceed here’s a magic number that they publish, sixty percent relative humidity. If your chamber is is temperate, let’s say, seventy degrees, and, you’ve got sixty percent relative humidity, you’re in the zone that can that can produce flash rust. Just because the machine exists in a chamber that exceeds sixty percent RH, it’ll start to rust. And, that’s one of the measures that we use when we’re doing industrial work. Yeah. And to Ken’s point, our dew point differential so there are some instructors that were teaching it. We weren’t using it as a drawing metric. We were using it as a limit as a a risk limitation or risk management tool within �Թϲ����� that we knew that condensation well, when you hit condensation, you’re not drying. We wanted to be further away from that condensation zone. And when you not using it to the Ken’s point where the further away you get from dew point, the better your drying environment. It was that once you exceeded fifteen degrees, you were back into what we considered a safer environment. And what we had found is that technicians were drying, and they were really close to dew point on their surface temperatures, which meant that they were having really difficult projects getting getting those those materials dry. So we put it in as an alert that would allow you to make changes to the chamber. It would justify the changes to the chamber so that you could get the drying forces aligned, but it was a it was a risk management tool when we put it in. And I we unfortunately, I think when we when we did it, we called it dew point differential, and it was only after it was put in that that the realization was that some other instructors were teaching dew point differential as a drying metric. We didn’t use it for that purpose. Good question, though. Yeah. That’s great. So I just I wanna thank you, Chris and Ken, for joining us today and sharing your knowledge with us. We really appreciate it, But we we wish you all well, and and thank you so much again for joining us. Thanks for sticking around till the end, guys. It was a pleasure. Take care, everyone.

Hi, everyone. Welcome to profitability masterclass. Thank you so much for joining us. I’m Kristen Fernandez, the, event specialist here at �Թϲ�����. This webinar is eligible three IACRC continuing education credits. So with that, I will bring Chris in, and we’ll get started. Morning, guys. Afternoon for some of you. This is awesome. This is gonna be a, a great event. I will look forward to this one. This one is a little bit of a a special one for me. It’s the first one we ever did in �Թϲ�����, but there was a, it it talks to profitability and the pains that you come through, and so we’re gonna we’re gonna cover off a lot of things today. We’re gonna change it up a little bit. So if you’ve been to these ones in the past few years, normally, we go in and we talk about volume and sort of a little bit of the higher level. Last year, I got a bunch of emails that said, hey. This works in an office. So, like like, it was a little bit of a a discussion about, like, that it’s great in theory, but it doesn’t come from the field. So I’m actually gonna show you how I discovered this. Because if you don’t know the backstory of it, you probably won’t understand the pain that it took to figure this out. So I’m gonna share that with you to start. If you have your technicians here who are in out of the field, we’re talking to them too because a lot of it applies to the overall business. So while this is, yes, focused on profitability and the the owner structure, it applies to those that are in the field, doing the day to day and how dollars are put into the business. So this will explain a little bit about that. Then we get into talking about costs and how we manage costs and how I looked at costs a little bit differently than others, and I just share a different perspective there. The dollars that are lost, the things that you can’t see in your accounting sheets. And, I’ll show you how I found that and how it basically changed the way I looked at the business and where we found a lot of missing dollars inside the business. Then we go through profit and how it impacts your growth, and then why sometimes you freeze up when you’re growing. It seems like it gets harder. We’re gonna cover that off. We’ll talk about scaling your business. So taking everything in the lost cost and profit section and putting it into why it and how it’ll affect your business when you go to scale. And then I share just the last part, which is, it is it’s my personal shot back at those that said I built this in an office. I’ll show you some paperwork that I had built and how I came out to where I got to. So, anyway, it’s it’s gonna be a fun one. We got question and answer periods in along the way, and and then we’re gonna be taking those two breaks. So it’s kind of like the fifty minute mark or the hour mark. I don’t know where it actually drops. We’ll take a break, then we’ll take another break, and then we’ll go and finish up the lessons, and we’ll jump into the q and a. And then we’ll just hang out together, and you guys can just rattle it around. Get involved. If your team’s sitting there, have them participate. We got some polls so they’re it’s all anonymous. Anything that we do in our polls, no one can see your answer. Everything just shows up as a generic response, like cumulative response. So, be honest. There’s some polls for the technicians and adjusters and TPAs that that happen to be here, and then the rest of them are for the owners, and so we can have a real discussion. I use that because at the end, when we go into the scaling part, we’re gonna have to look at the calculator and how those changes impact your business and what it means to your business. And then you guys got sent out a calculator that that I just use for just demonstration purposes so that you can understand how those small changes have a big effect on your bottom line. Let’s get started. So, let’s keep going. We got polls. We we wanna start off. This year, we’re starting off with a series of polls just so we know who you are and who’s here. And there’s a number of them there. How many people are logging in with you? It’s just me, two to five, five to ten. We have a viewing party here. Sometimes you guys are doing those big parties where you bring people in from the field. Those are awesome. So that pulls up. Beautiful. And then Looking good. You got the next one. What industry are you in? Restoration, insurance, independent, TPA, or other? So if you’re other, there’s a few questions where I ask about the restoration contractor profit. Don’t answer that. If you’re not a restorer working in the business, don’t answer that question. This is just for the restorers who are there. Usually, we get some insurance and TPAs right now. I’m not seeing any on here. We’ll have a different conversation. No. We won’t. The best, what best describes your company? It’s a national corporate owned, a regional, a franchise, or independent. And I’m gonna talk about how that, how the different models are impacted on the cost side. And when you factor in some royalties or, like, head office payments that go back to the mothership, how you need to look at that when you’re comparing that to an independent. What service area what area do you service? Bar damage, reconstruction, mold, contents, other. Probably one should have said all of the above, but that’s okay. Other is interesting. Which country do you reside in? Canada, US, Australia, or other? We got one Aussie, one other. That’s awesome. I don’t know where you’re coming from. Put it in the chat if you’re from somewhere exotic, like New Zealand. We got United Kingdom. No one from there. And then the last one is, what percentage of your jobs are sourced from TPAs? And, and we’ll get that in there. Of course, you are, Ron. You’re like a different country out on the East Coast. Alright. Let’s, let’s see. We got still still answers pouring in, but I think we got good enough. Awesome. Okay. So a lot of you guys answered. A lot of you are just watching alone. Some of you are in, like, small parties, and then a couple of you are doing five to ten, which is awesome. You got your team in. So I’m gonna make sure we talk to that and then get involved. Just, like, participate in the chat or or ask questions. Kristen’s monitoring it. Law restoration, we have no insurance, no independence, no TPA. So that’s that’s a different discussion today than we’ve had in the past. And then a lot of franchise and independently owned, which is is awesome. We’ve got a whole mix. So I’ll explain some of my experience with those and why you should look at it from a certain perspective. We got water damage, recon, mold, contents, other. Cool. And there we go. Alright. In two thousand five, I started I I started actually, I was hired to do fraud investigation, but I actually started in in underwriting. So, literally, they said underwriting investigations, which all it meant is I was out looking at what type of floor someone had. Is it plaster or drywall? Is it carpet or hardwood? And I would report back, is there any knob in tube? Like, that was my job. And then I got before that, I was a sheriff, so I got pulled in as a fraud investigator, and I was on the insurance side. And I took a course, loved the water damage, and one of my contractors said, hey. We’re looking for a marketing person. And I, like, kind of arrogantly said, hey. If you have something national, call me, and they literally did. So they called me. I had Western Region, and I started to run the West as a as a business development manager. Now what happened from there is I had a a company I was set to go sell franchises in the West, and I met this company, met two guys. I really liked them. And they asked if I wanted to become a partner in their business, and the reason we couldn’t make them a franchise is they didn’t make enough money to pay the royalty. So we couldn’t make them a franchise, but then they were like, hey. Do you wanna come partner with us and help us get profitable? I’m like, yeah. I I’m doing some stuff you’re not doing. So I ended up going and working and moving to Vancouver from Winnipeg to run this large independent. And what was interesting is they had a lot of sales, but they didn’t have a lot of profit. And so I was like, okay. That’s interesting. And in the same time, for the same year, I went to work for another company the following year. The same year, another company had massive massive revenue. So while I was there, these guys had this, like, low dollar, and this company had lost. So they the company I went to work with, the small independent, had made a little bit of money, whereas the big national had lost money. And the year I went in there, I took the the company, and then the next year when I went to the other one, my graphs are off. So I’m I’m gonna tell the story this way. I’m gonna just run it here. So I worked with a small independent, and I hired a a high performance team, and we turned it around, and we brought our margins up. And at the same time when I went to interview, the company that had huge amount of revenue but was losing money couldn’t believe that I actually turned a profit. Because they’re like, there’s no way you can turn a profit in this market, and I did. They had hunted me. I ended up in that organization, and I did the same thing with them. We turned a profit the following year even on declining sales. So that was my start of figuring it out. And the way we did it is we smashed every system. We went in and looked at how our technicians ran. We put our technicians in the training. We did everything you had to do to make them amazing. And so I had this little bit of experience, and I started this company called Restimate. And it was my Xactimate training and field scoping. And in two thousand eleven, I was Canada’s only independent Xactimate trainer, meaning I worked for no company. There was others that worked for Xactware, but I didn’t work for anyone. I worked for myself, and all I did was share what I had learned. What was funny is my friends are like, hey. You you you’re doing something no one else is doing, and I got cocky, and I’m like, oh, you know what? Let’s start that business. And when they say you fake it till you make it, it was kind of that looking back because I didn’t really know a lot, but I knew a few things about a few things like Xactimate. I had a background in marketing and pricing, and so it all made sense to me. But if you wanna see a fake smile, like, right there, that’s that’s the face of, like, that guy, I would not trust him with my business. But I went across the country. I trained restorers. I trained insurance companies. I wrote insurance company protocols. It was a good time. I met this gentleman, Ken Tucker at DKI. He was with business mentors when I first met him in two thousand seven, but then I met him in two thousand eleven in a bar at the exact where conference. And I’ll I’ll tell you Ken’s about as honest as he get, and he’s straightforward. And he’s like, you know what? Your your language is wrong. The way you’re talking to people is just wrong. You you talk like a manager. You would never say those things. Like, I would never cut my bill. I would never reduce an invoice. He’s like, you wouldn’t say that if you were an owner. And and he’s like, listen. You’re good. And I think after he said you’re good, I literally didn’t pay attention to anything else. He’s I’m like, oh, he said it was good. But what he was saying is you you need to have that that real life pressure of the restoration company before you understand restoration. And so a little while longer, I got lucky, and I had about three months later, a customer of mine said, hey. We need to bring you in for some estimating training. I did it. Then they’re like, hey. Would you do some general consulting for us on it? Yeah. I can do that. And a few months later, I was probably I was a partner in the business. So after that, we had some big years. We went in. We did, they had no money. They made no money on about a million dollars the first year. Then I made ten percent with them, then we did eighteen percent. And I’m like, man, this is amazing. Things are going well. At the same time, I was doing the consulting stuff. Now what’s interesting in Canada, and so for those of you from the States, Canada had, like, an RIA sort of lookalike organization. It was called the RCOC. So it was the biggest banners in the industry. And remember, I’m a guy who ran an office in Vancouver. I wasn’t anybody to anybody. I was friends with this guy, Ken Tucker, who was the president of DKI. And the RIA and the RCOC were kind of working on this program and, like, fixed the price so that it wouldn’t be so broken because at the time, Symbility and Exact were it was almost like a race to the bottom. Whoever offered the lowest price, the insurance carriers would pick that program. And all of a sudden, I’m working with the RCOC with one of the presidents, and he’s like, do you think you could figure this out? I’m like, I think I could figure it out. So they hired this big company, Deloitte. Deloitte came in. It’s a big accounting firm for those of you that don’t know, but Deloitte was writing the white paper on everything broken with the pricing systems in Canada. And they asked this one one man band to come in and be the consultant to Deloitte to help them figure it out. And so I put my entire business on hold for three or four months to figure out the pricing. Now what was interesting is Ken’s like, hey. You agreed to be the consultant. Right? And I’m like, yep. And he’s like, you realize that if you **** this up, your business is ruined, so you better make this good. I’m like, oh, yeah. Yep. We’re gonna do it because I’ve already said yes. He’s like, alright. I think you got it. And we spent time breaking every price list down across Canada. We went deep into the price list, and then I fed that information to Deloitte, and Deloitte created this white paper for the RCOC. And so I got all those CEOs on speed dial, and all of a sudden, I was, like, feeling amazing. At the same time, when you do that and you neglect your business, things go sideways. So my partner had health problems. He had a a heart valve, and he was the micromanager in the business. And I when I was brought in, I was brought in as a consultant. He got sick, and I had to then run the day to day operations. But I wasn’t running the day to day operations. I was working with the RCOC and consulting and training, and so I let the business slide. I had a rookie management team that we put in place, and I felt like a loser because our business went from crushing it. Our sales were going up, but all of sudden, we lost money. And if you look at that in the perspective of, like, how much did you lose, that was a four hundred plus thousand dollar swing. So, like, literally, I was sleeping at the wheel. And our management team was doing well, but, unfortunately, our owner, my partner, passed away. And so when he passed away, I the whole company got paralyzed by sadness. The leader who was me wasn’t there, and the company went through a little bit of a hard time. When we got to the end of that, we ended up coming out and we grew our sales. Now we also had our primary client fire us because they had a personal grievance with me, and they suspended us for a month that lasted nine months. I lost fifty percent of our revenue. That year, my team stepped up, and we go ahead and found new revenue, and we grew. So even against that perfect storm, we still came out and did pretty well, but I was left with a company. I was left with my partner’s wife and his partner, and it wasn’t the reason I was in the business. So then what we did is we started looking back and saying what happened. Well, a perfect storm happened when we were actually successful, and it happened when things were going good. And so what we did is we were like, hey. We’re gonna continue to do good. Let’s go build the company because we’re gonna ramp up our sales, and we’re gonna crush it. And we did even though we lost a big client. My training business blew up, and I was on the road a ton. So I wasn’t really paying attention to the company. And then when my partner passed away, I already had a team that was trained, and I had technicians that were trained. But in the fourth year, we didn’t make any money. We’d, like, literally came back to break even. And I had everybody in training, and I was getting a ton of training at the time. And it led me to this question. It’s like, why is restoration harder to run when you have more experience? And it’s a phenomenon that happens across the industry. So if you talk to anyone, you’re like, man, I get more experience, and it gets harder to run. Three, two months ago, I was on a call with a claims manager, and I’m like he’s like, hey. Why are why is this harder to s like, review estimates today? I’m like, it’s an interesting question. Do you have less experience now than you did twenty years ago? And he started laughing. He’s like, no. It should be easier. It gets harder because it gets more complex. And so it’s worth asking if I was mad or I was sad or scared, what’s the question, and why are you doing it? Like, I was asking those questions because I was like, why am I feeling this this incompetence when on one side of my life, I’m crushing it and working with these CEOs, and they’re finding success. And on my personal life, I’m getting crushed. So if your technicians, like, on this call, if you go to training, it’s not easy to come back and put the training into your business. And so how are you feeling with that? Right? If you go in and head out to a training class, when you come back, do you feel like you can actually put that into your business? So my teams couldn’t, and I couldn’t. So I learned all this technical training, and it didn’t work, which then led me to ask this question. What if everything I was taught about restoration was wrong? And it’s kind of a question that we we ask because I’m like, what like, I’m learning this. It’s not working. Every time I send somebody out, they come back, and it seems like we we make less money even though technically we’re more proficient. When I asked that question, I dismantled the entire business. And now I lost my partner, so I dismantled the business. And when I dismantled the business, I found something that was pretty shocking. It was that and I didn’t think it was true because I’m like, I can’t be the only one that that’s thinking this. But I tested my theory, and I rebuilt the whole business going, I think everything I learned was wrong, and it doesn’t fit the business of today. And when we rebuilt the business, we had a wicked crush year. We had, like, a thirty one percent EBITDA. So it worked out to, like, a net profit of, like, twenty seven percent. And what happened there is we, like, retooled the company. I put high performing staff in place. If I didn’t have them, I had good people that worked for us, and and then almost every company we had success, we had good people. So we retrained them. We rebuilt our systems. We went profit centric. Every file had to have a a gross profit percentage beside it, and we reviewed every file. And then we got ready for big things, and and it hit. Then I was like, okay. I I got couldn’t sell that business because we had some bad years, and so you have to sell on a three year average. So it was just better for us to close it down, and I didn’t wanna run. My partner’s wife didn’t wanna run it, so we just closed it. But then a a few years later, I tried chucking a truck with a friend because I was like, hey. You know what? Like, people say it’s pretty fun. We built a chucking a truck business, and we crushed our profits there. But you would do that because you don’t have the overheads of a real restoration company. So we had fun with that, but this is a model you can scale, but it is a model that was just fun to try. That’s the smile of authenticity because I was actually having fun again. And I reinvented how we worked in the field, and it worked at all levels. Well, that transitioned to me coming over to �Թϲ�����. And then what I knew is that if I could take some of those systems and put them in the software, I could build the software so I could help a bunch of my friends, and we could still continue to to build these businesses out. So, like, the first sales in �Թϲ����� were me calling up friends going, hey. Try this out because I wanna try this. And so we were building software, and �Թϲ����� was moving forward, and we were like, hey. How can we change the way we build software? How can we change the way we we we think about restoration? And so today, what I’m gonna do is I’m gonna share you share with you how we went through those different transitions and where those those breakpoints happened in my business that led to those bad years and the ones that led to the good years. And then today, you know, I’m not gonna focus on volume because it’s just an amplification. If you’re doing well, you’re gonna do better. If you’re doing poorly, you’re gonna do worse. And so volume is just a piece of the action, but you really need to look at that lost cost and profit. And so when we do that, clarity comes from the experience of focusing on those. So that’s how we got here. I had there’s a saying, I think it’s, I’ve forgotten more than I’ve learned, or I’ve learned more than I’ve forgotten one of those ones. I forgot more than I learned. So in two thousand twelve and fifteen, you went back to that business where I was on an up streak, but then I I dipped. I wish I would have looked at it because in university ninety seven or ninety eight, a long time ago, I had a professor who was, like, all gung ho on on these on profitability. And and and the profitability, you can’t see. The invisible profitability. And he talked about it, and then I think it was Peter Drucker, or might be a different author, that he was really focused on. And what we did is we looked at everything in the business as a cost. So if you were in a business and if you’re a technician in the business, but you see all these big numbers on the estimates, but really, you’re only keeping, you know, three, five, ten percent of that estimate. There’s lost dollars, and those are the dollars that you can’t see no accountant can see. So if you’re a private equity company, you have no idea if this if this money left the company. There’s no way for you to see it. And those are the dollars of missed opportunity. Effectively, mismanagement and missed opportunity. And then you have the profit. And that’s the things that you can see as a result of all the good behaviors that help you with your managing your loss and your cost dollars. Then you get your profit. And profit is kind of a scary word for some people, but it’s it’s one of those that without it, you die. Your business crumples up if you don’t have profit. So profit, if you look at it as, like, greed is one side, and that’s how people look at it if you’re not an an owner. And if you are an owner and you have that greed mentality where it’s like, hey. It’s kind of greedy to to charge. Think of it as survival. It’s the survival of your business. It’s future, the existence of your business. And and if you start thinking of it that way, it’s like, okay. Well, if I wanna give employees bonuses, I need profit. If I wanna buy new trucks in about four years, I got I need profit to be able to afford it. If we wanna take my family on vacation because I live in my business, I I need profit to do it. So you can’t you look at it as a as a dirty word. It’s literally how your business survives. So look at survival and how how much survival do you want. If you change your mindset, it’s a little bit of a better, a better perspective when you go forward. Let’s this one’s for those in those little watch parties. If you’re not a restore or a restorer, here’s what here’s what you’re gonna do. The first question for you is for technicians, TPAs, and others who do not own a restoration company and are not involved in the financials, how much do you think a restoration company makes? And restoration contractors lose money. They make zero to four percent, five to ten percent, ten to twenty percent, or twenty or more percent. And so if you don’t know, no coaching owners, like, if these people like, let them let them guess because this is a normal phenomenon that happens when you’re when you’re when you have restoration companies that are sorry. You have employees or you have adjusters. Like, we had adjusters, TPAs. I’d I’d wanna see their answers here because you would have a bunch of information coming in that sort of distorts the perspective of what a business is. And we’ve got a bunch in here. We got oh, there’s a lot lot of people that aren’t involved in the financials. A lot more survey than I was expecting. So I’ll just let it keep going because the answers are are coming in, and this is pretty interesting. And thank you for being honest, by the way. I I do appreciate that. Alright. Give it two more seconds. Three two, one, and we got it’s still flying in. There’s, like, a lot of non owners on there. This is or or tied to the financials, so this is great. Alright. Kristen, can you kill that pole? Oh, there’s it’s all ah, ****. There’s a bunch of them. I didn’t realize we had the other questions below. Okay. The the restoration but you guys filled it out. So I appreciate you reading above or reading below. The restoration contractors lose money. Two percent said that restorers lose money. Then we had twelve percent say zero to four. Twenty nine percent, they’re five to ten. Thirty four percent are, like, ten to twenty percent making some bucks, and twenty three people percent said, hey. They’re making twenty points or more. And then the next question was how much does your company make how much does revenue does your company do? And we got a lot of small companies. Thirty percent are under a million, thirty one percent are one to three, and then the majority of you are three to six. So you’re kind of, like, under six million is the majority, and we got a couple of whales in here who are bigger than ten. And what was your net profit, not your EBITDA? And we had I lost money, ten percent lost money. Zero to five was a twenty eight percent. Five to seven, fifteen. Seven to ten was twenty six, and ten percent or more feeling like a hero. Those numbers are better this year than they were in past years. So in past years, we had eighty percent of people under ten percent. And this year oh, no. This year, we’re we’re eighty percent or under ten percent as well. So I’m doing the math on the fly here. Interesting. So we’re still in that under, but we have a little bit I’m gonna say we’re we’re more skewed. Like, zero to five is a third a third of the companies are less than five percent. Forty percent of the companies are between five and ten, and twenty percent or above. So our average on there would be, like, say, five, six percent, not twenty. And that’s a misperception. If you’re not in the business, you think everybody’s making money, much more money than there is. And so this is important because when we get into the costs, this is where we’re gonna really dig into this. So thanks for filling that out. Alright. We’re gonna use those numbers. Because when you look at a business and in restoration or any business, cost is, like, eighty five to ninety percent of your business. If you have costs over a hundred, you lose money. So anytime you see a company that’s lost money, their costs are over a hundred. Lost dollars, your accountants can’t see. So that’s things that don’t hit your books. That’s profit that you lose or cost that you lose that you can’t see. And then profit is the future life of your company. And if we think about it that way, it’s it’s less greedy, but it it’s an easier way to to envision it. It doesn’t matter on how big your company is. So if you’re a small company, we have a lot of of under a million dollar companies or, like, zero to a million. It doesn’t matter if you’re a two hundred thousand dollar company or eight hundred thousand dollar company or two million or a billion. Right? The it doesn’t matter. These pies are all gonna be the same. Percentage wise, they’re gonna vary a little bit, but the pie is your revenue. So when we look at that, we say, hey. This is our sales. That entire pie, everything inside that circle is our revenue. It’s important that we have that because when we start to look at things like cost of goods sold, all the costs that are directly related to finishing the job. So that’s your technicians going out. As a technician that’s going out to the field, if you’re a carpenter that’s going out to the field, that’s your your COGS, your cost of goods sold. It’s equipment rental materials and consumables. All of that gets jammed into the cost of goods sold. So the when we look at this, it represents a large bucket of cost. If I’m an owner, I look at cost of goods sold and see if I can bring those costs down through efficiency or savings or cost cuts to get the price down so we can make more profit. We spend a lot of money there. Now everything after that is called gross profit, and that’s the number you probably see. So if you see the number and you’re like, hey. I see a gross profit, like, forty five percent. Well, that’s because you’re seeing the number of there’s a bunch of companies still to run, but we take the cost for the job out, and then this profit is left. And it looks like this if you were to look at it as, like, numbers. Let’s say we have a five million dollar company. The costs are the dollars that we pay to staff and trades and all that, and that goes out of the company. Then the company is left with two million dollars, and you’re like, that’s really good. That’s a lot of money. Okay. So that’s the first checkpoint on the way to net profit, where the owners that were on the survey said, hey. We’re kinda like five to ten percent or three to ten percent. We’re sort of we’ll average at five. Couple guys are doing really well. Couple guys are are not doing so well. We’re gonna say it’s five percent. Then we look at overheads, and overheads are things like your shop. If you don’t sell anything this year, you still have to pay rental on that shop and heat and utilities. So we have that, and then we have some fixed and variable costs. So fixed are your your shop. Variable might be like your cell phones, staff that are in there that are working in the office. If you’re really busy, you add more staff to it. So what we do is we look at that, we say, well, there’s a whole bunch of company that doesn’t get attributed to the job, but we charge it out. So you see gross profit, and then we have these fixed and variable costs, and they flow below it. So when you see a profit and loss statement and your owners are looking at it, then they’re like, oh, and then I got all these other costs that aren’t tied to a job. And so we’ll say it’s fifteen and fifteen. It’s it’s usually a different, split, but for this example, we’re just gonna even them out. For those of you that are in the franchise networks, you pay royalties, and we always grumble when we pay royalties. I hate to pay royalties. You’ll hate paying royalties. But royalties are part of the business. And if you look at the franchise business, let’s say it’s a franchise and they charge five percent and they make ten percent. Well, spend four and a half percent on marketing and operations and supporting you and then they make a small percent. So if you pay five, think of it as like you really gave up point five percent in profit because they’re not making a ton of money on the franchise or they just get a nice steady revenue off of sales, but they’re not making five percent. They’re making a sliver of that five percent. So they’re a lot of that investment is in your benefit. When you look at that way, what happens is we put that royalty in above the line because it comes off every sale. So if you’re working for, like, a service master, Paul Davis, Servpro, you’re getting royalties that are going up to the the franchise. So that comes off every sale, and and that helps with, like, national marketing and other initiatives. What we do is we look at that and that lowers your gross profit. That number goes up, and then where I’m gonna take it from just for today, because just for simple math, is, like, it’s variable cost. Like, my marketing cost got shifted up to royalties. It depends on your brand. So I’m gonna just make the adjustment. We just move it up, and now your cost of goods goes up. Your your gross profit goes down. But what’s interesting is that you get to this profit number, and this profit number is what’s left after. And in in twenty eighteen, it was seven percent. In twenty twenty four, it was five. And, like, right now, it’s, like, maybe five to seven. So we’re kinda, like, staying even or maybe a little bit down. And some organizations will have more, which we saw. Like, you saw some owners said, hey. We did better than ten. And you have some organizations that lost money, and they feel like they ****, and and that’s alright. That’s why you’re here. The last category that you focus on is it’s a different profit. It’s called EBITDA. So you’re like, oh, cool. We made ten percent. No. You didn’t. Because that ten percent is profit, and then you have to pay interest taxes depreciation amortization. And I wanna say it’s about thirty percent. It could be more or less depending where you are. And then you get to that profit, which is called net profit and that is the profit in a company. So when these owners said, hey. I’m, like, three percent, five percent, six percent. It means for every dollar you put in the company, three cents come to you or come to the owner or come to the business. They come to the business. So when we look at the business, there’s not a lot left. In our survey today, it looked like about five. Five cents came to the bottom line, and that is for every dollar you do, five cents comes to the bottom line. Just that’s all you have to remember. Put a dollar on the table, take a nickel out. That’s the amount that the company keeps at the end of the year for every dollar they run. Alright. Now there’s this dollar that you can’t see, and this is where as a technician or a project manager or an estimator, everyone needs to be focused on. It’s the lost dollars. And the lost dollars, you never hear an owner say, hey. You know what? We had a rough year. We made too much money. But you will hear them say, hey. We lost money, and these lost dollars is usually where you lose the the your profit. A private equity firm who are really good at managing numbers, they aren’t trained enough or skilled enough to understand where these dollars are missing. And if you’re not built for that, you’re gonna have a bunch of dollars go out the back door that you don’t know. Now it happens in independence. If you have general managers or technicians that aren’t well trained, these dollars leave your company at an extremely fast pace, and you can’t see it unless you’re in the day to day. So we have a slogan at at profitable restore. We every dollar counts. It’s cost, it’s lost, or it’s profit. And the reason why is if you’re not focused on all three of those, your business is not gonna make money. So it’s mostly cost. There’s some loss, and then the little bit that’s left is profit. And so we wanna extend that or expand that as much as possible, and that’s how we’re gonna start today’s conversation. So if you’re a technician here and you didn’t understand how business runs, that’s just like the high level. But I wanted to give you that perspective because now what it does is now when we talk about cost, it’s where you guys are in the field. You are a cost in the field, and you deal with costs in the field. And so you are the first line of defense for being able to protect a restoration company’s profit. And if you think about it like survivability, you’re protecting the survivability of the business. Alright. It didn’t matter. So when I when I when I had the large independent business, we brought in a high performance team. I I brought in an operations manager oh, sorry. A mitigation manager, construction manager because that’s where we were losing money. We had people pulling staff away, and our inefficiency was through the roof, and our schedules were off. So we fixed inefficiency within the business. We invested in the business on spots that we were really poor at. When I went to the forty million dollar company, we got rid of a bunch of overhead. Every job that we were taking for some of our project managers was losing us money. So we actually lost revenue to make profit. So we got rid of all the costs that we were actually paying to do work, and we quickly got rid of that type of work, and we increased our bottom line. We drove efficiency. We invest in training. We did a bunch of things that were good for the business. Now I have a different view on costs, and I’m gonna share that with you because when you work for private equity, it’s all about head count. But I look at staff a little bit different than than some people. So I look at it as as as I look to put an a list team together, a high performance team. It’s a different management style because you don’t have to manage as much because you got independent workers. It cost you more, but the result is you should be earning more. So when we look at cost, not all costs are are valued the same. But there’s a ton of costs that make up that that business. Right? We’ve got fixed, variable, and cost of goods sold. So in our cost, we have staff, trades, materials, we’ve got overheads, equipment, we’ve got vehicles and fuel, and then we have mistakes and chargebacks. And mistakes and chargebacks are things like where you damage the floor, then you were walking over, and now you gotta do something with it. We have effort. Where do you put twenty percent of your effort to get eighty percent of your result? So it’s just looking at if I need to get some quick wins tomorrow, which when you leave here, you want quick wins. How are you gonna start focusing on that? So I look at good costs. Now these are are costs that I look at as an investment staff. And in university, I had this professor. So I had a really influential professor, John Melnick. I worked with him over a number of years, and we’ve he was like a Peter Drucker super fan. And so in my my younger life, I was reading about how people were valued as an asset, not as a cost. And it was a different way because when you went to accounting class, they talked about people as, like, their cost of goods sold, their cost in your business. But Drucker looked at them as you invest in your staff. And if you invest in your staff, you look them as an asset, then you treat them differently, and you invest in the long term because you want the asset to grow. It’s kinda like if you ever coach sports. Right? If you were to look at staff like a like a sports team, you get players that have some natural ability where they don’t know how to play the game. You coach them. You build them up. You show them the things you know. You get them to some skills, and hopefully, they move up your team to that first line or that top position. In sports, they leave your team to go to another team that is better. And and then as a coach, you’re trying to get to that new team. In business, you’re trying to move your team up to that next level. So you’re taking that top tier of talent and moving the entire company up and bringing the people through the ranks. So it’s a little different in business, but I look at staff as something that you put your time and energy into. Trades, I put in there as well. And and back in the day, we would have said, you know what? Trades are are important, but Drucker had another another amazing philosophy that there’s, like, front of house, do what you do, like your business. If you’re a mitigation company, you’re water damage company. Hire your substrates for rebuild because you’re not that. And so it was an interesting philosophy that came full circle from back in the days with John is if you do what you do really well, then you should make a lot of money there. And if you hire somebody who does something that they do very well, you should make money there too. And I like sub trades because they’re in high demand right now. They’re hard to get good skilled ones, and they’re always searching for good cash flow. Doesn’t matter how good your trade is. They’re normally not really well run businesses. They’re they’re smaller companies typically, the ones we deal with. They need some help on cash flow. And so what I do is I look at this as how do you invest? And I invest my time and you perform our core services. We look at putting our our team focused directly on the things that we can do really well that we learn and we’re experts in. You invest in them, you coach and mentor them, and you build a career path. That’s just like if you do that with good people, you’re gonna do really well. Trades are a little different. You need a reliable partner. It shows up. You have to provide them structure. So here’s how you invoice it. It’s, hey. Can you please invoice us on the Thursday before? Because when you invoice us on Monday, you don’t get paid for a few weeks. You coach and mentor them. Do you really need to buy a new truck every year? Or you know what? If you buy a truck every three years, it’s gonna be easier for us to do business. How they operate, you can coach them. You’re you’re a bigger business. I’m a three million dollar business. I’m a million dollar business. I I do five hundred grand. It doesn’t matter. They’re doing fifty grand. Coach them. Hey. When you’re when you’re looking at vehicles, you shouldn’t be buying a new vehicle every year. There’s trades that drive around in, like, the biggest jacked up trucks. You don’t need that every year. You know? That truck will last you five, six years. And then accountability. If they screw up on a job, who’s paying? You or them? In my company, it was always them. I hired you to do the job. When you screw up, you’re gonna pay for the fixes on it. I don’t fix it. So I lock in my margin, and then it’s up to them to run the job. I’m not them. I’m not I’m not drywaller. I’m not gonna I don’t know if you’re gonna make money on this or not, but you should know you’re the expert. So that’s how we look at them. And then I help them be profitable. Right? I wanna cash flow them. I’m gonna work with them. We’re gonna help them be profitable. Why? Because I need them to survive to keep doing what I do. And if I keep doing what I do, which is, like, run the trades, and I’m gonna go do wire damage, and I gotta put do the putbacks because that’s how I get more volume. Well, then I need this to focus on my on my my craft, damage, and I need them to to be there to support me. And so I’m willing to take less dollars here to be able to get that full service. That make sense? So I put those guys as, like, our top two good investments. People, you can’t replace it. Then I have the bad cost. And in there, put materials. Now it’s not that materials are there, but it’s because I hate paying more for materials than I should. So on materials, they’re just a commodity. I don’t like paying fifteen percent more for a piece of two by four at one store versus another. I’m gonna get the best deal. And, normally, you’re just like, a two by four is a two by four. Right? Except for when you go Home Depot and they get them from twisty trees and they’re all spiral. But I I a two by four is a two by four. I want the best deal on it. I don’t really care where it comes from. It doesn’t change the quality of my build. Scheduling it might, so maybe I’ll pay a little bit of a premium to get delivered or to get the material in when I need it. But as a general rule, it’s just find the best price. Shop it hard because they don’t get upset when you shop it hard. Tomorrow, that material still stays on the worksite and doesn’t call in sick because you negotiate it hard. You get what I’m saying? Then what we do is we look at chargebacks. Now chargebacks is usually a management failure, process failure. So a chargeback is there wasn’t enough direction on a job. There wasn’t enough clarity. We didn’t finish the product to spec. No one inspected it for quality. We went from drywall to finish, and no one caught the problems along the way. And now we have a chargeback because we have to go back and fix things. Those are some of the most dangerous cost to your business because you’re getting damaged reputation, you’re getting complaints, and you’re eating real dollars out of your bottom line. Every dollar you spend on a chargeback comes straight out of your profit. Like, one hundred percent of them come out of your profit. So if you made five percent and you have a two percent chargeback, you now made three. It, like, eroded all your profits. And so you have to avoid these, which is any mistakes and chargebacks. Like, that’s just unacceptable when we have time to communicate. So that’s one of the ones I put as, like, the bad cost. You don’t want those in your business. The other ones is equipment, vehicles, and overheads. Three expenses I put in the middle. Why? Shop them hard. I’m gonna negotiate these really hard because they’re still commodities. But the reason I I care more about this is my equipment. I need high quality equipment. I want the best equipment on the job site that’s reliable. It’s gonna run. It’s gonna perform. It’s gonna do what I expect it to do. So if I’m buying dehumidifiers and air movers, I’m not buying the Chinese knockoff gear. Tell you that right now because you can’t build an aggressive pricing strategy around cheap equipment. Now I’m not saying that everything that comes off the blue and red lines are the best, but I’m gonna rely on them to put quality equipment out and that it does its job. I need the performance of that. I need the the security of that so I can build pricing around that material and that equipment, and I need my staff to have stuff that works because I got can’t drag jobs out. Right? I can’t drop, drag that time out. Now you might disagree with that statement and say, hey. Well, there’s a there’s a benefit to buying equipment for half price. I don’t think there is when you look at the performance of your gear. It’s just you’re you’re spending a lot of time spinning your tires and arguing over why it took eight days to dry something when you probably could drive it in four or five with with good gear. I get premium equipment. Now my vehicles is the other one, and you can disagree with me on this one, but a vehicle is a delivery tool. So the equipment is a tool for the technicians and my staff to execute good quality equipment that runs. My vehicles, a lot of times, we were in these terms like the people movers. Hate the term because it’s not you’re moving people. You’re not moving what makes the business run. We need to deliver equipment, materials, consumables, and people to the job. When you just get people movers, you’re now hamstringing yourself that you can’t get the equipment into the job. So when you’re twenty four hour on call is driving a Dodge Caravan, which I ran by the way, and you need to move some equipment to the job, what are you fitting into that Dodge Caravan? And you got people mover, but not an equipment mover. Like, maybe four air movers and a dehumidifier and one scrubber. That’s what you’re moving. That’s your revenue that you’re putting on that job. If you were to drive a Dodge Sprinter and you rolled in with sixty thousand dollars a gear in the back, guess what? If that job needs more money more equipment, you’re gonna make more money. Does that make sense? So equipment is or vehicles is where I’m spending my money to get the right tool to do the delivery of the equipment and materials that I need. The fuel is just the cost of doing business. The thing you don’t see, Dodge Caravan shows up with five pieces of equipment. Sprinter shows up with twenty five pieces of equipment. That drops off five pieces of equipment. You get the margin off the job of five pieces of equipment being delivered. You can’t tell that the Sprinter was gonna make you more money. That’s why those lost dollars. So the people that go in and like, oh, we’re gonna get electric cars. Cool. I don’t think they can haul what you can haul with gas or diesel. So just my I’m a I’m a vehicle snob. I won’t put electric in because we’re twenty four hour service. If you go to a cat zone, are you gonna roll in with with temporary batteries in the back? No. You’re gonna roll in with temporary gas in the back of your truck, and you’re gonna run your equipment off of that stuff. It just doesn’t make a lot of sense in what we do. I want my services to be a hundred percent ready to go and go anywhere that we need to go so we can make money. Then you have overheads. Overheads are you can think of it like the shop. Like, do you have the prime location? But look at, like, things like Internet, phones. Because your cell phone’s, like, six years old, you’re like, hey, guys. Can you document the field with the oldest phone possible? Or are you actually putting, like, high quality tech in their hands so that they can do their job? Do you have monitors? Like, I just bought my team forty nine inch monitors because I want more efficiency out of them. So I want the better work experience for the for the staff that we have. If I’m a restorer, I’m looking for, like, how much more time can I get out of my project management assistance? How many more files can they handle before I have to hire another one? Overheads is all about efficiency. It’s about driving the company for efficiency and getting the most value out of your overhead and look at it as a support. So this is how I want you to look at it. Staff and trades are the most important part of your business because that’s how work gets done. Equipment vehicles and overheads are the things that support that team. So I want to invest in good quality stuff to help them. Materials and mistakes, those are unacceptable. Like, that’s how people get fired is by not paying attention to that, and that’s how you lose money over there. And we come back to the twenty percent effort on eighty percent of the results. Now I’m a big Jim Rohn fan because I found this quote, and I’m like a super fan of it now. Don’t spend minor time on major things, and don’t spend major time on minor things. So if you come in and you’re like, you know what I should do? I should negotiate with these sub trades. Yeah. You should. Go negotiate. That’s a major thing that you can save a few percentage points on. Do I go in and and nickel and dime every trade on everything like an adjuster or like a TPA? No. I said, have a deal with you, and I’m gonna honor the deal so we can move forward because we wanna be partners. I might be unfair to the TPAs and and the adjusters, but I’m not nickel and diming every job. Like, I’m there to do a job. And and I expect my trades to be there, and we’re gonna treat them with, if I say I’m gonna do something, I’m gonna deliver it. Now a bunch of you came back where there was a ton of questions pre on how do you value labor? And so I was like, okay. Well, I’ll just throw this in for you. But this is also good if you’re a technician on this call or or someone who works in the business like, hey. How how come some people get paid more than I do? If you look at the value versus wage, then you look at what is the value of a slow skilled labor, and the value to a company starts high when I pay you less. As I pay you and your low skill more, the value to my company becomes less and less. And so your value and my need will meet at this intersection. And if I overpay you, you get more value and I take a loss. That’s just how it works. Somewhere in this intersection line is where your wages. You’re either lower paid or higher paid within that skill set. So you might be a labor I’m gonna use a number, like fifteen dollars. And someone makes seventeen dollars and someone makes thirteen dollars. Well, well, Jerry, who’s making thirteen dollars, has a bad attitude, never ties his boots, and looks like he just got dressed every morning with his bed head. Sam, who’s who’s showing up to the job, has a great attitude. Customers love them, but they have the same skill set. So the attitude is where I’m gonna I’m gonna overpay because I value that more than I do someone that I have to tell them to tie their shoes every morning. You get what I’m saying? So inside the same skill set, there’s there’s a little bit of a range. When you move to, like, a higher value skill set, so someone with more experience, the range gets bigger. And then companies lose people, and they’re like, well, I don’t know why I lost somebody, and I don’t know why a company pays more for somebody than what I paid. I paid all my estimators x. I don’t know why they went over to another company. Well, another company, you might value poor behavior or bad attitude as, like, very low. You put them on the bottom of your scale. Someone else who has nobody is like, I will take that person and put them on the top of the scale because I need to get someone with a bad attitude in. I just need someone to do the work. I don’t care what kind of attitude they have. But if you would build a high performance organization, then you’re like, I’m I’m gonna pay top dollar for the best attitude, and I’m gonna pay less for those that I have to manage. And so a high performing group, whether you’re a labor and you come in and kick *** and do your job, I’ll pay you more because you make my life easier, and you actually take care of problems, and you throw the garbage out, and you don’t put coffee cups all over my shop. Those are the things that piss me off. Right? Coffee cups all over the shop, like it’s just randomly put it on my shelf. But you keep my shop clean. You’re you’re sweeping up when you come in at the end of the day. I value that more than someone who’s trying to punch out early. On the estimator side, I appreciate the estimator who’s willing to call up the adjuster and have, a reasonable conversation and spend fifteen minutes more justifying our charges than the one that’s gonna sit there and complain that they’re not getting paid because they didn’t put any information in the estimate. Like, there’s, yes, you can do the job. You can work the system. I need that revenue to come in. And so that’s what we’re looking for, and that’s why you see these these values of why high skilled workers the business can support it in some cases if you have everything else functioning. So value of an employee, the cost of an employee will vary even within the position based on the other things that they do. So if your skill set is estimating with exact, like, cool. Who’s got a better grasp of it? That’s why you’re gonna get paid more. You show up and do your job? Do I have to manage? That’s why there’s there’s that that difference in in wage. If you bring someone in who’s like no skill and you pay them a large amount, you just have made a decision. I’m gonna teach them the skills. That makes sense. Alright. We’re gonna do another poll. This one is for the business owners or people that know the prices. The next two polls will help determine the revenue. So I’m gonna we’re gonna take the revenues into the next, next discussion. What is the average size of your mitigation job? Two or less, two to five, five to ten, or ten or more. And this does not include rebuild. And then what is the what is the average size of your rebuild job? Five or less, five to ten, ten to twenty, twenty or more. Yeah. This is awesome. Yeah. Yeah. You could include fire. Yeah. Why not? If you guys are, like, a fire company or a mold company, what’s yeah. Jam it in there. Fuel charge is no longer considered a cost of doing business according to Verisk. Yeah. Well, you know what? We’ll get into we’ll get into that because because I’m I’ve got a different opinion on the estimating systems, and I’m not I’m not restricted to say what I think anymore. Actually, I was never restricted when I was in circle. I’m talking about something different. So I’m not I’m not under the new brand, profitable restore. I I don’t care what people think. I’ll tell you, like, how it is and how we actually see it. And if a company that designs software doesn’t like it, then that’s that’s their problem. Alright. So a lot of average job size is sitting at, like, seventy five hundred. I’m gonna say five to ten, like, seventy five and three to five. So it’s, like, sixty five hundred on mitigation. And on rebuild, we’re sitting somewhere, like, twelve thousand, fifteen thousand maybe. Ten wipes out. Yeah. Fifteen thousand dollars is about where we’re at. Perfect. So this is important because when you do when you do rebuild or you do anything, mitigation, rebuild, there used to be a term. And the average job we said is is about six thousand dollars for mitigation, about twelve thousand or or fifteen thousand for rebuild. And when you look at that, you say, hey. If I save a dollar, I earn a dollar. So every dollar of cost goes to your bottom line. Right? So if we don’t damage someone’s floor, that dollar moves to the bottom line. If we damage the floor and we have to take five hundred dollars to repair it, it all comes out of that pennies on the dollar, and we have to ship that money out. So save a dollar, earn a dollar. It means that you keep the dollars in the bottom. There’s another saying here, which is charge a dollar, earn ten cents. And what’s interesting about that is that the the saying was charge a dollar, earn ten cents means for every dollar you charge, you make ten. But we know that’s not true, and, actually, it was pretty close. It’s that you earn five cents. And so for every dollar, you earn five cents. Now on the call, it’s we had people that were losing money. So you’re actually losing money on jobs. You’re taking jobs that you lose money on. Others were making, like, twenty cents or fifteen cents or more on the job. But for an average, it was like you make five cents on every dollar. You could think of this as earn a dollar or earn net profit per dollar, and that’s how an owner will look at it. So when we go back to reducing costs, and and I appreciate, Cruz’s comment there, You got all these costs in here, and I I I screwed up. So I had staff and vehicles. I really don’t I I like I pick the vehicles I want, and I hire the staff I need. But I had it set up like this. Actually, I’m wrong because I negotiate my fuel, and I go get fuel cards, and I negotiate my vehicles hard because I don’t care. I just pick the right vehicle I want, and then I negotiate that. So this is just wrong. I I would save some money on my vehicles and my fuel, but I like the vehicles I have. So I made a mistake there on that on that slide. But here’s what I want you to think about. In your business, if you’re losing money, today is the day you gotta think about this. So if you’re losing money or you’re making money, it doesn’t really matter, but it it means a lot more when you’re down on the bottom end. Costs are how do you cut so you don’t damage your business? So if I’m dealing with trades, do I cut their bill? No. It doesn’t feel good when an insurance company cuts your bill. If the insurance companies gave me a chance to get paid faster, I’d take that so I could cash flow my company. I would give up some dollars of borrowing so I could run my my my business faster and leaner and have more cash in my bank. Your sub trades absolutely use this. And so you do quick pay discounts, or you do a volume discount and a quick pay discount, you can negotiate trades. You have to be a financially stable company. So those of you that had a higher profitability year this year, you’re in a better position to act as, like, a payday loan for your trades and make sure that they get their cash fast. But there’s a discount. They’re gonna pay you a premium two to ten percent. So you negotiate maybe a volume discount. You’re gonna do a hundred, two hundred grand with them. You want five percent off. And then if they want their pay faster, you knock another five points off. You save ten. On material, I’m grinding materials every time. Like, if I get a five thousand dollar job, I’m sending it to the lumber yard to get bid because I know that they can lower the price beyond what’s on the shelf or beyond the blanket discount I get. I can get specific discounts based on different types of material that we submit. So if you are running reconstruction and you decided to go in house, I would be hammering the material deals. Now I would also hammer the material deals if I was running sub trades and they weren’t big enough. I’d be like, hey. I’ll buy the material. You do the labor, and I’m gonna get the the discount on material, and I’m gonna save that ten, fifteen percent on my material. Equipment’s harder. Equipment, you normally don’t CapEx or or have a capital expenditure. You normally don’t put that into play when you’re you’re doing your budgets. If if you’re not cash flowing very well, if you’re on the lower end of, like, making money, you buy equipment when you need it. If you’re on the higher end of making money, you buy equipment when it’s the best deal and you make more money. So when do you buy your equipment? Well, when the there’s nothing going on in the industry. When the industry is dead and the equipment manufacturers and the retailers need to sell gear, go in and negotiate at that time, and you’ll save some money. But I don’t push this one too hard. I I go brand name gear. I’m gonna get it for about the same price. Sometimes there’s, like, deals where they’ll throw an air scrubber in or something else of value. That’s how I’m saving money. Overheads is all about driving efficiency. Although I told you about those monitors, I save fifty points or forty points on my monitors. I got a good deal on my monitors, and I increased my production. So I was, like, super happy I got them. Those monitors, things like buying a good computer, buying good monitors, getting good cell phones for teams. If I can get more work per day out of my staff for the money the money I’m paying them, if I can get more out of them, the value of that staff member goes up for me because of the things we put in their hands. I make their jobs easier. So in today’s world, maybe they need to get to a soccer game. So if I can save them an hour, I can get that work life balance together, and then they can get to a soccer game after work because they’re not doing all the work during the day. So if those tools improve the quality of life of my my valued staff, then I’m gonna pay for it because I want it. And then at certain times, it’s gonna be like, well, we can do more work with it as well. So to win win, it’s all about driving that efficiency. And then we have the mistakes, and those come straight off your bottom line. So where the other ones are adding to your bottom line, the mistakes and chargebacks ripped bottom line out. And if you have a big loss, in two thousand nine, I had to pay a hundred and thirty six thousand dollars to redo somebody’s hardwood floors because the water techs, and it wasn’t their fault, it was a project manager, sanded hardwood floors when it had cut. They sanded it, and then it crowned. And then they’re like, well, we should sand it again. And or there was another water damage. It cupped again. They sanded it again, and then it gave it, like, a super a super crown. I had to replace the floors. He couldn’t fix it. And so it’s a hundred and thirty seven thousand dollars off my bottom line, off my bonus, off the company’s revenue. Not a good day, but you had to make it go away because we screwed up. And so that’s where you look at mistakes and chargebacks as knocking your profit rate out. It will erode your profitability. That’s why trades and staff are more valuable because they gotta prevent that from happening. And so those trades and staff that do that, that prevent that from happening, I value more than the ones that keep coming in and be like, sorry, boss. I put a hammer into the wall. That’s bottom line dollars going out. I don’t value that very much. Okay. Quick poll. Based on this, how much do you think you could put into your business just based on these ideas? Nothing. We’re already optimized. One to two percent, two to four, four to six, six or more. Right? I love the answers coming in. I love you guys participating. Thank you. And the chat, I I I can’t read the chat very often, but when I do, I I love seeing it. Beautiful, guys. So this was this was when I when I looked at my business, I was like, well, we have business as usual costs. So it’s like, well, this is this is how business is done, and it’s business as usual. And and one of the the fears that we had, when you don’t have money, you value your cost. You hang on to those dollars tight. When you get profit and your business gets a little bit liquid, we get a little loose with our spending. It’s just natural behavior. You need to ship that cash out of the company into another, like, bank account so that you never have that big number sitting in the bank because it’s really easy to spend and get yourself into trouble. Alright. Let’s see what we got here. We got nothing. We’re optimized. Two percent said, hey. I think we’ve got that dialed in. That’s awesome. Those are probably the the people on the high side of the twenty. One to two, loving it. Two to four, four to six, six plus. Yeah. So I’m gonna say seventy percent of us think we can get more than two percent average it out. Let’s split the average and say five percent. Five percent’s monster. That’s a monster gain in a business, especially when our average was five. And just on cost savings, we could do five. So just using averages. It’s it’s gonna be different. But let’s if you look at that, that’s double your profit. That’s one hundred percent pickup on profit if you can just find five cents on every dollar to save. **** it. Kevin says I love it. K, guys. Here’s the warning with this. Like anything oh, it’d be good if things work for me. If you cut too deep, you actually harm your business. So you go back to that Jim Rohn. Don’t spend major time on minor things. If you’re cutting an area where you just keep hounding on it, like, it’s it’s good to be that person to a point. And so then you’re like, well, you know what? We’re spending a lot on gas, or we’re spending a lot on on two by fours. Okay. Well, you know what? You’re you’re saving now a penny or two per two by four. It’s not worth your time. Your return on your investment, your return on your time is not worth it. Okay? So at that point, you have to change how you’re doing things and and start slowing up. Go focus on something else. K. Kristen, let’s let’s crank it up. Let’s go to q and a time. Alright. Ready. We got some great questions coming in. So first one is, what is the industry average or goal for cost of goods sold? Hard one to answer because it depends on what you’re doing, and it depends how you set up the business. So it’s easy to say, well, you know, you should be getting seventy or eighty percent on water damage. And, you know, if you’re getting fifty, you’re probably a little low. It’s easy to say that, but you don’t know how you’re how you’re maximizing your numbers. Like, you have to break it down and be like, okay. Well, what is your cost of goods sold first? Because how I do my bookkeeping and you do yours, do I put my non billable hours as cost of goods sold on every labor hour, or do I bury it in my overhead? So it it it’s gonna deviate from there. And and, really, the only true metric that you can look at is what is your net profit. Now I say that if you get a group of people together where we all sit down and say, okay, here’s how you you do your book so you can kinda normalize it. You can normalize your books and then you can have that discussion. So now I’m gonna answer that dangerous question where the dangerous answer is that there’s not a general cost of goods sold, but you’re gonna see a smaller cost of goods sold typically on water damage because we do a bunch of false accounting. We don’t account for the warehouse space that our equipment sits in, so we don’t create a contribution margin to attach to that. And so there’s a lot of like, it’s it’s technical accounting, but I won’t do it here. But it’s just it’s a conversation when you get into, like, hey. I really wanna focus on that, my numbers, then that’s, like, a deep dive into accounting and how do you set up your accounting practices and, like, which is the best way to look at it. If you’re struggling with profitability, though, I would say, yes. That’s where I would look. Is it wages, or is it how you buy your materials? Is it how you store? Like, are you always going to Home Depot to get or are you always going to one of, like, Ramscore John Don to get your supplies, do you bring it into the shop and set up a little consumable room so you don’t burn those hours up and then you can get more time in the job? Like, there’s a whole bunch of factors that come to it. So it’s a tough question to answer. There’s no there’s no one answer that fits it. And as a rule to pay for labor, if we’re paying techs twenty five dollars per hour and we are charging a hundred with all the expense of vacation, health care, paid sick time, nonproductive training, it all adds up. So what are your thoughts on this? So pricing schemes are hard, and it depends. So so is that rate and material? Is that Xactimate? Is it value pricing? Is it cost plus? Like, there’s a whole bunch of systems that we’re talking about. So I’m gonna just assume we’re talking exact to make for the or rate material. Let’s just say it’s rate material because it’s it’s locked in. If I have a profitability goal at the end of the year, I have to run it against everything. So exact where and Symbility for that point don’t necessarily put margin on top of material. So they say your drywall cost, let’s say it’s it’s eight dollars. A board of drywall is eight dollars, and in the in the program it says it’s eight dollars. Okay. But I need forty percent to, like, hit my numbers. So that drywall has to go up forty percent. It needs to be fourteen or thirteen dollars so that on every board, I’m getting paid my profit. And if it’s not there, that has to be on labor. So the the pricing scheme or the the pricing mechanics that you put in play has to account for how are you charging. So if you have a hundred dollar labor hour charge, what is the margin you’ve got on your materials? So it’s not like a definite answer. Does that make sense? Although the way you described it would make sense. What are you getting on those materials, or is your labor offsetting the material cost because you’re giving your cost away on your materials? So your your your logic there doesn’t make it’s not it doesn’t it doesn’t sound wrong to me. It just would in the bigger picture of, like, how do we price the entire business, it might not be an accurate answer. And so what if your company is only mitigation and doesn’t do recon? Recon? What should that breakdown look like? Yeah. So so, again, so you’re narrowing it down. So let’s say we get rid of recon. We’re down to mitigation. Are you do you have a lot of downtime? Do you have other services like you’re doing carpet cleaning so that you can get those walls? Like, in restoration, you get spikes right here. You get these spikes. So if you go, like, mitigations like this. Right? Rebuild is like this. Wherever you have a spike in in well, technically, you get a spike here, and then it goes up. You get a spike here. We’d love to see what you’re working on. You can’t see it? No. We go. It is. Alright. Let’s go back and show you that. Sorry. Hit the wrong button. K. If you’re looking at mitigation, mitigation goes like this. And so who’s paying for this downtime in between? So what what should your number be? Well, in there, your number is is based on how are you covering off these costs. These spikes have to pay for these downtimes. After a spike in mitigation, your rebuild comes in and you get these rebuild humps that come out of those losses. So if you’re a blended company, your profits are gonna change. But it’s depending on how you’ve set up everything. Like, what would I expect on a water damage job? Depends if it’s category three. Do I have stabilization? Like, you could get as high as eighty five percent gross profit where you have a little bit of labor and stabilizing and you have a lot of equipment rental, and then you go in and you do a proper clean. So then you get a a lower margin on that on that labor, but then you get a a bigger margin on the drying portion. So, like, less than fifty is pretty tough. If you’re doing it right, fifty to seventy five is is sort of where you need to sit. And, again, if I have a technician or a project manager that’s at fifty and I have one that’s at seventy five, I value that seventy five percent margin more than I value the fifty, right, when we come to the wages. Thanks, Kristen. Yeah. For sure. No problem. Do you wanna take a few more questions? Yeah. Let’s go let’s go two more questions and take us to twenty five. Sounds good. So, this question, I haven’t seen much about marketing sales costs. We’re being tapped more and more for sponsors, etcetera. I’d love to know what a reasonable percentage of sales, would be to spend effectively. Yeah. So marketing is interesting. Right? If you looked at, like, a pair of Nike shoes and then you were looking at a a just a pair of dollar store shoes, like, what’s the difference between them? It’s pretty much marketing. They’re they’re not high quality. Now the materials might be better in a Nike shoe, maybe not. What differentiates them is the amount you spend on marketing. So in in our business, when you do insurance work let’s say you do program work. Program work, they’ve actually taken a lot of the marketing effort out for you. You did the marketing, you got the contract, and now you don’t have to market. You have to service. But if you do, like, plumber programs or other programs where you’re spending money on your marketing effort, if you’re spending those dollars on that marketing effort, that’s a cost of doing business, and you build it in to your job. So you would have a custom price list that you would build in, and you kind of come back and you’re like, okay. What am I what do I wanna spend? How am I spending my money? Am I doing, you know, in person broker meetings? Am I taking them to baseball games? Am I getting in there and and doing education sessions? Just build your cost into your price, and it becomes part of an entire it’s not just creating your own price list. Like, that’s that’s that’s actually not the method that you would do to get a company profitable. Like, great. You raise your prices. Did you raise them the right way? You can now actually put your marketing in as an expense per dollar that you generate in revenue, or you just say, I’m gonna spend it and move it as a fixed cost. I’m gonna spend a hundred grand this And that hundred grand is gonna be focused on all this, and I’m gonna drive new sales in off of that that expenditure and those new sales that come in off that silo. Let’s say let’s say I’m not doing property managers this year. I’m gonna add those costs in, or it’s just part of building that book of business. It’ll depend on how you want to account for it. But to say that it gets a cost of doing business and it eats out of your profit, it doesn’t have to. You just have to build a a pricing scheme that includes, I’m gonna go hard on marketing, and I’m not taking the vendor program deals. And so I’m gonna spend my money on that. Now when you look at franchises, franchises a franchise fee effectively does that for you. They spend an aggressive amount of money on marketing to drive revenue. So if you’re an independent doing small work, you’re not doing anything different or you’re you’re a franchise locally doing it, you’re not doing anything different. You just have to account for it. Okay. Let’s do one more question. This is a situational question, so I’m sure this would relate to the rest of the group. So we’re about to go live for mitigation through TPAs. We just need to choose our price point, and the benchmark is around forty percent below Xactimate pricing. Do you have a recommendation percentage for starting out? I was thinking thirty percent above benchmark, which would be a ten percent discount to exact pricing. So I gotta be careful here because we’re talking price like, you’re talking, what is it was a competition act. You you gotta be careful when you when you talk pricing in a situation like this of, like, directing price. So here here I’ll answer in a general term. When you look at your margins and you’re taking work in that way, I would look at that that revenue stream as, like, what is that revenue stream doing for your business? Why are you giving such a big discount? One, you you might just be like, hey. We just wanna get started, and we wanna get people busy. That’s that’s a great way to do it. You’re giving away the farm if you’re doing a dramatically lower rate, and you’re taking on all that liability of basically doing jobs wrong. Like, you’re walking into category three. You’re walking into hazardous materials, and you’re gonna be submarineing your prices. Part of it is what is your value of, like, your company and your time versus the work that you’re getting, and can you do something else with that? So if you had a home services business and you were gonna market the tar out of that that list that you get in from the water damage, damage is a little bit of a lost leader for us. I’m gonna market carpet cleaning and other repairs. Maybe if it was your sole business, you’re gonna do a lot of churning of business to make less dollars, and it’s just a decision you have to make. If or or maybe it’s twenty percent of your business, you’re like, hey. We’re gonna run that just to keep busy because we wanna keep people active. Hard to come up with a price. Like, exact to me pricing is already low. So if you’re gonna then go in and be like, hey. I wanna go lower. That that’s a that’s a business decision for you. And just be careful because, like, these businesses have laws, and someone has to pay for that that down point. The the false you know when we did the survey at the beginning and we say, hey. You don’t know the restoration business? How much do you think we make? They think that there’s thirty or forty percent extra dollars there that you don’t need to get paid. And the reality is if you look at the numbers that that were showing up on the survey, most owners are under ten percent. So for you to give a forty percent discount, you just gotta do the math. Alright. Lost dollars. And this could this could it might tie into that last question. So the worst types of dollars that you can lose are these lost dollars, and they’re the ones that you can’t see that you lost them. They’re ones that you don’t know should be there. So when I look at private equity firms, there’s a lot of them that struggle because there’s dollars that leave. And when you put that pressure on the business, even if you’re having, like, a bad year, you put the pressure on the business, it’s these dollars that you can’t touch. They don’t show up inside that circle that will hurt you. And the way I found this is I never ran an office. This the the one company I ran, I never was close to my office. I was seven hundred miles away. So my commute looked like this to get into the business. Now you have to think back in two thousand ten and eleven, there wasn’t very good systems for remote managing. So as I was going around, I was losing touch with the day to day. I lost touch with the field of business. I’d come in and I’d be in the office doing office stuff. I’d get out to the field, but you just didn’t have the field of business. You didn’t see the seven rush. You didn’t see how people were acting. You didn’t see attitudes. You didn’t see smiles. You didn’t you couldn’t get the feel. And then in two thousand fourteen, I was like, know what would be even better is if I just added three hundred miles to that trip, and I went and did this flight. And so when you get that far away and then you’re only in the business one week of the month, things are gonna slip. And I should have expected it, but I was scared losing money that I invested in the business. And at the time, I actually were buying a house, so I had my dad’s money on the line. I was like, hey, dad. You wanna put a line on like, I I can’t put my house on and then get a line of credit. Can you put the business loan on your line of credit? And he did. And so then you had that financial pressure as an extra motivator. It’s like, hey. Be a little awkward at Christmas. Hey, dad. I lost I lost that line of credit, and you have to pay for me. But that pressure creates a bunch of initiative that you have to go find some dollars. And what we found is that when we were managing at distance, I looked at the financials and went, well, those numbers look good. Those numbers look normal. Those numbers don’t add up because we kept getting into a position where the money’s going out, the numbers on the on the sheet. I’m like, man, I thought we would have done better. And what I didn’t know is that when I had a sick partner and then when I had a rookie manager and then when we had a bunch of, like, staff that we turned over because we didn’t want it, when I lost the business, I lost my book of business, and we focused strictly on going getting new business. And then I wasn’t focused on any of I was focused on the consulting and training and helping other restorers. I was enjoying the fund to run business, the one that was getting a lot of action from from other restorers. But I was getting rid of the textbooks, and I found that one that said it’s lost dollars. And so when I’ve looked at that lost dollars, I was like, oh, man. That’s exactly what’s happening here. I gotta go back and fix it. And sure enough, I started reviewing our estimates a little closer. I was like, well, the estimates look good. But then what I started doing is looking for the estimates for the lost dollars. Be like, wait a second. We didn’t size this job right. And so all of a sudden, it’s dollars I couldn’t see on the bottom line. And I’m like, oh, man. I like that job. We lost fifteen hundred dollars on a three thousand dollar job. Of course, we’re gonna hurt on that one. Because our pricing schemes was based on Xactimate, and that was based on our technicians knowing what they were doing, and it was based on the project managers and estimators knowing what they’re doing. But the problem was is I didn’t sit down and say, hey. Like, don’t let those dollars slip, and I wasn’t watching it. And so lost dollars are incredibly hard to find unless you know where they are. Now there’s a difference between lost dollars, like costs, and lost dollars. So lost dollars, there’d be, like, costs. Like, your TPA example would be a perfect example. You do the job for an agreed amount, and that’s your cost, and then you run your cost against it. The lost dollars is the amount that you could have charged for it. And you’d be like, wow. That’s a big number. And then when you compare it to your profit, you’re like, well, that that that actually would change the way we do things. It’s like we we had to put all these pieces of equipment on, or we rent our equipment normally for seven, like, per day. But in this agreement, we only do three days or four days of rental, so we lose three days of rental. Well, normally, in most businesses, if you make a business decision like you have a daily rate if I have a seven day daily rate, normally, my price is low for seven days. It’s an for what you consume. If I had a four day rate, my four day rate would be higher because I’m like, well, four days normally equals seven, so I’d have a five, six day rental rate built into four. Like, I changed my pricing scheme. When someone takes your seven day and just says, cut those three days off, it’s fat, you’re getting four at the lower rate, That’s where you have to be in charge of your pricing. Those are lost dollars. Does that make sense? So another lost dollar would be, I show up on my Dodge Caravan. I put five pieces of equipment in tonight, and I don’t go back to the shop to get the other fifteen. Why? Because I don’t wanna do three trips at two AM. Those are lost dollars. Then tomorrow, I come back with the same caravan, and I only put one load in, and I don’t put the third load in until the second or third day. And now we already lost all of our money. But you can’t see it because on the bottom line, it’s like, hey. We got ten days of rental and then added to our profit. K? That’s lost dollars. Those ones are outside of your your revenue. It’s revenue that you lost. And what lost dollars is, if you wanna look for it, it’s missing charges. So estimating, we have our missing charges. You have the wrong system. You used a unit pricing system when you had no idea what the efficiencies of the job were. And so you’re like, oh, you know what? I think on this water damage job or smoke damage. Right? Smoke damage is a perfect one. Someone asked about fire earlier. A dry fire smoke cleans at a rate of one. A wet fire smoke cleans four times slower. What type of job are you doing? Oh, I used unit pricing, and I came up and I charged this, but you’re actually doing this. So all of a sudden, you lost dollars. You should have charged four times the amount for the clean, but you use the dry cleaning line items. Here’s the secret. There’s no wet cleaning line items. So your estimating system is built by people that haven’t restored property, because you would know you would need a wet cleaning line item because it’s a different clean. And there’s different light, moderate, and heavy wet cleans. That’s my personal gripe. Operations. You have the wrong people in the business. Right? So you have the wrong people at the wrong spots. They lack skills. So if you don’t have trained people the the biggest shock to me was the amount of dollars I left. I took a training. My training, I took tiered out for, like, about five years. So I go, I’ll take my training. I’ll get a little bit here, and I’ll I’ll take two courses a year, and I’ll get all the training I need. I wish I would’ve went back and, like, powerhouse my training and focused on the business differently when I started because when I got to the end, I got to color repair and and carpet repair and color repair. So carpet repair and color repair were my last two courses. And I was like, oh, **** it. I walked over so many rolled carpets that I could charge a ton of money for. Oh, I walked over pet damaged carpets and stained carpets. I could have made a ton of money on those jobs. That was added revenue. That was lost dollars that went away from my business. Okay? So that’s what I look at is, like, things that you don’t know. If you like if you want a good example, it’s like, let’s say that we’re we’re all restores, and then tomorrow we all wanna go make T shirts. And so we have a T shirt manufacturing plant. We would have no idea where we would lose money in T shirts, like, on the screen printing or, like, the sewing. I wouldn’t have an idea where I would lose money. And so someone who made T shirts for forty years would be like, yeah. You don’t do that because you lose money here. Same thing happens in restoration as you walk over these dollars, and they’re sitting on the jobsite, and they’re earnable dollars, and you just walk over them. You run out people and equipment. This one kills me. So we had a tracker on of how many time how many days we went zero zero gear in the in the shop. Every time you hit zero gear, you lost money. So if you were in a job or you were in a surge event and you had ten days with zero gear, our team would come and track like, hey. There was eight jobs that came in. Okay. Eight jobs. Average job is six thousand dollars. Wow. That’s lost revenue that we lost. Like, we you don’t see it because you have to track it, and it doesn’t show up in your bottom line. So at the end of the year, if you missed your profitability by by fifty thousand dollars, how many days did you go zero gear? So you have to watch out for that. And then the other ones missed opportunities is, like, you choose the revenue streams. Now I’m not gonna talk about TPA revenue streams, but if I was doing residential and I looked at it and went, hey. There’s actually more money in these this commercial carrier. Hey. There’s actually more money in the industrial carrier. If I did specialty drawing, I could make a lot of money, or I could sign up with somebody and take the lowest price that they’re offering me. It’s just if you do that, typically, it’s that you’re looking for revenue volume, and you don’t know how to go market it. Right? So your marketing is like, hey. The easy thing is let’s call them. And so there’s a discount. You’re paying a t p a discount so that they can help you with the paperwork, and they’re gonna give you some volume that you normally wouldn’t get. That’s a business decision. That’s not a bad thing. It’s not a good thing. It’s just when you look at how am I gonna build a profitable organization. I’ll show I’ll show you later when we get to profit why why I would I would just consider how I run a business a little different. Increasing charge offs. So if I look at it, it might seem hard, but this is where I invest in good people and train them. So use standards and laws. It takes a bit to understand this, but IICRC and OSHA is the standards and the law. If I have a green person who’s come out of selling cars last week and this year this week, I think they can be a good project manager. It happens, and it’s not a bad thing. We we will hire good people. Can they capture a hundred percent of scope? Excuse me. Can they capture a hundred percent of scope using the IICRC and OSHA? And then ASHRAE and other NADACA, can they use all the different standards out there to articulate the cost? No. They can’t. They’re they’re too new, so they don’t know how to charge out more. Do you go in and size your jobs correctly? Well, a lot of restorers still go in and go, oh, it’s four air movers, one one dehumidifier, you know, three in a room. It’s crazy. You could have, like, nine air movers in a room and maybe one dehumidifier, and it’s a larger dehumidifier. Or you need two two larges in there. All of a sudden, if you don’t size your jobs right, those are lost dollars. They’re gone. So you need to charge more for them, and this comes back to your lost dollars, or it’s all about charge out. Change orders. This one kills me, and this one we do all the time. Change orders are an administrative task. And when we look at the change orders, change order is a tool that you should be using on a regular basis because change orders increase revenue. If you don’t have a change order process, it’s because it’s administrative. And why do people hate administrative tasks? Because they’re burdens to the mind. We have field workers in the field. Like, I love our technicians. They’re out in the field doing real work. Right? They forget paperwork because it’s not important. The important thing is getting the drywall torn out or extracting from the carpet or putting back the wall that’s there. So they focus on real work, which makes perfect sense. Right? And that’s why sometimes it makes sense to have a supervisor who’s your paper person do all the paper. Oh, insurance companies don’t like paying for supervisors. Well, that’s how you bill because the people that you have doing the job, one, don’t have the experience to know what to do. They may know what to do, but they don’t know how to document it. And so you need that supervisor in there to articulate what you’re doing. And they may be disconnected from how we charge. And so that was one of my problems. I didn’t tell my team how we made money. I just told them what to go do. So when there was things that they had to do that would deliver profit to our bottom line, they didn’t charge for it. They just did it. So they did the work. We incurred a cost out of our bottom line. Different definition of charge out is just how how are you charging out. So your charge out could be your hourly rate is ninety dollars. A charge out is did you detach blinds? That’s a charge out that, oh, I know we never charge for detaching the blinds or the curtains. Well, you you should because otherwise you’re getting them dirty and then you gotta deal with that after. So increasing your your estimating items would be another way of saying it. But standards and laws, why do we refer to them? And that’s because they’re very powerful things. So when I do expert witness work, if I get called in by insurance company, a restorer, or a homeowner, I just look at the standards and go, that’s what we’re expected to do. And if you don’t have the training, if you have a three day water course and you go up against somebody who has to review your file, you’re on for the whole hook. You’re on for all the courses that you didn’t take, and you’re on for the standards. And if you don’t know that, you’re in trouble because they’re powerful because in court, that’s what a reasonable restorer is expected to do. They provide you support and justification. If you’re on the wrong side of it, they’re gonna tell you why you didn’t do it right. So they provide support and justification to someone else saying you did it wrong, and they’re not your opinion. They’re they’re they’re based on restoration, then you can apply opinion to it. Like, this is what a normal restorer would do. In this situation here was why they changed their mind or why they did something a little different. It was an opinion. Is it reasonable? Yes or no. Now the reviewer may challenge the interpretation, but they would then have to come back with, like, okay. Well, I know you quoted OSHA, and you said that based on OSHA, there’s a respiratory control plan, but I think that it didn’t apply on this job. Okay. Based on what? An opinion, or do you have something that you can show me in writing? And that’s how you can you basically get prepared to go to the legal process. Now scoping is interesting. Scoping is where most restore leave about five to ten percent of the scope on. So you worry about reviewers taking one or two percent off. You leave anywhere between five and ten percent on most jobs. When I sat in the review desk for insurance carriers, I watched estimates come in missing, like, complete doors. They have door trim. They have a doorknob, and they miss the door. Two hundred dollars a door times eight doors? Yeah. That’s on you. Right? And so we’re talking to the reviewer. We’re like, hey. An ethical review is they you know they should have charged for doors. You gotta call them and say, hey. These doors are missing. If it’s a two way if it’s an honest peer review, you’d be like, this is what you need to charge me. Here’s what you can’t charge me for. Here’s how I don’t wanna see it. Right? But when you look at it, scoping is is one of the biggest hits that you can do to yourself is you just get incomplete scope. I would rather a I would rather a project manager spend twenty minutes more a job and get the proper scope on-site and capture two to three hundred dollars more per job than I would, right, having to go out and do ten or fifteen or thirty thousand dollars more work to make the same money. Like, the reality is is whatever your margin is, you’re gonna find it on the job, and and it’s probably for things you’re doing anyway. Like, scope of work is probably things that you’re gonna do that you forgot to charge for, so it comes out as a double edge. Right? You didn’t charge for it, but you eat the cost on it or your profit. So if you have low margin, it usually comes down to an estimating issue is the first place I check, and then it’s an operations issue is the second place. You make and lose your money in the field. Very little money is made in the office. Most of the money is actually lost in the office, but you make and lose your money in the field. You’re making and losing your money where your teams are documenting or not documenting what you’re doing and the work that you should perform or could perform, but you don’t perform. So you could perform a carpet repair in a house, but you don’t because you don’t know about carpet repair. Right? I I cried when I watched on, like, how many floors I walked over that have bleach stains. And I was like, oh, I learned the skill. I could’ve charged, like, three hundred dollars a stain for that, and I could’ve helped these people. Or you see the rolls in the carpet. You’re like, what? I could charge them a thousand dollars to, like, fix that carpet. I literally tripped over those and didn’t make that money. So that’s where you have to make your money in the field. Now increasing charge outs, here’s just like my quick list of things I look for. Detaching and resetting blinds. I had an air mover pointed at the bottom of a counter, and our technician has set it up, and we were bouncing a blind off a window for five days. The blind got damaged. The window got damaged. We had to replace both, and we had to replace the matching blinds. So I could have made three hundred dollars on detaching the blinds or or sorry. A hundred dollars on detaching the blinds. I could have saved the window replacement, and I could have saved the drape replacement or the blind replacement. But instead, I didn’t I lost a hundred dollars, and I lost all that cost. Right? Could have easily we got some paid for for detaching blinds. Covering registers. If we’re doing a a water damage and we’re locking out the heating system, cover the registers. That’s five dollars, six dollars a register. Easy money. Cleaning the HVAC unit just used to be standard. It’s not standard anymore. What we start to see is that cleaning HVACs used to get done at the beginning and at the end of the job. You might not even see it on a job now, and that definitely doesn’t follow NADACA standards. Cleaning glass after final repair. So you or after final clean, you do a final clean, and all of sudden, all the glass is forgotten. So a final clean I’m just gonna throw a number. Was like, let’s say it’s thirty cents a a square foot. But then to clean the window is another fifteen dollars or ten dollars, and you got six of them. That’s sixty dollars that you just left on the on the table. Someone’s gonna clean that window. You know they’re you’re gonna incur the cost, but you didn’t get the charge up. Power cords and adapters for spider boxes. So the you got the the heavy duty cord is, let’s say, forty dollars a day. Don’t know what the real price is, but let’s say it’s forty. And then the little power adapter to go into the converter, that’s forty or fifty dollars a day. So those two cords plus the spider box, you’re leaving that revenue on the table. You have to replace those cords occasionally, but that’s just revenue. And you spent five hundred dollars on those cords. They should generate an ROI for you. Wall and floor protection. So almost all estimates, when you look at at estimators that are not trained to make money, they’re basically what they’re looking at is they’re looking at the loss and not all the areas that you have to draw to get from the front door to the loss. So it’s like the front hallway and then through the kitchen and down the stairs, and now you’re in the loss. Well, you have to you have to do site protection there, and probably you’re putting in and taking out site protection every day because the homeowners are still living upstairs. That’s a lot of cost coming out of your bottom line and no revenue going into the hopper. So your margins drop, and then you’re like, well, but on water damage, we did fifty points instead of sixty five. Yeah. Run those numbers and see what your bottom line looks like if you were to charge for it. PPE on cat one, when you have people that are like, well, it’s clean water. Okay. But we have a category one loss, and we’re gonna put in a sixty mile an hour wind into that into that room. We have a particulate increase. Did you have a respiratory program to prevent respiratory contamination? Well, then you would have PPE. Now maybe you’re not wearing full Tyvek, but you would have dermal protection, so Tyvek would be justified. Eye protection, respiratory protection. What’s your site safety assessment say? Well, PPT on cat job or on cat one jobs is is totally justifiable. Precleaning, it’s in the standard. Totally justifiable. Why would I not preclean? They didn’t expect us to come in. We’re gonna dry out a bunch of that soils that got surfaced. Why would you not preclean the carpet before you dry it? Makes sense. We’re extracting. We’re cleaning, and then we’re gonna dry. Why dry a dirty surface? That makes sense. You’re literally making the the cleaning process harder later if you don’t preclean. And then ATP testing. This one’s a little controversial for some people, but ATP testing before and after your cleaning. You have to follow a little bit of a method and and and justify it, but I would do it and justify, hey. Here’s what it was before. Here’s what it was after. That’s how clean we did. That justifies all my cleaning process. Sizing your jobs. How much equipment are you putting in? Well, I wanna earn profits faster. So I want more equipment in, legitimately more equipment in so I can earn my profit faster. I can improve the quality of my drawing. I can save more materials for the customer. I cycle my jobs faster. So when I have Chinese gear, if you got poor quality gear, I’ll just call it poor quality gear even though I call it Chinese gear. If I got poor quality gear and it takes eight days to do what good quality gear does in four, I have to babysit a job for eight days. I have to have eight days of a gear for every job. I have to have that much more gear. But if I have high quality gear, I can get it in and out. And most of us aren’t charging, you know, ten days of rental. Most of us are getting the four or five days because that’s what the program you signed up for pays. But if you do get the the extended time, I’ll earn my dollars the right way. I’ll dry that building, and I’ll have my readings, and they’ll support my drying, and I’m using good gear to do it. I’m not changing my gear out. Yeah. It just doesn’t make sense to me. And then you wanna identify early and delayed drawings where you need more power. So if I need more power to dry a job and it’s like, hey. I can save a lot of money here, but I need more power. I can have that conversation on day one, not on day six. Right? And if the decision is, hey. Don’t put in more power. It’s just gonna be longer to dry. Then we have that conversation. Now I’m not getting paid for three. I’m getting paid for six days. So I’m increasing my revenue, still using my good equipment. The IICRC talks about in the standards. It’s just very quick touch on here. The I the sizing if you said I size it according to IICRC, that’s the starting point. And so if you use �Թϲ����� Hydro, says, hey. Here’s the sizing. It’s this many air movers, this much dehumidifier. Once you start, that’s your starting point. Then the conditions dictate how you’re gonna charge. So if I said I’m gonna keep my temperature between seventy and ninety degrees, I’m gonna have a dew point differential. Meaning, I’m not gonna I’m gonna be fifteen degrees or ten degrees away from condensating the walls. Now I’m now I’m building a drying plant, and all of a sudden, I can justify that I want my relative humidity between fifty and zero or fifty and thirty. So if my relative humidity gets to fifty five, what does that do? Justifies another dehumidifier. If my temperature is is seventy and I need it higher, I can justify a heater. If it’s too hot, I can justify cooling it down. All of a sudden, I have all the justification for all the equipment I need to put in. If I have painted walls, I’m gonna justify putting in an inject to dry. Hey. This house is thirty years old. I’m gonna inject to dry the walls because I got a lot of paint on the surface. You’d start building out your charges based on the equipment you can place in and the work you’re doing, the quality of work you’re doing. In there, if you didn’t do that, you miss revenue. Breeding support the removal of equipment. So if I start drawing, I had a a court case that I was an umpire on. They I guess, not a court case. It was a dispute resolution. They went to look at how much equipment needed to be there. And on the Friday, you could have justified them, like, breaking the site down and making it smaller. But I just went, like, the cost of doing that versus leaving the equipment running was about the same, so it didn’t make sense. But in a bigger job, it might make sense. So you would then justify removing your equipment. And then stabilizing versus drying, it’s a it’s a game changer. And for those of you who dry out category two and three jobs, you’re doing it wrong. So you would stabilize, clean it, then dry it. Right? If you were waiting for an insurance carrier to come up with a decision, you would stabilize, wait for the decision, and then dry it or clean it and then dry it. So stabilization is another area that most restorers don’t even charge for. They don’t even know how to charge for it. Change orders, that administrative process that kills you, when would you use one? Right? When would you use stable or change order? Time. We’re gonna have a time difference on here. Price. The price is changing. We have a quality issue, a quantity issue, so we can’t get porcelain or marble, but we can replace it with porcelain, lesser quality. Okay. Well, we need a change order. You get a credit back of, like, two hundred thousand dollars. The quantity. The quantity is now changing. Well, if the quantity changes, does that impact your price? Does the customer have to pay for more of it? What if the schedule changes? We can’t work during the day. You have to work at night. Well, I have to charge you more for that. So the schedule now dictates a price increase. Material. We were gonna put in tongue and groove pine, but all we can get is tongue and groove cedar. So we’re gonna change the material. That’s the quality, or it’s just changing the material. And in addition to subtractions to the scope, hey. We’re gonna add another room of carpet cleaning. Like, this is the one that kills me. You’re cleaning the carpets of a water damage, and the rest of the basement’s not getting cleaned on the final clean. Do all the carpets. Add a change order and say, missus Jones, would you like us to finish up? Like, normally, this would be five hundred dollars to clean your carpet, but we’re here already, so we can do it for three fifty. Would you take three fifty? You know why? Because your team’s probably gonna clean the carpet for missus Jones anyway. So do the paperwork, get paid for it, take it off your cost, and put it into a revenue source. It’s just get aggressive on sell upselling your jobs. And why do staff hate it? Well, they hate paperwork. They hate confrontation. They hate negotiations. So I had staff that were really good at this where they would, like, easily run change orders. And what it is is missus Jones, the insurance company will only pay for one wall of painting. If you want the other walls painting, I can do it for three fifty. That is a good solution. Here’s a change order. The other way is, missus Jones, the insurance company pays for one wall. I can do the other three for five hundred dollars, but that’s what we normally would charge. I can do it today for three fifty. Would you like that? And then we can just have the painter do it all while they’re here, and your house will look fresh. And you could submit that to your insurance company and see if they’ll pay for it. But if they don’t, you know, you’ve got all your walls painted. It’s not negotiation, and it’s not hard. It’s just framing it so it’s easy to sell. Just make it easy for your technicians to, like, get you more money. And in some cases, just get your cost covered, and it’s already a win, but I think you should make money on that stuff. Right? Alright. Let’s do this poll. Based on this session, from the break to here, where do you think we sit? How much revenue do you think we can charge? One, two percent more, five to eight, eight to ten, ten or more? Right? Nothing I recharge too much. I love it. Right? Like, you might you might already be implementing these these strategies. You’re like, I don’t know if I could squeeze more. I guarantee you could. There’s a ton of ways that I wish I would have skinned my restoration company. Even in my big year, we we we left revenue. I had equipment sitting on shelves. I had services we weren’t doing that was easy to add to our our roster. It just totally changed the game. Alright. We got a few more people coming in, and then we’ll we’ll shut that down. Then we’re gonna take a break. Take another, like, ten minute break, and then we’ll we’ll we’ll pound through to the end. Alright. We got two to zero to two percent. Hey. If you put two percent to your bottom line, you’ve already increased on a five percent average, like, thirty percent more money in your business. Two to five percent, you’ve doubled up. Five to eight, you now have done way more than double. Eight to ten, so twenty five percent of you think you can get eight to ten or ten or more. Eight eight or more percentage points. I don’t disagree with that. It’s just how we look at it. And when you deal with TPAs and insurance carriers, a lot of the times the review process they put us in sets your mind as, I can’t do this. I had project managers that were working on one program, so they’re like, well, we can’t charge emergency service call out. And I’m like, well, that applies only to one insurance company. Nobody else. Well, yeah, but they don’t pay for it. Okay. I don’t care. That’s a rule. That’s an agreement that we signed to get their work. Everybody else pays it. Charge it. And you had to break that mental lock, and so that’s where you lost dollars. We didn’t charge emergency service callouts on eighty percent of our business that we could. Well, that was three hundred dollars a loss. And then you times that by two hundred losses, and all of a sudden, it adds up to a lot of money that would have eroded our ten percent loss to, like, maybe six percent loss. Doesn’t take a lot to get there. Yeah. And and and, Mark, some of those upcharges, document the upcharges. It’s like some of them is upcharging the customer. They had a laminate counter. I wanna sell you a solid surface. Would you like that? You’re already getting a two thousand dollar discount on it, And I and then you can add more margin to the counter and make a little bit more money too because they’re using insurance credit. It’s like it’s like a coupon. Right? Think of, insurance companies as a coupon. If you wanna upgrade to hardwood floor, you have a four thousand dollar carpet coupon you can use. Would you like to upgrade for six grand? Upsell it and make your margins. Alright, guys. Beautiful. Awesome. Well, you know what? I have a bunch of questions for you, Chris. But first, how great is this, everyone? How are you feeling about it? I’m thinking, like, I’ve got I’m not a restorer. I’ve got so many great ideas just from the first half. So really looking forward to, getting through some more stuff. So first question, is an example question. So instead of going with exact default pricing for containment per square foot, will insurance adjusters accept the line, sorry, the line item change for changing it as a roll plus a fifteen percent upcharge on acquiring this item with a note explaining why? Yeah. So it comes into your contract. Pricing schemes or pricing you you call this scheme. Now it it may sound scammy, but it’s not. An insurance company has a pricing scheme. So a scheme is a program that you come up with or or a strategy around your pricing. If your pricing is like, I’m gonna charge an exact mate line item the way it is. That is a scheme created by a software company based on their knowledge or how they were running the idea around that one item. You could have a totally different scheme. You could go, like, I’m gonna draw a building at figure out all the costs, nine dollars a square foot or ninety cents a cubic foot, and that covers all the equipment and all the consumables required to do a job. And that scheme wouldn’t be like, well, what would the adjuster pay for? Well, that comes in negotiation. So if you’re doing work for an insurance company, then you would be like, well, that’s not how they accept charges because I signed a contract with them. If I’m working with the homeowner, I’d be like, hey. That’s just how we charge. And so this industry is different. It’s like, if you were to buy a cell phone back in the day, you have a monthly unlimited plan, or you can pay by the minute. No one’s telling them, like, hey. When you charge by the minute, you gotta charge me your cost plus a percentage. It’s like, no. You use a thousand minutes. You’re gonna rack up a big bill. You could have paid for the unlimited. So it’s just a it’s a scheme that you build. And where I get I I think a lot of people get tied in is that we’re because we’re so close to that insurance market, a lot of what they say, even though they don’t know how we make money and they don’t know what we do, like, they’re not trained in what we do, but they say this is what we pay for. But that’s not how it works typically. Like, the the policy is not that definitive. It doesn’t pay for this charge, but this charge, it’s your it’s your program rules that make the charges. So it’s kinda hard to answer it in that context of, like, what would you do? Because it depends on what are you doing with the rest of your pricing. So if you’re gonna go in and charge consumables times a forty percent margin, and you’re like, I’m just gonna buy it, and you’re gonna pay forty percent over everything I do. That’s kinda like rate and material. If you go in with the unit price, you’re like, hey. I’m gonna raise the price of my material on the back end to account for the profit. That’s a different way of doing it. So it’s just it’s it’s a more complex question than that. But the answer is if you have a good relation with the adjuster and that’s how they wanna see it, you could do it, or you just be like, I don’t care what the adjuster says. I’m giving my invoice to the homeowner. It’s a different conversation. It’s hard to have it here. Like, that’s a really complex question, by the way. Like, really there’s a lot that goes into building out to, like, getting to the number. Yeah. For sure. And as another question, as people who have ever only used Xactimate as the standard for insurance work, are there good alternatives to bidding out work that people are using for recon? Yeah. So, again, Xactimate is not a bad tool. It’s just so the tool itself let’s say if we just talk unit pricing because there’s the next gear or not next gear. There’s the core logic version, Symbility, or or whatever they call it now, and then you have Xactimate. So those are, the two main tools. And then you got T and M Pro, so time and material, which hard to do. You know, that’s that’s just where you’re charging for a rate schedule. But if you already use unit prices, unit pricing is just one of the more complex systems, and we have two digital systems that have tried to digitize it. You could use a spreadsheet and come up with your own assumptions. And so all unit price is is it just comes up with a cost. A bid is a bunch of unit prices combined together to come up with a giant number, and so it’s just an easier way to do it. Actually, exact where’s model is not a bad model. Where everything falls apart is between the price list and how people think they should use it. That’s where it falls apart. The model is actually a good model. It’s it’s a sound system for, like, ninety percent of the things you do rebuild. It’s a sound system. It’s just how how pricing’s dictated to you. It was never meant as a as a a price list. It was designed as an estimating system, like a starting point. So the way it’s being used right now is, like, that’s the price. That is the wrong way it was supposed to be used. Their user agreement says it. There’s, like their their original way that it was used was not built that way. It’s just unfortunate that we have an insurance industry who dictates pricing, so a lot of people get into that rut. And, and it’s it’s not even inside those insurance programs. It’s not even right on a dictation because, like, you can’t do it. What are you doing? Get a sub trade quote or just change the pricing. And you’re supposed to change pricing. So how can have Go ahead. How can we have documentation for the additional equipment for TPAs? And what if TPAs say they’re not going to pay for the PPAE on a CAT one? So, again, it comes down with the contract saying. That’s where a contract’s pretty vague. I haven’t seen a lot of TPAs that’d be like, yeah, you can’t charge for what the law requires. So if you but most of the time, here’s here’s the breakdown. Most of the time, we don’t document at the beginning of the job saying, here’s the job. Here’s the risks. Here’s the hazard assessment. Here’s what we need to do. If you tell somebody, I’m gonna have to protect my workers with PPE, and then you do it, it’s an expectation. If it comes in at the end, it’s a little bit of one of those things like it was like an afterthought. And then did you actually do it? Because then we see charges for PPE and you see people wearing T shirts. So you’re like, well, there’s a little disconnect there. You should have done it, but you didn’t do it. Part of it is is is documenting that you did do it. So I don’t like having to do it, but that’s the industry we’re in. If a TPA comes back and says, no. It’s not required. Well, by law, it it’s required that those workers are protected based on a site safety assessment. So now it’s now it’s a business decision, and you’ve signed a contract to do work with the TPA or your business signed work a contract with the TPA. It’s you pick the client. If you don’t like the rules, leave. Like, it’s it’s pretty brutal that way, but that’s the way it is is go sell your own work, and then you don’t have to deal with other people’s rules. Awesome. Thanks, Chris. Do we have time for two more questions? Yeah. Let’s give her. Perfect. So how do you charge for stabilization? Stabilization is just like so normally, it’s just the equipment in. You have a you go in. Let let’s say let’s say it’s let’s say, in this case, it’s an insurance carrier that wants to look at the job. It’s a category one job. They wanna look at it and determine if it’s covered. You put your your your dehumidifier in place, and you take a relative humidity and temperature reading and be like, hey. We wanna keep it between seventy and eighty, and we want the humidity less than forty. We put as many dehumidifiers in as we need to get it between seventy and eighty and about forty percent relative humidity. We’re not drying. We’re not doing anything else. Our documentation says we’re stabilizing. Now the problem is is that equipment that you have for stabilizing is the exact same equipment you dry with. So to an adjuster who’s not trained, they don’t know the difference. So you sometimes have to you have to educate them and be like, this is what I’m doing. I’m just preventing secondary damage where, like, the the papers on the wall or the photos aren’t gonna curl because of the high humidity levels. I’m gonna stop mold growing on the unaffected materials. That’s all you’re doing. So you just gotta communicate it, and then you just charge. And and what we would normally do is charge it as a separate, like, estimate or a separate invoice. So it would be just stabilization for four days, and it’s let’s say it’s three grand. Then we do our drying or our cleaning and drying, and then we do the remediation, and that’s whatever bill it is. That’s how that’s the best way to do it. And communicating. We’re gonna stabilize, and the burn rate per day is about six hundred dollars in gear. Well, I should get on that file pretty quick. Well, you save yourself some money because I can go ahead and then start doing the job. Perfect. Thank you so much, Chris. So do you charge the customer for a change order that is an option they want they wanna charge? Do you do you charge the customer for an option? Yeah. For a change order that is an option that they want to charge. I’m gonna say so I’m I’m not quite following it. I’m gonna say yes. Is if I had something that I was gonna put a change order for something that I was doing for them, and then I’m like, hey. I’m gonna charge you for this. This is what I want to charge you for. I would put that in. I’m I’m maybe I’m lost on the question. No worries. Tim, actually, if you wanna put in a clarification question, I would be happy to circle back on it later. Thank you so much. Hey. Can I hit can I hit one can I hit one of those I I gotta say two exact to make questions in the I see a Verra’s stance on OMP? Would you disagree with Verra’s stance on OMP versus job related overhead as outlined in the white paper. And then I have another one from Blaine. Hey, Blaine. How’s it going, buddy? I feel our industry is imprisoned by adopting exactly me. So I I I like Verisk’s attempt at explaining overhead and profit because it’s actually the right way of looking at it based on how they built the price. So they built the price saying that overhead and profit is is an add on, and their overhead and profit doesn’t include project management and toilets and other things that are related to the cost. You have to charge that out extra. The insurance carriers are like, no. That’s included. But you as the restorer would make your own price and say, well, I’m either adding to my techs. Like, I’m gonna charge a hundred and twenty dollars on every technician and that covers project management. Or you’re like, hey. Some jobs require project management to be charged out. Like small jobs where you have ten hours of project management, it’s a bigger percentage of the job value. Whereas if you have a bigger job but still takes ten hours of project management time, it’s a smaller percentage. So it it it’s a pricing scheme, and then you’re like, do you agree with it or not, or do you wanna change it? And the beautiful part about ExactRay is you could change it. Now do I like their white paper? I do. It hasn’t been updated recently, like recently, but I still like it because their system hasn’t been updated. So it it it fits. You’ll see that as an expert, we’ll use those white papers to explain things. I like their terms and and cons, terms and conditions on their services. It it explains what the intent was behind it. So, the other question that Blaine is, like, does it imprison you? Well, no. It’s just we as restorers sign deals. So the TPA question before, if we sign that deal, we devalue the the service. I’m I’m not saying it’s right or wrong. I’m just saying that inside the the program, we use exact and not T and M. T and M, you set your own rates. Exact, you could set your own rates and build a completely different price list. We train that. Like, I I will go in and we’ll build a whole different metrics on pricing, but it’s how do you wanna build your pricing scheme before you get into it. And it’s all about, like, building a strategy around price so that you can service. Like, if you were doing white this is just sorry. I’ll I’ll I’ll get into the presentation. If you were doing white glove service, you’re dealing with billionaires. You don’t deal with, like, a norm you don’t deal with normal homes. You deal with billionaires. If you were to go in and say every piece of equipment gets hand wiped and wrapped in white shrink-wrap, and every piece gets delivered that way, and that’s the white glove service, and I charge x. Well, I would then charge for the time to to clean it. I charge for the time to wrap it. I would charge for the extra carrying and handling of it. Presentation has value. It’s marketing. All of a sudden, my pricing scheme is different for billionaires than it is for the average Joe. And my expectation of service is gonna be higher, so we’re gonna provide more for that value. So it comes into how are you providing value to your insurance carriers, and do they value the work you’re doing? And those that cut your bill heavily don’t understand the value you’re bringing to the service. So you have to make a business decision if you wanna do work with them. And I’ll just leave it at there because it it really is about what’s the value for what price are you being paid. And then we’ll get into profit, and we we’ll we’ll talk a little bit about that. I said I’m not gonna get into volume, so I spent a little bit of time talking about volume in the in the past presentations, and it it really doesn’t matter. The only thing you need to know about volume is if you’re looking at, like, Walmart and IKEA, and you said these are, like, successful low margin, high volume players, can restoration be low margin? So TPA example. That question is perfect example for this. You’re gonna be a low margin mitigation supplier. Now if we look at IKEA and and Walmart, they control everything from the manufacturing. They have special deals with the manufacturers that they get certain goods delivered at certain price points. They know when things are gonna be delivered. They own the distribution channel to get things delivered. They know season analytics. They know when they’re gonna sell. Christmas is gonna be busy. Summertime, we’re gonna move this product. They have so many analytics and so much predictable patterns, and they can affect it by advertising. You are reliant on weather and accidentals. You’re gonna do a hundred to five thousand claims a year, not taking like the big guys like Belfor First On-site. But even they, their work is spread out across the states, and they have to mobilize to different spots. They don’t have a distribution chain to get it there. Neither do you. So a hundred to five thousand jobs a year is not enough to get that volume scale so that you could be like, oh, I’m gonna be the lowest price in the market. If they can’t do it, how can you do it? If the big guys can’t do that, how can you do it? Just gotta ask yourself that. Is that what effectively we’re doing is we’re taking the low volume or the high volume or the low margin approved because we don’t know if we’re gonna get the volume. We signed the deal that will take the low price, but we don’t know if we’re getting the volume. And so that’s the problem is it’s really hard to sustain your business in this and continue to grow your business and continue to invest and continue to get the best staff. It doesn’t normally add up, but it is a play. And so it can work. What you need to understand is how your business scales. So when we look at this, and this was a talk that that you’ll see in any business seminar, but in our business, there was a discussion that happened a few years ago between myself and a consultant, and I I disagreed with them. So when I look at this, every time you you build a business, you build it to a certain percentage, and then you have to reinvest into it. Have to hire more people, and you have to get to the next level. You have to increase the size of your shop at certain stairs like this. So as you start building your business, the goal that you have is to build the business and stay above the line of your cost. And so the yellow boxes is our cost. Now when you do this right, you can build a sustainable business, and it scales. And every so often, you’re gonna hit these blocks. And if you don’t know that, then what happens is you try to make money at a time when you’re you’re pushing the limits. Here’s the crazy part. If you’re running a low margin business, you can make money when you’re small. So that question about the TPA, like, hey. We’re just starting out, and we wanna get going. Hey. Guess what? You probably can make money. But anytime you go to scale after that, you’re gonna hit this wall. You don’t have the revenue to invest in your business, so you’re gonna have to borrow tomorrow’s dollars to pay for your scaling up. And what happens is you only make money in the gaps in between your scale. Now it’s not really linear like this. They’re not straight edges or curves. So there’s only gonna be a sweet spot, and you when you lower the margin, you lower that sweet spot on that curve. So when you start to look at this, you’re like, oh, that’s why I was losing money when we went to scale is because we actually had low margin, low profit, and we didn’t have the money to pick it up. Guess what happened when my business tanked? I didn’t know it. I didn’t recognize it. I was there. That’s where my business was. Our margins dropped, and we were scaling. And so I got stuck for a year in this two million dollar about to go to three. Like, I was I actually had built the company to do four or five million. And I was like, oh, yeah. Well, because we we did two this year. We should, like, do two point eight next year, and then we’re set to get to five. And then we got suspended, and then we went and found new revenue. But by the time that revenue came in, we were already too late. That’s what happened. I got stuck at one of these growth areas where we were reinvesting in the business, and we couldn’t afford to. Well, if I would have increased my margins, I would have not experienced that. It would have been, like, breakeven that year. And that’s what you see here where that line touches that that corner. I would have broke even at that two million, two point one million dollar mark. Now if I drive those overheads, we talk about people. If I get my team skilled up and I get my investments into, like, technology and I put it into, the hardware and software, and I and then I buy the right tools to get my people out. If I can do that, I can get more per per project manager or more per project manager, more per PMA assistant, more from my operations team. If I can extend how much revenue we can do with our same overheads, what I can do is I can push that out. I can push those costs up, or I can push that step up further into the future. When I lost money in that two million dollar space, I actually would have made a little bit of money or I could have broke even because my cost would have come when we went to, like, two point five. Now what’s crazy here is that would be what your business is. It’s like you have really good years. So then the the then what happens is the companies that are doing, like, two, three percent on our survey, are you in one of these growth areas? Like, you like, oh, man. Two, three percent . Unless you’re right at, like, that peak where you just invested in your business. You might be a highly profitable company last year. You might have done, like, ten, fifteen percent last year. Now you’re at two, and you can’t figure out why? Because you just reinvested the tar out of your business. And so you’re at one of these growth points, and your margins have dropped, but there’s only gonna drop. Next five hundred grand, you’re gonna get back into good margins. So if you don’t understand that about your business, you’re like, oh, no. Every time we scale, we lose money. No. That means you’re not making enough. So if every time you scale, you lose money, you’re not making enough money. You’re not paying for tomorrow’s survival. Now here’s the crazy part. Good businesses go broke because they get caught in that scaling. Let me show you something here just to give you an idea. Right there. I had a consultant friend of mine come back, and he said, hey, Chris. I got this business. They’re doing, like, six million dollars, but they’re losing four hundred grand a year. I said, really? For how long? He’s like, years. My god. It’s a ton of money. Gone. What happened is they were at the five million dollar my my five million dollar benchmark. They got stuck at six. They had low margin, and they were stuck at a growth rate. They didn’t have enough volume to get past that break. They didn’t have enough volume to cut to that next level. So they were stuck there for two years. Their revenues didn’t go up very much. And he’s like, I don’t know why they’re losing weight. Like, but one, they’re estimating as ****. They’re not charging enough for the work they’re doing. I can see it because it’s low margin everywhere. Two, their overheads are ridiculous because they’re growing. And three, they haven’t moved. They never grew. So they’re stuck in this this spot where they were losing a ton of money. Had they downsize the business, they would have found profit again. Right? They would have dropped the size of the business into the profit mark again, but they didn’t. So we reviewed the company. I’m like, yeah. Their estimating is broken. Their structure is broken. You can see it clear as day when you look at it this way. Does that make sense? Like, if you ever had the business, you know, man, this year should’ve been a, like, a rocking good year. You probably got stuck in one of these cost points where you were expanding and you weren’t thinking about it. You’re just like, oh, I’m expanding my business slowly. And then you’re like, oh, man. Yeah. That’s what happened. You get stuck at these these pinch points. And if you get stuck there, there’s a drought, you overspend, you’re now tied into too many leases, you’re screwed. Like, you’re gonna lose money, and that’s just how it’s gonna be. If you can drive that efficiency into your business, you can avoid those pinch points, and that consistency drives profitability. And that’s the biggest thing. Consistently managing your business is gonna drive that profitability. So if we’re focused on it, do you wanna take a business from ten percent net profit to eighteen percent net profit, it’s not greed. It’s I wanna scale my business. Like, we looked at our profits, I was like, we’re gonna take money out of the company. We’re like, oh, now we go buy another hundred grand a year. And that hundred grand a gear should make us another four hundred grand next year. K. Let’s scale it. And then we can go hire those better technicians. I can get an operations manager, but you can’t do it if you’ve made three percent. Like, you’re just not you know, like, okay. Next year is gonna be pretty much the same as this year unless I do something different. And sometimes it’s hard. I get paralyzed by financial pressure. I just don’t like it. Give me a business that’s running smooth, and I’ll I’ll toy with it, but tell me you were run out of money, and I just I don’t like it. It’s just not my sweet spot. If we’re making money, I’m good. I’ll manage our dollars, but I just don’t like to be in a position where we’re we’re we have no wiggle room. We have no investment room. When you’re there, it’s hard to mentally get into the game. I’m gonna drop into this, guys. This is the profitability calculator. So I do this part. You guys have got sent a copy of this. I’m gonna show you how this works. It’s just it’s a mind exercise because when you leave here, you’re gonna go, you know what? There’s a bunch of things we could do. And I love that you guys put, like, we’re gonna get six, ten percent on it. Don’t shoot for that. Let’s go in. And so here’s how you use this this calculator. It’s in Excel. So you got the cover. You got you got a good looking guy who is thinner. Then you go in here and you go current net profit. What you put in here is what you’re achieving. So I’m gonna still use today’s numbers. So we don’t have to put in, like, make believe numbers. We’re just gonna say today’s average was five. And I think our revenue for the company was three million. So we would say our net profit at five percent, we we we’re doing three million dollars of sales. It trickles down through cost of goods sold and then through a fixed overheads, and we end up with a hundred and fifty If you’re a technician on this job, would you put your family, your life, and all of the eggs in the basket for a hundred and fifty grand where you could lose it all this year? And some of our restorers lost money this year, which means that that hundred and fifty grand, they actually paid money to be in the business. Would you show up and pay money to be in the business? Right? This is just how tight the margins are, and we usually see adjusters being like, you guys make so much money. You looked at our gross profit. You didn’t look at our nets. K? So when we look at net profit, we didn’t actually make that much for the amount of revenue we pushed to the business. The second thing we do is we say, what happens if we increase costs? So if I’m focusing on something and you guys said we could increase sorry. What if we can we could increase cost savings? So a lot of you said, hey. I think I can save, like, three, four, five percent. So let’s say we can save three percent. Nothing big. Three cents for every dollar. Technicians, that’s like you just not damaging one hardwood floor. That’s you, you know, charging out for a little bit more or not charging out for something or no. So it’s cost savings. We’re not gonna damaging something or we’re not incurring cost. We don’t break a tool. Like a like, our drying meter dropped off a ladder and smashed on the floor. We have to go replace it. That’s a cost. K? So if we just come up with three percent, three cents on every dollar, can we save some money? Or can we stop all those those on the rebuilds? Can we stop making mistakes where we have to go back and paint something the second and third time? Do we have to stop redoing texture? I’ve had to pay for texture jobs twice, and it like, when it was our in house team, and that cost me. So in here, if you can find three, you get ninety thousand dollars. It says, in order to do that, you either find three cents on every hundred, or you have to go get one point eight million dollars of new revenue. So what’s easier to make the same money? Find three cents on every dollar or go find one point eight million dollars in new sales. Pretty crazy. Like, when you sit down, you’re like, man, if I just built it. So I have to have to make two hundred and forty grand. I need to build a four point eight million dollar company next year. That’s how you use this. So it’s eight percent, and you’re like, okay. Well, we make two hundred forty thousand. That’s actually feeling like a little bit better business. I actually wanna be in that business. And you’re like, okay. Next charge. What if I increase my charge offs? Now it assumes no cost savings. Just what if I just focus on charges? Now you guys went bananas. You’re like, I think I can get eight and ten percent. Let’s just go and say we can get three. If we can get three percent saving or increased revenue, a technician says, hey. We replaced site containment three times, and we only charge for it once normally. Hey, boss. We can actually charge for it three times. We changed it every day we were in. Cool. I’d like to see it on your work order or your field report. If you do that, it’s the equivalent of making another one point eight million dollars in business. How much marketing and people do you need to get that much more revenue? Well, we almost have we have to more than double our business. So you need more technicians wherever you got in your company. We need fifty percent more. Go find a good talented staff and ramp up. It’s hard. K. The bottom one is what if we do bottom and top line analysis? What if we come in and save a little bit of money on some things and we increase our charge that’s a little bit? Not crazy like we said we’re gonna do. Just a little bit. Well, we would build the equivalent of a six point six million dollar business to get that three hundred and thirty thousand dollars. But if we just find those savings and a little bit of charges, so, like, I tell my project managers, you sell on that job site for an extra twenty minutes, Drink your Starbucks and go find some more money. Like, you need to find more dollars on a job. Technicians, you need to find the charge outs on the water damaged jobs. You need to size the equipment. Could we get three percent? Probably thirty dollars per thousand. That’s what it works out to. So if I have a six thousand dollar water damage job, can I find a few hundred dollars more? Yeah. Easily. Really easy. I bet you you missed that. You go walk on a job, you’ll find that easy. But let’s say we only find that. We don’t find it on every job. We find it on occasional jobs. We could have a six point six million dollar business, but we’re only running three million through revenue. This will explain why your neighbor if you ever had a business where you’re like, man, I started my company at the same time as the other guy, and they’re got new trucks and they’ve got all these tools and equipment. Well, they’re doing the same revenue as you, but they’re putting way more to the survivability of their business. And that survivability of the business is what carries you forward, and that’s why this is important. Now if you do that and then you say, let’s go take on some business. Let’s go take on some revenue. What’s the volume of impact? So what I did is I put up here, I put a a a growth projection piece in there. And so it says, hey. You know what? Let’s grow the business by twenty percent next year. That’s not aggressive. We’re gonna go from three million today to three point six million. K? We’re gonna have that five percent that we currently are making, and we’re gonna add three percent from savings and three percent from cross from growth. We’re gonna build the business from today’s revenue of a hundred and fifty thousand to tomorrow if we did nothing other than just improve our business, it’ll be three hundred and thirty. But if we grow, we’re gonna be almost four hundred thousand dollars. What type of business do you have at four hundred thousand versus a hundred and fifty? Christmas bonuses are easier to write for an owner. Guess what? I also can go buy the equipment and the trucks we need. Hey. We wanna get new tools that all match because our moisture meters are all different. I can do that here. I can reinvest here. It’s really hard to reinvest here. Anything under ten percent, you’re basically breakeven. Like, five percent, that money can get burned up so fast. But if I have four hundred grand and I lost a hundred, I’m okay. We’re good. Like, we’ll survive. But if you’re a hundred and fifty thousand, you lose a hundred, you might not cash flow. So your business is under that extreme pressure. And this is what private equity loves about restoration, is if you can get that consistency where you can find those dollars, they can then grow their businesses. They can grow guaranteed revenues out of the insurance carriers. And so they start looking at it and go, well, what if I had a thirty percent growth? All of a sudden, I almost triple triple my bottom line by only growing the business a third. So those numbers I showed you where my profitability skyrocketed was effectively just us taking our our current business and just fixing it. I didn’t go and look for more. We got more, but I wasn’t looking for it. I was like, no. I’m gonna go fix this part of the business, and I had a dramatic effect to it. Everyone wants to add revenue, TPA revenue. We gotta get all this revenue. Why? Because you could literally go in there and say, you know what? We’re gonna go and add one hundred percent more revenue. And if you’re not doing anything, you’re, like, three hundred grand. I could do that if I just picked up the the missing dollars. Do I need the revenue? Do I need the volumes? The only time you need volume is if you wanna keep people busy. Right? Now if I had three hundred and thirty thousand dollars, could I could I bump technician wages up when the when we’re slow? Yep. I could give minimum guaranteed hours, but I don’t know if it’s coming. Right? So that’s the problem is is there’s a bunch of ways you can run the business. There’s a bunch of strategies to running the business and pricing. And so what you’re starting to look at is if you just break the company down or you just break the business down into, like, simple pieces where, like, I’m focusing on cost savings for the next four months. Do you go too deep? Are you making good adjustments? And that’s where you’re you’re just looking at it. So, anyway, the bottom here, it wrote it like a story because I’m like, okay. Numbers are are numbers, but not all of us are numbers people. I’m a numbers nut. Your business doing exactly what you’re doing today at three million with the changes, you could make as much as money as doing six point six million in total revenue. If you grow your business by a hundred percent so let’s change that back to twenty five because that’s hundred is not not practical. If you grow your business by twenty five percent, three point seven million with the changes you made, you’ll earn four hundred and twelve thousand dollars of profit. If you don’t make the changes, you will need to sell eight point two million dollars of revenue. Not happening. Not even close to make the same four hundred and fifth twelve thousand dollars of revenue or profit. Your profit next year will be two hundred and seventy five percent more or two hundred and sixty two thousand dollars more profit by making these changes. Do I want my entire team invested in this? Yes. Am I gonna help get those people that can actually do it? Yes. And that is how you’re gonna take your profitability to another level. K. Here’s something that let’s see. We’ll finish this up. We’ll get in the q and a. So I keep coming back to this question, and it was what if everything I was taught about restoration was wrong? And the answer I keep coming back is is technically correct. Everything you learn in those classes is technically correct. So it’s not the question isn’t isn’t the right question, but it is wrong if you’re a business person. And the reason why is in today’s business, it’s not effective. K? It’s not effective. The game changed, but the training stayed the same. And so you have to think about your business differently than what you’re being told, and I didn’t realize that until I broke my business down. And you remember Ken? I love his smile. Like, I got a lot to owe to this man, but he said, you won’t understand restoration until you’ve owned a business. I don’t think he ever understood it, but I love the man because it was the best advice I ever received, And he was absolutely right. So I never would have broken the systems. I would have never personally invested all that time into figuring it out, to get the company to succeed because I I probably would have left before. It would have been easy. He introduced me to Paul at �Թϲ�����, I would never design the software you guys are using. And then without Ken, I would have never created Profitable Restore. And to the people that said that this is easy to sit and come up with behind a desk, These were my notes, and it’s kinda funny looking back at them. Like, there’s anger into them, and then there’s like, hey. Be positive. But when you’re upside down, you’re not so positive. It was like find energy, be positive, drive the team, and that was the blueprint that I wrote. And then I ended up creating that on my office. And I was like, oh, man. This is this is what it’s gonna take for me to do it. And then I said, if I just stick to it, it’s gonna work. And what’s funny is if I were to do it in a PowerPoint, so if I sat in an office and I made it look pretty, it would look like that. And so that’s what my PowerPoints look like, and it comes from the experience I have. So this came about, you know, the relationships. I didn’t make this up. I walked those hard miles. If you’re going through this, like, you’re the owner on the minus side or you’re the owner on the low margin side, I get your struggle. It’s a struggle to get profit. You’re going through your own pain, and you’re going through your own business. It’s not your fault. The diff there’s different organizations that are building training, software, estimating. They’re all built by these different people, and they’ve never built a high performance restoration company. They’ve never built a restoration company that’s cranking margin. They build pieces of a system that you have to put together, and there’s nobody putting it together. So that’s what I looked at, and that’s where I struggled. And I just was like, man, if you struggle with this, put it in the chat because everyone else is here. When I did the two thousand sixteen, seventeen, I did a presentation at the RA that all not all years are winners. I felt like the biggest loser when I went in. And Chris, I’m doing really good. I got, like, ten million dollar plant. I got twenty trucks. Yeah. And then I found out everyone’s not making money. Like, everyone’s not crushing it. Eighty percent of us aren’t crushing it. So don’t lie to me. We’re not doing that good. We’re getting our asses handed to us on a lot of days. But I thought I was the only one that was losing money, and I thought I was the biggest loser in the industry because everyone else was growing and making money. So it’s not that way. Now I had this story out. I’ll tell you this. I I was talking to Kristen earlier, and she says, like, hey. You’re really excited for this one. I was like, yeah. I couldn’t sleep last night. In two thousand nineteen, I had a friend of mine, not a friend, a student, a former student called he just called to say goodbye. And I was like, cool. Like, what’s up? And I thought he was leaving the industry, but he was calling to say goodbye because he his business was upside down. His marriage was on the rocks. His business and his house was gonna be repossessed, and he was thinking of offing himself. Actually, he was gonna. And I’m like, dude, don’t do it. I’m like, it’s not that big of a deal. Like, yeah, * year. Big deal. Your family, you you put all your heart in your business. Who cares? Like, let’s fix it. Let’s let’s go fix it. And so we fixed his business, and I did a bunch of the stuff with him. And, you know, I was a little mad that I got the call, but I’m I’m happy that we got him up and running. And then in twenty twenty, I think, was the year that we launched this. And this was like, hey. I’m not alone. He’s not alone, and you’re not alone. So, anyway, guys, that’s where this came from. Yeah. I didn’t make this **** up. This is this is how you earn it, and you gotta go through the hard steps to figure it out. So, if you’re there, it’s not that bad. So let’s jump into questions. So I just wanna circle back on Tim’s question. He did, explain a little bit. So he’s wondering if the industry standard to charge for customer requested change orders. Sorry. What I hear it is. Could you could you ask a question? Hey, Kava. I got just no. Hold so wait. Wait. Hey, Kava. I got I reach out to me. You got my, contact. Just put your number in there. I got you. Yeah. Sorry. Go ahead. No worries. Yeah. I’ll start with the first question. So do you charge the customer for a change order that is an option they wanna change? And then he said he’s wondering if it is the industry standard to charge for customer requested change orders. Oh, absolutely. It’s it’s well, is it industry change order? So it’s not industry changeover. Sorry. It’s not industry standard in some companies. Some companies just are like, you know what? We’re not taking it. It’s too much headache. But I’ll be honest. There’s some people there’s Joseph Cipriano out of Detroit. The guy’s got, like, a show home, and his whole process is take an insurance claim and, like, sell it to more. I think it’s smart, but there’s a lot of businesses that are like, hey. We do restoration because that’s how we identify. What if you’re like, we do restoration when you’re in time of need, and then we do, like, massive high end rentals when when you’re not. How do you take that customer and, like, ramp up the sale value, or how do you take that customer and make more money? Right? So it’s like, I wanna take that customer along a journey. I don’t wanna get as much dollars out of them because it’s gonna go somewhere. They’re upgrading their kitchen or their bath. Why wouldn’t they use us? Hey. They know I know how to deal with water. They know I know how to deal with fire. Why wouldn’t you do your bathroom with us? I have trades. I’ll take your money. And then if I’m doing it and I’m adding value to it, then I’m gonna get you ramped up. I’m gonna make you more money. So I think it’s a sucker’s play to do all the insurance work at low margin and then not go sell it the job’s higher because I can get margin from people if I can find people with value. So I like upselling. I like change orders. Like, I will paint your entire house. Like, I had I tell this story before, but I had a a homeowner that the adjuster said that, you know, they weren’t gonna get covered, but they told the this guy was a beast. He was, like, six two, big stocky guy, and he cornered me in the basement. He’s like, hey. You’re gonna take care of this? I’m like, no. The insurance carrier the insurance adjuster said they weren’t paying for it. I’m like, listen, dude. I’m a contractor. I will literally bulldoze your house down instead of painting the wall if you tell me to. I just need to know who’s paying. And he started laughing. I deescalated the situation that way, but he was mad because they weren’t gonna pay for some stuff that he was doing. So I’ll do anything you want me to, but a lot of us don’t go in and try to upsell the job. So I think change orders, it depends on how you build your business, but I would build my business around, let’s sell it, and let’s make as much money as we can, and let’s get away from the grind that we’re in right now or the rut we’re in with with insurance companies. They don’t value they value you showing up and doing it, but you versus someone else, there’s no value. To that customer, you’re the hero. That’s where the value is. I’d upsell every job I could. Yeah. Great. So how are companies charging a hundred dollars for technicians? Rate for WRT labor are quite low in our area, like forty dollars. Yeah. So so you’re playing by somebody else’s price list. Did you figure out your pricing? Have you have you sat down and went, like, what is our cost on our labor? And then, you know, you can report it to exact where will it change. Maybe. It has to mean that some other carriers have to or other contractors have to report it. You might move to time and material. Just I’ll give you an example. I won’t talk exactly about price in this forum. There’s there’s forums that we can talk about price. This isn’t one of them. But I will tell you this, is that restores who use exact domain, that’s all you know. Let’s say you’re charging forty dollars. There’s someone down the street who’s charging eighty five, And so you don’t know they’re charging eighty five. The adjuster told you nobody else is charging that, but I will guarantee there’s people charging eighty five, a hundred, a hundred and twenty. I guarantee there’s people doing it. Exactamate price is a medium price. They take out the highs and take out the lows, and they give you a median. It’s supposed to be researched. To what level? I don’t know. Right? But you have to come up with your own price. You’re your own business. Xactimate is not a business. They’re not a business management team. They’re not a they just literally put a price list together and say, make it yours. And so we work through. We’re like, hey. One, you need a pricing strategy. Two, you need to get your price list right. Three, you better make some money with that price list. I’m not saying it’s the wrong price list because you have to figure out what your cost is. But if it’s that low, it might be just a bad thing with the program. I don’t know. So what are some top tips for for someone just starting a new company to get initial jobs? You know what? It’s it’s it’s marketing. One, if you’re a new company, you don’t have a lot of experience. So I’d be focused on how do I get a lot of experience like, how do I get my experience and knowledge up? So I want my knowledge base up. Don’t do sucker work like you’re going out talking to brokers, project man or property managers. You might do plumber marketing where you say, hey. If you have a leak, I’ll come in and and service the customer. You’re networking. Everybody’s a potential client, but there’s certain fishing holes that you can go to get more work. Right? Like, I want people to have a lot of doors. Property Property managers have lots of doors. So you if you wanna sound a little bit like a pro, you’re like, hey. How many doors do you manage? That’s normally how they’ll talk to you about. Like, how many units do you manage? How many doors do you have under management? Oh, we have sixteen hundred doors. Okay. Cool. That’s sixteen hundred units. And then you work your way in to be their their service provider. You could sign up for a TPA, but normally, they need you in business for a couple years before you do it. And then you have to make a business decision. Is that the route you wanna go? And what is reasonable for weekly charge on, EQ? Alright. So I’m not gonna talk the actual price, but let’s talk method. If you had if I have an air mover and I’m gonna use a pricing of thirty dollars per day. So my air mover’s thirty dollars per day. Per week, it’s two hundred and ten dollars. No overhead and profit. But if you’re in Canada, get overhead and profit. If you’re in the States, not normally. But let’s say that we’re just talking the equipment rate. It’s two hundred and ten for seven days. If I have a carrier come in and say, that’s a four day rate. Well, my thirty dollars a day is based on it renting every day. If I cut my days down, that piece of equipment might be worth forty dollars a day. And then I’m like, well, sometimes it rents for five, six, and seven, but a seven day week is four days of rental, and I charge forty dollars a day. So I’m getting a hundred and sixty dollars for that week. Or I might be like, you know what? It’s forty five dollars a day, and I’m getting a hundred and eighty for that week. It’s a pricing scheme that you come up with. You’re like, there’s a small discount for weekly rate. But if it’s hourly or or sorry. If it’s daily, it’s thirty dollars a day. If it’s hourly, it might be, like, two dollars an hour because you’re not renting it for as long. It’s like anything. If you wanna add a weekly rate to it, there’s a discount, but it’s not forty percent. I have a friend who’s a he’s a consultant, and he always gets into this like, hey. I the equipment should rent for four days and not seven. And I’m like, the pricing scheme wasn’t built for four on seven. I would raise the price of my four to offset the seven. Like, you can’t just go in and cut three days and be like, that’s now the the four day price or the weekly price. It’s not how it works. You get to determine how many times does it go to six? How many times does it go to five? How many is it actually for? And so then you build your pricing model out of that. So you have to get into pricing mechanics. That’s actually that’s what we’re releasing in April is we’re going through all the pricing mechanics, all the Xactimate training for profitability, all the time and material, or we call it rate material training. Everything that you need to understand about estimating, that’s what we’re releasing. So that QR code is how we’re gonna get you on the estimating part. So if you’re looking for that, that’s what we’re doing. And then we’re tying in all the operations. So, like, everything I showed you today, we’re gonna go and solve that so you don’t have to, but it’s there if you guys want it. Like, too many people are hurting, have at her. But that’s how I would do it is you have to build a strategy around weekly rates, and you have to actually think about it. Don’t let someone dictate your weekly rate to you. It’s it’s like you going to them and saying, hey. I wanna pay my premium, every two weeks or every week, and this is how much I’m paying you. They wouldn’t do that. Nobody does that. We do it. So, anyway, let let’s let’s jump on to the next one. For sure. So this is regarding Xactimate. And I apologize. The question I’m gonna try and read this. Do do many work with find success in altering yields and Xactimate line items to broach slower slower processes slash methods and capture proper costing? So, for example, dry versus wet cleaning previously noted. Yeah. So part of it is is is all of so in Xactimate, they call this thing yield, but in the real world, we call it production rate. What’s your production rate? So your production rate would be that you’re sitting down here. Your production rate is that you’re sitting down and to do one unit we’ll call this a square foot. It’s one by one. To do one unit of cleaning takes fifteen seconds. And you go, okay. Well, then I can do four units of cleaning per minute, and I can do if I just keep rolling that out, I’d be, like, two hundred and forty an hour, but that’s not how it is. It’s like, no. Then there’s breaks and inefficiency. So when I clean, I can do three. I can do four, but when I’m not cleaning, I can do three. If if the unit price only gives you one unit sorry. It says you can do ten units. It’s like, no. That’s wrong. Well, it’s a it all it’s all I can fit on here. If this is what I can actually do and this is what it says I can do, I have to change my rate. I have to change the rate. The the rate has to change because this is all the work I can do, but this is what it says I can do. And it doesn’t work that way. So you have to change your rates. That’s how it was designed. It’s like drywall. So look at drywall this way. If I had a wall and I’m gonna draw this. There’s there’s my art skills in in action. If I had a wall with a window here and here and a door versus a wall with nothing. What’s faster? Well, this is faster. Slap the boards up and rip it. Here, gotta do trim. I gotta cut holes out. It’s gonna take more time. I got more waste. And then they’re like, you know what? Deduct the waste. You don’t you can’t charge us for the waste because we’re not actually putting drywall there. Well, guess what? They’re not putting little patches in here. They’re just gonna slap boards on and cut the waste out, so you have to make the adjustments. So when we look at estimating, estimating is about getting the scope right. So the scope, if you take the estimate, the number out, the scope is how much material are we gonna use here and how much waste do we have on this window. And if you actually looked at scoping right, you’d be like, well, there’s a lot of waste here, and there’s not a lot of waste here. So do my numbers add up? If they don’t add up, you change them. And so that yield is your production rate, and that production rate is how much time or how many units you get per minute, per hour, per square foot out of the job. And so that’s where you’re basically running running your numbers against it. And and, guys, it’s it’s you have to change it. It’s just what if what if you’re doing what if you’re working on, like, a thirty a thirty story building and you gotta go up and down elevators? Either you’re adding hours in or you’re changing the yield or the production rate. So I’m be like, oh, it’s up on the thirtieth floor. It’s twenty dollars a square foot for drywall because we have to go up and down elevators. You could do that or you could say, hey. It’s the same price, but now we have to charge for all that up and down in the elevator. So it’s coming up with the right price and and production rates. Have to charge. You have to change it. Then you have to justify it. So in a in a rebuild, in a quote, that makes complete sense. You’re just like, hey. There’s my there’s my number. Someone else might come in with a different number, and you play the game of, like, what’s reasonable. In mitigation, it’s the communication. So it’s like, hey. I need time sheets to support stuff. I need to document it. I need to explain what we’re gonna do. I need to talk about we’re on thirty floors up, and we gotta take the elevator. And it takes fifteen minutes to go round trip on the elevator when it’s busy. That’s what we’re talking about. So you have to have that conversation. So with insurance, it’s it’s communication. And I would rather know restoration’s bad. We’re like, hey. We’re gonna submit a price, and we’re gonna get paid. That’s not how it works. You get you get arguments. You get reviews. I’d rather know they’re not gonna pay me before I do the job and walk away than to get the job and then lose that money sitting in in purgatory for six or eight months. There’s probably better ways to do business. Again, I might be in a position where I need that revenue, but it’s still I’m not getting it for six to eight months. So it’s kinda like you incurred the cost, and at some point, you’re gonna get paid. Maybe that’s not the best thing for your business. Awesome. Thanks, Chris. So this one’s a situational. My company averages thirty to sixty percent profits on a lot of our jobs. Based on all the numbers you’re giving, I have to assume we are doing most of everything quite well. I only ever get in trouble when we are less than thirty percent. Is that pretty standard? So somewhat. You look at some jobs that get thirty I had project managers again, so it depends. I had project managers that were getting fifty, and I had two of them that were, like, side by side, and they were both getting about fifty percent. And I had one guy who was getting sixty two percent. And I was like, man, that’s, like, that’s that’s good. But then when you broke the numbers down, sixty two percent isn’t, a little good. It’s way better. And so we started to look at it because all those that twelve percent went straight bottom line. So all of a sudden, had like a super PM, and then we went back and reviewed the fifty percenters, and we’re like, hey. We’re actually leaving a lot of revenue on the table. So it kinda depends. Like, you might look at it and be like, hey, that’s good enough. But if you’re looking for survivability of your business in the future, I’d be like, there’s still money on the table. So it might depend, but you might capture all the revenue. Your price list matters. Your cost of labor will will dictate it. Your cost of your overheads dictate it. So, like, how does it actually fit is kind of one of those things that you have to make that decision if it is. But if you’ve left if you left dollars on the table, then then the answer is no. If you captured them all, then it sounds like you’re pretty good. So it kinda depends, but those are those aren’t bad numbers as a general rule. I got on rebuilds. I hear I hear people having eighteen percent on rebuild or sixteen percent on rebuilds. You’re like, yeah. That’s pretty tight. But what’s your cost on it? Right? So I don’t have a whole warehouse dedicated to rebuild. I have an office and a project manager. It might be good numbers. It might work for your business. For someone who’s running big overheads, it might not work for their business. In my old business, we had a about a twenty percent overhead. And so when I had guys doing eighteen percent profit margin, gross profit, we were losing two percent. So why would we even do the work? Like, you’re like, you just cut that out of your budget, and you’re already more profitable, and you don’t have all those overheads. Yeah. Good good question. It’s just it’s when a situation like that, it’s hard unless, like, you’re you give me one fact and, like, here’s my numbers, but I don’t know anything about your business. So as a general rule, I’d say that sounds good, but it might not be or it might be. Awesome. Thank you so much, Chris. So one last question here. Do you glow do sorry. Do you global change and factor it up twenty percent, or do you use a custom price list? How often are you having adjusters push back for not using a standard price list? Yeah. So so that’s a wicked question in in the sense that you know factoring. So factoring is where you go across, you say, add twenty percent to everything on my list. And so that’s a way of changing your price. And it’s it might be good. It’s a good blanket way to add twenty percent across the board. And if you’re not charging overhead and profit, but you’re burying it into the unit price, that’s a perfect way of doing it. I like that. What you get away from is that’s coming up to a price point, but you haven’t put a lot of thought into, like, every part of your price list. You haven’t come up with a strategy. So it’s a good first step if that’s what you’ve decided to do, but I like the strategy of where I I can actually build my numbers in. And then and I can I I have a place to tweak? So if I have a an adjuster I want to work with differently or there’s an adjuster I don’t like I had one adjuster I hated working with, so I literally created my own system to, like, screw with them. Right? I charge by the square foot, all my drying, all my restoration, all in. It was like, I don’t know. Let’s let’s say it was seventeen dollars a square foot, and he’s like, well, how’s this work? I’m like, everything’s in. It’s a one cost price. He’s like, well, this is you can’t do that. I’m like, well, customer signed my contract, and it’s seventeen a foot. When we tuck in and trucked it, that’s what we did. Well, we’re like, you know what? Let’s just do an all in price and see how that works. And we did it, and he went ballistic. He ended up paying the bill because he couldn’t argue it. And so it was an interesting way. I just had some fun with, hey. We’re gonna try some pricing things here, But we got our equipment paid for the right way. We charge for the labor. I just did as a as a as a global unit cost. So I like factoring for some things, but I’m not a big fan of factoring, like, to get my overhead profits and easy ones. Like, that’s how I’m gonna add it in. But if I start boiling a pricing strategy, I would go a little deeper than that. It’s it’s still a good way to do it. Yeah. Good question. Perfect. Well, I think, that’s it for the questions. Again, thank you everyone for joining us. Great session. Have a good one, guys.

Hello. Hello, everyone. Welcome. Howdy to everyone joining. We are so glad that you guys are here with us, today. I’m gonna be hosting today. My name is Anna. I’m the customer education manager here at �Թϲ�����, and I’m gonna, you know, toss it over to Chris if you wanna take it away. Yeah. Absolutely. Good morning, guys. We’re gonna do estimating. This there was a lot of questions that came in. And so of those questions, a lot of it was focused on Xactimate, and that wasn’t how I had planned this boot camp. This was sort of give you an idea. There’s, like, the buttonology of Xactimate, how to make the individual buttons go. Before you do that, you have to have a foundation of understanding everything that surrounds the estimate from a mechanical, function. So we’re gonna get into that today. I tried to open up exact. I’m getting a frame error on my on my sketch and on my estimating items. Keeps closing the program. So I can’t do a live demo with you on some things I was gonna share. So what we’ll do is I’ll go through and and we’ll talk about it in your q and a. If you ask the questions, I can discuss it. I just can’t show it to you today. So there’s a bunch of stuff that I was gonna go and show you that I can’t, but we’re gonna be able to discuss it anyway. And then what we have is we’ll we’ll talk about the actual unit pricing and some of the factors that you need to consider when you’re doing estimating in Xactimate. Now there was a lot of questions we had. How do you work with adjusters? How do you work with reviewers? And part of it is is the estimate itself is is part of the process. The other part is selling it, so that’s documentation. So we’re gonna cover off a lot of this, but there were so many questions we got. It was like a wide range from from line items to how do we deal with problem adjusters to insurance companies changing protocols. So I’ll try to answer as much as I can. And then in the q and a, if your question is still pressing and I didn’t get to it, every time we stop for questions, fire away, and I’ll try to do my best to, keep up with them. Today, what we’re gonna do is we’re gonna be going through we’re gonna go through this. We’re gonna go through the estimating struggle today, the problems that you guys are facing. And in there, we’re gonna discuss some of the challenges. We’re we do have some surveys. Every time you guys participate in a survey, if you’ve never been to one of these, every time you participate in a survey, none of your names appear. It’s just shown as a as a group, result. So, feel free to share what what you’re being asked, freely. Your now your information will be shared. Then we’re gonna look at the five estimating systems. And so this is the five different ways that we estimate in the industry. Most people, when they start off, they learn Xactimate because that’s what you do in residential. But if you wanna grow past that, you need to learn the other estimating systems. Most of the people that are doing large loss or the complex stuff aren’t doing Xactimate. You use time and material or a different system. So we’re gonna talk about that. Then we’re gonna talk about buttonology versus estimating, which you have to understand the buttonology is making a computer system work versus the actual process of estimating. And most of the time, it’s convoluted on how we do that. Then Then we’re looking at estimating traps, the factors that are gonna hold you or your estimators back from being able to become really profitable, and that’s some of the outside factors that influence us as restorers, the pressures we have from insurance companies and reviewers. We go and look at program versus non program work. So the different mindset. If you started in the business under programs, then you’re gonna have a different mindset than if you started coming in and selling your own business. We’re gonna take two breaks today. So there’ll be two ten minute breaks, not fifteen. And then what we’ll do is we’ll do a five minute q and a and then a ten minute break, and and we’ll move from there. The next part of it after we’re done the break, we go into unit price risks, which is talking about Xactimate. Although we’re not gonna talk about the exact buttons, but we will talk about what the risks are of of unit pricing. The argument of tools of the trades. So when someone says it’s just a tool of the trade that you don’t charge for, we’re gonna discuss that in-depth. Then we’re gonna look at the parts of an estimating system that come together so they make a profitable estimate, how you document it so that you you can win the estimate, win your profits, and then what it takes to be a profitable restorer. Then we close out with a q and a there. We’re gonna do a a bone hour long q and a. I’ll stick around and answer as many questions as I can. We’re gonna start with the estimating struggle today. And if you’re in the game of restoration, it is a different business than if we were in, say, any other business that we’re looking at. Right? If you’re a drywaller, it’s a different business. You’re you’re in that commodity based, push the the revenues in, simple estimating, simple executional work. But when you look at what we’re dealing with as a restore, you’ve got multiple clients that you need to deal with. You’re you’re selling sometimes a value to the customer, but then you’re selling the number to an adjuster who has no value on the quality of the work. They’re just trying to get the lowest number. And so you have all these different pressures which comes in and puts a lot of of external strain on your business. You might not recognize it at that time that all that external strain is coming in, and it does things to your staff. Right? You learn different rules. You become conditioned to what is and isn’t allowed based on certain programs. And the other side that we look at is that the people that are in this industry are generally helpers. You you find a lot of volunteer firefighters, people that lobby police, paramedics. They end up in this industry because you still get to help the community, and you get to help them at their time and need. Well, that drive to help people sometimes sacrifices our business profitability because you’re like, I wanna help people who had a disaster. That starts to struggle, and and and that struggle will impact your estimating because you’re you’re morally torn between helping people and going out and making a profit. And then sometimes you’re told things along the way that makes it even harder to adjust. Like, your estimate’s too high. You guys are doing the wrong thing. You’re you’re, you know, ripping us off. And he’s like, no. I’m just trying to help people, and they need to make money to do it. And so we’re focus on all of that. Because in order for you to do this, you need to to get into your business, you need to ex deliver exceptional service. You have to be profitable. If you don’t have profits, you’re out of the game. Right? Profits are the blood and the lifeline to playing this game, and you need to have those profits there. So it’s not a dirty word. We’re gonna focus on profits today. We’re gonna talk about profitability. We’re gonna talk about cash reserves. All the things that you need to do as an estimator as you’re writing your numbers and trying to move those numbers into, an invoice. And then when that invoice gets paid, the difference between your costs and what’s left over is the profit. That’s what we’re trying to maximize. Now when we look at it, we look at our business. And and the way I look at it is a normal business, you would look at your business and you say, hey. There’s you know, I’m trying to get someone to make an investment in my business. And the problem is that you have this insured that fits in the middle. And so the insurance company goes, oh, we have investments too. We have this cash that you wanna take from us, but we look at your business as an expense. And so all of a sudden, you’re in this this tightrope that you have to walk with the insured. You have a customer who paid money for an insurance policy, and they wanna get a a protection back, and you have to, as a contractor, deliver on that. Now the insurance company puts in all of the stopgaps to protect their investment, and you are looked at as an expense, an unnecessarily expense or a necessary expense, but they don’t wanna pay more for your services when they can get it from someone else cheaper because they don’t see the value inside their business. They don’t see the result. They’re just looking at you as a balance sheet or a profit loss and said, we have a claim. Claim came in, pay the least amount you can. Let’s get that service back, and let’s get the homeowner back, but don’t overpay. And so they put all these safeguards in place to protect their investment, and your job is to fight against it. And if you wanna think about it this way, think of it as like a financial fortress. Right? Everyone who holds the the revenue on the other side of the wall gets to determine when they’re gonna pay and how they’re gonna make you come through the hoops to get through the door so you can get paid. Now when we look at it in the struggles of getting paid, part of it is how do we communicate? Who are we doing our contracts with? And then what are we actually trying to get agreement on? Normally, trying to get agreement on scope. If we can knock down some of those big dominoes where we knock down some of the big objections that someone would have, we can move ourselves closer to getting paid. And so we make it so it’s easier to get paid, but it’s an emotionally draining. So your estimators get trained by the reviewer or by the consultants or or by a TPA of what they can and can’t do. And those rules that you apply to one job may not apply to another, but we may inherently go to be less resistance if I just do what I was told to do. And at the detriment of your business, you’re making bad financial choices. We also look at what is the emotional toll that this puts on on your your business. You’re in you’re dealing with customers that have the they have the contract with the insurance company. And what the insurance company is sold is a peace of mind contract. Basically says that if you have one of these losses or if you have anything other than these exclusions, you’re covered. And when we look at an insurance contract, they’re not all the same. But when we look at them as restorers, we look at them and say, well, if it says that you’re covered, then you’re you’re covered, and we should just do the work the same way. But all policies have different frameworks around them. They have different coverage degrees. Right? Like, if you bought a Chubb policy and you paid five grand, it’s probably gonna be different than if you bought another brand for a thousand dollars. Like, they’re not the same insurance policy on the same house. So you wouldn’t expect the same type of coverage. You pay for a premium insurance carrier so you get premium coverage. As a restorer, we don’t normally look at things like that. But at the end of the day, it doesn’t matter who you’re dealing with. You have reviewers, TPAs, consultants. All of them are there to protect the financial interest of the insurance company, but you’re the only one that’s actually delivering on that promise to get someone whole again. So out of all the people that they put in place, you’re the one that’s effectively doing the service, delivering that service, and making sure that it hits the customer. And so that’s why it’s important that we document everything that we’re doing to get our jobs to the end where we get paid. And your justification is I’m doing what the contract says to do in order to get to the end result. So that’s when we write an estimate or a scope, that’s the first thing we’re looking at is what does it take to get the customer back. Take out all the considerations from the insurance company, all the rules, take out all the insurance upgrades that they wanna do, and all we do is what is the scope to get the insured back to where they wanna be. That’s where we’re starting point. That’s our starting point. When I I’ll do that. When I looked at this, I I came into the industry back in two thousand five or six, and I started as an adjuster. And then after a little bit of time, I I I worked in the industry for a bit. I went in from an adjuster side. I went to become a, an adjuster. Sorry. Went from adjuster to work for a contractor on a national company, and then I worked for an individual office, and then I worked for a large corporation, and I ran one of the largest branches. I learned a lot about how to get offices profitable and all the the downward pressure. And what was interesting is while I was doing that, I was learning how to make money and how to be profitable in this industry. I was when I when I took this picture, it’s like fake it till you make it. I was at that time, I was Canada’s only independent Xactimate trainer, meaning I didn’t work for anybody else. I only worked for myself and then anyone that would hire. So, like, the hired gun that would come in and train companies. And so I got to work with insurance carriers and contractors and teach them Xactimate. And then it wasn’t the buttonology I was teaching. I was teaching the how to make money with it, so how to actually take the system and make money with it. And I did that, and I opened my consulting firm. And then I got to do some work with the the RCOC, which was the restoration contractors organization in Canada. The top banners like Belfor, First On-site, ServiceMaster, DKI, Paul Davis, Winmar. I’ll forget a couple here on-site. All of these big brands, First On-site, all these brands, all the CEOs are saying, hey. We have a lot of downward pricing pressure on us. Can you work with Deloitte? And between Deloitte and myself, can we come in and fix or understand where our our margins are are evaporating? And so for a while there, I was just focused on how do we generate profitability inside the systems that we’re using. And what most of it was Xactimate. And when I was brought in and we started working on that, we started to look at how does that change the way you write an estimate. And what we know is that the digital systems put confines around you that aren’t necessarily supposed to be locked in place. So when we talk about Xactimate, they start with a price list. And that price list, we know can be you could be higher or lower, but they just pick a median price. And that price, the insurance carrier look at that and go, that’s the price. Meanwhile, it’s actually picked from a higher and lower pool. And we need to understand that because when we started to look at profitability for for the entire, book of business in Canada, what we found is that those pricing numbers weren’t being adjusted fast enough or quick enough. Now they made changes, so the prices have got better, but it doesn’t mean that they actually are improved across the entire book of business or in every price list is right or that they’re getting accurate feedback. And so what we understand through that study is that when we did time and material invoicing, we made more money. When we were moving into unit pricing, there was financial pressures coming in that were were impacting price, and all of that became a major challenge. Now I did that from two thousand eleven. We did the study in two thousand thirteen. And then for the next two or three years, we were following that along and the prices came up and got adjusted. At the same time, we saw events happen like Fort McMurray where the Xactimate price list was basically thrown out, and then contractors came in and set their own prices when they were doing great material, and it was typically higher than Xactimate. And so there’s market conditions that will impact how you’re coming up with your price. I got to meet this gentleman, Ken Tucker, and he told me that if I wanted to understand an owner’s frustration, I should probably run a business. And I I come back to Ken because it was the best advice I ever got. So at the time, I was I was a consultant. Ken helped me get to the RCOC. He was the one that brought me in, but he’s like, hey. If you screw up, eighty percent of your customer base or potential customer base is gone. You’ll you’ll never do business with them again. And so don’t screw up this pricing study. But in two thousand eleven, he had given me some advice saying, hey. If you wanna understand how a restorer functions, it’s great you manage businesses, but you won’t know until you’re an owner. And so I had to go take the owner’s journey of becoming an owner, understanding what the ownership meant, understanding the sleeveless nights, laying in bed in bed at at wake at night looking and hoping that you got a check-in the morning because you can’t make payroll that afternoon. And so all of those pressures were impacting how you operate a business. And if I didn’t go through that, I wouldn’t have understood what it takes to run a restoration company. Even though I got to run some of the largest companies that that have ever existed, I got to run a forty million dollar branch in in a region, which is a unique experience because there’s not many businesses out there that are in that size. Having the understanding of what it took to be an owner totally changed my perspective on how we look at profit. And what was interesting is as we went through and looked at that profitability on a microscale, like, was only a three million dollar business, it provided me a lot of insight into what Ken was talking about, which is small changes in your business. You have to have factors that allow you to run the business like a proper organization. You have to put your house and your family’s future on the line. There’s a lot of pressure that comes with that. So I could took on a a partner, and I went into a business, and we had some pretty, interesting numbers. When we ran the business, the first year, they didn’t make any money. And then I came in, and we grew the business to about a fourteen percent net. The next year, we’d put an eighteen percent net in. And so my second year in the business, I had grown the business fairly well. Now based on the projection, we had sales that were coming in, and our sales should have gone up. Right? Our sales went up. Our profit should have been about twenty two percent. That’s what we were predicting. At the exact same time, I was doing that RCOC study, and I took my eye off the business. So I was helping my friend here get his business up and profitable. And instead of turning a profit, he got sick. I ended up having a loss, and that loss was incredibly devastating because I had been working with the entire Canadian restoration industry to how to make more money, and all of a sudden, we have a loss that took a place in our business. So you have that impostor syndrome that kicks in. The next year, we we turned a small profit, not very much, a couple percent. But I had retooled the entire business. I looked at how we did estimating across the board. Everything from the contract all the way to the invoice got redone. And what we did is in the following year, we end up turning more sales and more profit. And what happened is when you crank that profit around and you look at the business that way, everything revolved around estimating and systems and tech the technicals. Like, those are the three areas you can really make a difference in your profitability. So if you look at it, yeah, you can write a great number. If you don’t do the work properly, you’re not gonna be able to charge for it, and you’re not gonna be able to sustain it if you don’t know how you’re doing your work. So when we look at the business, we’re like, hey. What do we need to do? We got rid of one customer that didn’t make any sense for us to do business with. We they were forty percent of our revenue. We fired them and when replaced it with new revenue. So we put all these systems in place so we could drive profitability. So today, what we’re gonna do is we’re gonna talk about how are those systems, the technicals, and the estimating all connect together so that you can drive more profit into your business. And that’s the foundation for building a solid estimate. Now what was interesting is I got to come over to �Թϲ�����, and Paul Donald and I met back in two thousand fifteen through Ken Tucker. And Ken said, hey. You gotta meet these guys. And I got to come to �Թϲ����� and build some technology with them, and we’re still in a really good relationship. I left them last year to do this, to become the profitable restore group and and to put that in play. But what’s awesome is that the technology that �Թϲ����� brought in to the industry was focusing on the field where we make and lose our money. And so now we’re combining that technical technology into the field with technicals from the industry and putting it together with the estimating. All of a sudden, you can tell a really compelling story that justifies your invoices. If you went through your business and you’re like, man, I’ve taken training and I still **** or I struggle, it’s not your fault. Most of the training you got was buttonology training. How to hit one button to one section to make something work in a computer program. The foundation for estimating comes from not from, like, which button do I choose or which price is right on the on the price list. Those are that’s the minutiae you need to understand to make an an estimate roll out. That’s not what makes it your profit. You need to know your cost before you ever put a number out. If you just grab line items and let’s say you put twenty line items in and equals ten grand, what’s your cost? If you don’t know your cost, you can’t figure out your profitability. So when I took the training originally, I had all my estimators go to Calgary, and we went on a ten hour journey, ten hours from home, took our estimating, and I was like, hey. When did we learn how to make profit? And they’re like, oh, you don’t. You learn how to make the program work today. You’re not gonna learn how to make profit. And I’m like, well, I called, and I need to know how to make profitability. I’m in charge of getting more profits into our business. So, like, no. You have to figure that out on your own. So that led me down this long journey of understanding how the systems were built, how they’re designed, and what you need to know in order to make profit. What’s interesting is that what you’re taught in the industry isn’t what you’re you need to know. They just teach it to you the way that you need to understand it to make the buttons work. That’s not how you properly estimate. So what we’re gonna do today is I’m gonna ask you guys some questions just get an understanding of who’s on the call so I can make sure this conversation’s relevant. We’re gonna talk about what we’re gonna be doing for the rest of the call on estimating. But for the first one, we have a poll that’s gonna pop up, and it’s what is your role? So who’s on the call? We may have some adjusters. You might be a part of a management team, a technician, project manager, estimator. You might be an adjuster or an insurance professional. And if you’re in a watch party, like, there’s ten or fifteen in the sometimes that happens as well. It looks good. We got some adjusters on, which is great because this is a good conversation for for them to be a part of. Alright. So most of the people that I’m seeing are in are part of the management team, a few technicians. Awesome. We got some technicians in. Lots of project managers, estimators, a few adjusters, and then a few people doing watch parties, which I always find is cool. So we’ve got I’m gonna say ninety percent. I guess it’s ninety six percent is restoration companies or restoration professionals, and we got four percent that are adjusters and insurance. So I was in insurance, but never long enough to say I was a professional. I did about a year and a half of adjusting, and I did some fraud investigation. And then later on in my career, I did another close to a year of independent adjusting and got to work with some cool companies that were going through some mergers and acquisitions. That information helped me build the basis for what we did on the restoration side. The goal is, if you do it right, is to increase the profits of a restoration company while decreasing the cost to the insurance company. So what can we do on the cleaning and restoration side that can lower our our cost to the insurance partner while increasing the amount of money we make? It’s a win win if you can do it. So that’s what we’re looking at today. Now the next question we have is in here, it’s what is the most profitable estimating method? And what do you think is the most most profitable estimating method that’s there? It’s unit pricing, bid pricing, cost plus t and m, select all. I don’t know. Right? What’s the most profitable one? Lots of inputs coming in. By the way, I love that you guys are participating. Like, there’s already two hundred and forty answers, two fifty, two sixty, Only because he told us it was T and M. I love it. So we’ve got a ton of answers coming in. Now here’s what’s interesting. You’ve got some differences on on the, the pricing that’s coming in. Let’s see. We’re still got some answers coming in. Give it another second or two. Alright. So so we’re sitting on there we go. We’re sitting on twenty two percent. So the unit pricing is the most profitable, ten percent said bid, eleven says cost plus, and forty percent said t and m, and a bunch of I don’t know or select all. Now here’s the interesting part about that is if we look at our price, the only one that should they should all be the same. It’s shocking, but if you were to think about it, they should all be the same. And we’ll go into the details of how we get to that same price. The reason that we changed the different systems is because we don’t know what we don’t know when we’re writing the estimate. Right? If I don’t know what I’m if I don’t know my efficiencies, then I can’t predict it. And so we’re gonna get into that, but this is great that we see a big smattering of of which one’s more profitable. The reason t and m pops up as more profitable is that you can lock your margin in. And if you’re more efficient, the insurance carrier wins. If you’re less efficient, the insurance carrier loses, but only because the job was less efficient. It means the contractor wins along the line. There’s no there’s no penalty for the job being slow because it’s a bad job. That’s why you would see T and M as being more profitable even though it might have a lower margin. You’re you you lock your margins in. So we’re gonna get into that today, which will explain how all that works because the misnomer is unit pricing is really good for contractors or is really good for insurance companies, and it really depends. But this is a great conversation. Alright. Next poll. The next poll we have is how profitable is your restoration business. Now if you’re an owner or manager, you can answer this. If you’re PM or an adjuster, don’t. I just want owners on this one. And what the misnomer is is that we got a bunch of response coming in. Now this is net profit. So this is how profitable were you last year. And what the industry if you’re not an owner, what the industries respond to is normally, oh, these guys are, like, making so much money. And that’s the misnomer of the industry. What we typically found is in the last, eight years that I’ve been doing this is we found that somewhere between five and seven percent is about where most people were sitting as an average. In this one, it looks like if we wanna share those results, we got about a hundred and seventy in, hundred and eighty in. So in this one, it looks like we’re somewhere about fifty percent of the industry on this call are doing actually pretty good. We’ve got fifty percent that are over ten percent. So over ten percent in this industry because we’re a mitigation response is considered making money. Everyone below that, which is the other fifty percent, is is technically losing money. Now what’s interesting is we’ve got I feel like it . So I hey. Appreciate the honesty. We lost money last year. That’s that happens. Then we got we broke even. So that’s sixteen percent that are on the verge of, like, being on the wrong side of the business. And then another thirty four percent are less than ten, which is considered not making money. So what’s interesting is we got fifty percent that are on the low end, and we got fifty percent that had a good year. Now it depends on your product mix, whether you’re doing reconstruction or mitigation. It depends on how like, size of the jobs you’re doing, and it depends on your customer. There’s a whole bunch of factors that come in to impacting this, but I appreciate those that shared the truth. It took me a lot of years to find out that I wasn’t the only one that sucked. Honestly, it was two thousand fifteen. I was at an event, and I said I actually had a bad year. Everyone else told me how many trucks they bought, how big they were. I never ever up until that point heard someone say, oh, yeah. We lost money last year. So that’s why I pushed the the information around there. So let’s get into the types of estimating systems that are there. Now there’s five systems that we can run through. Right? We got rate material, and that’s the foundation for everything that you do. It’s sort of how you would plan your day. If you were to look at rate material and say, I’m gonna go to to the store, and I wanna figure out my time it takes to get to the store. Well, it’s like, okay. Well, normally, takes fifteen minutes to get to the store. I’m gonna spend a hundred dollars on groceries when I’m there, and then it’ll take me fifteen minutes to come home. I’m gonna be in the store for thirty minutes. That’s one hour, a hundred dollars. That’s the time and material. If you were to break it down on unit pricing, you would say, well, per mile that I drive, it’s gonna be this much time. I’m gonna spend this much per item, right, per loaf of bread, per, block of cheese. I’m gonna spend this much, and it’s gonna come up to a hundred. So you have the the rate material as your basis for your unit pricing. Now if you find a unit that you’re more efficient on, you get a sale on it, your price comes down. And so you’re like, oh, we saved money here. But if the price went up on something because they didn’t have the brand you want, the brand you wanted, it was all sold out, you have to buy the premium brand, price goes up. Your budget still has to be the same, or you have to increase your budget. So that’s how time and materials work is rate material says, hey. We’re gonna spend whatever we need to spend, and we have a budget on what we think it’d be for time. Everyone does rate materials when you do a calculation. That’s the basis for everything. Now when we get into unit pricing, unit pricing has written or known foundations on it. So when we look at unit pricing like exact, if we were to say that we were gonna do one square foot of carpet cleaning, it makes a bunch of assumptions. It says to do one square foot of carpet cleaning, we need the portable extractor. We need some chemical. We need some labor, and we assume this much time for this square foot. And if we extrapolate that to a hundred, it says that for you to do a hundred square feet, it takes all of this calculation to do it, and it takes one hour to do a hundred square feet. Now if we understood that, then it’s like, well, how much time should it take to do a thousand square feet? And they’ll say, hey. To do a thousand square feet is ten hours. And so it just becomes a different way of estimating. When we bid it, bid pricing, we’re doing the same thing. We’re coming up with a rate material and a bid pry and a unit price. We’re like, okay. We got all these units to do. Now we have to come up to this big number. And we gotta come up with this big number, and it has to be all the inefficiencies, all the things we forgot to include, our profit and a fudge factor. And then when you come up with a bid, normally, it’s like, I think it’s eighty. And then we wanna make ten, so that’s, like, eight grand. And then there’s probably some stuff we forgot, so let’s put a hundred thousand dollar bid in. And if you know you’re in a competitive market, then you’re gonna be like, hey. I gotta get closer to ninety. Right? I’ll try to get that eighty eight thousand is is where we need to be. I’m gonna go ninety and hope I win. So bid pricing starts to allow you that fudge factor for all the things you accounted for, and then it’s either you you drive the efficiency in or you add a fudge factor on top. And that’s how we do bids. And and based on your experience, you figure out whether you’re good at bidding or not. Then we look at cost plus. Cost plus is where we start to to value items and say, we’ll work on a fixed margin on top of the cost of the materials. Normally, it’s on longer term projects, so we’ll get into that. But cost plus and rate material are very similar. Value pricing is where we put a value on. It’s perceived or real. And value pricing could be where you sell your warranty. You sell your brand, and and you attach your brand and your warranty to the value of your service. So if you were to do carpet cleaning and you guaranteed and let’s say you scotch guarded the carpet, and you guaranteed it for three months or six months that no stains would would arrive on that carpet. All of a sudden, you have a stain free warranty for six months as long as they clean the carpets in six months and reapply it. That’s how you increase your price. You’re like, hey. I give you a higher price per square foot, but I also guarantee that you won’t need to call us back for stains because I put a special, you know, stain guard on there. And so I scotch guarded your carpet. You don’t have any stains on there. Therefore, if there is a stain, we’ll come back and do it for free. But you’re gonna pay us for the carpet cleaning a premium every time we come in and do your carpets. So we wanna raise that price. That’s value pricing. Now if we look at it from degree of difficulty, the degree of difficulty that we’re looking at is where things are are switched around. When we look at the degree of difficulty, cost plus is actually the easiest way for us to do things. Cost plus is where we say to the insurance company, we’re gonna do the work. And as long as our costs are covered, we’ll make fixed margins on top. Then we look at rate material. Rate material is is we set our prices. As long as we review our price list, we should make our margins. Value pricing is is easy to do, but you have to sell it, so it’s a little bit harder in that regard. Bid pricing, you’re pulling numbers out of the air if you haven’t had a good foundation on creating a bid. And the hardest pricing that you can do is unit pricing. There’s three reasons why it’s really hard. Unit pricing, you’re playing with somebody else’s systems that limit the amount of factors you can factor in. So if you were an adjuster, if you for the adjusters on here, if you go out and you write a scope of work, but you don’t know how the scope of work is gonna get done, you can’t effectively come up with a good price if you don’t know the orders of operation. So how the job is gonna get executed? And the way we could look at that is if we were looking at an empty house versus a a home with an occupant, what is the difference? We could say, well, we’re gonna paint the walls, and we’re gonna put new drywall in, paint the walls, but it’s the steps that go into it that makes the price different. And if you’re not familiar with it and you haven’t considered it, you’re gonna end up with two different prices. So we’ll talk about that in a little bit when we get into unit pricing. Now in here when we get to cost plus, cost plus is usually on larger projects. So if a project’s gonna last more than three to four months and you’ve got a lot of volatility in the market, you’re gonna then come in and look at cost plus. Now, typically, those are your large multifamily residential jobs. So if you have a large fire, then you would look at cost plus where the price of of, plywood, framing materials, electrical will go up and down in big levels between those times. In larger projects, you would say, hey. Maybe we should do cost plus on materials because then everyone knows that whatever the price is at the time that we go to install it, eight, nine, ten months later, that’s the price you pay. So the insurance company benefits from the price going down or the, insurance company loses with the price going up, but that’s just the real cost of doing business. And so those prices are effectively put in and agreed to that based on a a markup scale or a margin scale. And so what happens is if you’re doing that, you’ve got index inflation, you got cost of goods sold. So let’s say with the tariffs that just came in place on the fifty first state, we have a tariff war. Prices all of a sudden escalate on some items over others. If I did a job and I needed materials from Canada, and all of a sudden those materials go up in price, a cost plus job would account for that, and then you put your markup on top, and your profits are protected. If the price drops all of a sudden, tariffs come off and the price, like, drops from when you bid it, then you still get the margin, but the insurance company would then not pay the the tariff price. They pay the actual price. And so cost plus makes a lot of sense in those cases where you have that fluctuation of pricing and everyone knows that that’s just being accounted for. Typically, it’s large projects or projects where you’ve got a long timeline on it where between the time you start and time you finish. Could also be where you have really complex systems. Maybe it’s computer systems or you’re getting into, like, military institutional. You might do a cost plus contract in those situations because it just makes more sense that I’m just gonna get my margins figured out, and then we’ll you’ll just pay whatever the invoice is plus my my cost and my markup. If we look at rate material, rate material is where we provide a price list. So I’ve come back and said, okay. Everything on the job from equipment to labor, I’m gonna have as a price that we’re gonna negotiate at the front, but I don’t negotiate time. I I I don’t know how long it’s gonna take. So if we were to look at a fire job, let’s say a fire job on we have two different fires, and this is good for the adjusters on here. What is the time difference that it takes to to clean a dry fire versus a wet fire? So a smoldering fire or a fire with synthetics versus a natural fire or a hot fire, what’s the time difference does it take to clean? And you guys put that in the comments. We’ll we’ll take a look at it. How much more time does it take to clean a synthetic fire over a dry fire? Anyone have an idea? Because, yeah, four times, thirty five percent. No. It’s it’s closer to four hundred percent. Minimum, four four four hundred percent. So if I was to look at my my price and if I was to walk into a fire and I looked at a fire and I said, I’ve got a dry fire and the unit price I don’t know what the unit price and exact to me is based on. Is it based on a dry fire or or synthetic fire? What type of soot am I dealing with? Well, I don’t know because the system doesn’t say it because they didn’t build it that way because they didn’t account for it. They just were like, well, it’s heavy cleaning. Heavy cleaning of what? Dry or heavy cleaning of of what? So I don’t know what the unit price is gonna come out with. So if I don’t know how that’s been built, and I don’t know the confidence on the person building it, right, I don’t know their skill level. I don’t know what they know. Well, I don’t even know if the line item is right. So if I don’t know the line item is right, I would go to a material a rate and material budget and say, hey. Here’s the price. You’re gonna pay me seventy five dollars an hour for us to do the work, and it’s gonna take whatever time it takes to clean. And you can get that difference of four times the price because it’s it’s a wet fire. That and it what it is is is that soot or that char takes so much longer to clean. Right? It’s a deeper clean, whereas a dry ash, you could just vacuum it up and then give it a light wipe. A a sticky or synthetic fire will have a a wet soot. You could vacuum it up, but you’re gonna have to do a lot more cleaning on it, and you’re gonna get a lot more of that penetrating the surface. So when we look at this, we say, hey. If we’re gonna use rate material, then I’m gonna use it when I don’t know my efficiencies, but we agree the work needs to get done. And so we’re gonna do it, but we just don’t know how long it takes. That’s when I would switch over to rate and material. Because if I’m using unit pricing, it says, I know how long it’s gonna take, and I know what every factor that’s considered in a unit to make up the price. If you don’t know, you don’t use unit pricing. So that’s where unit pricing is better, not perfect, but better on reconstruction and not very good on mitigation. If we were to look at it this way, this is the other way I would look at it, is rate material on the bottom is your foundation. Once I know how much something costs, like, if we were looking at carpet repair so if I looked at carpet repair and, let’s say I have a carpet stain. Stains this big. It’s on a five thousand square foot carpet. Carpet’s immaculate, but it’s got a bleach stain like this. But that carpet would cost ten or or fifteen thousand dollars to to to replace. How much would a would the customer be willing to spend on a bleach stain? A thousand dollars? Now if I was going to an insurance company, they say, well, that’s just one stain. We’ll pay a minimum three hundred dollars. Okay. That’s one way of pricing it. A value price is, hey, missus Jones, if you don’t have to spend fifteen grand on the carpet and I can fix it for a thousand and give you a warranty that it’ll never fade, will will you pay that? And you have to sell that up. But if I did that, I could sell that carpet stain that the insurance company says is worth three hundred dollars. I could sell it for a thousand or two thousand dollars based on value pricing. What I need to know on both of them is how long does it take? So what is my time and my material? Time is an hour. Material is, let’s say, four dollars for the material, and then twenty five dollars for the equipment rental. Let’s say, all in, hundred bucks. If I charge the insurance company three fifty, I make good margin there. But if I can value price it to fit thousand dollars, fifteen hundred dollars, I make all that additional profit because I can sell extra value to it. I still need to understand the time and material to understand if I can do it. And so that’s what the basis is. Now when you get to bid pricing, you’re like, well, who am I bidding against? Because who you bid against will determine your price. If you’re bidding against the the budget, you know your costs, and then you’re like, okay. I I got an adjuster who is really administratively tedious. They don’t make things easy. I’m gonna add in time for that. The customer’s a pain. I’m gonna add in time for dealing with them, and I come up to this budget. If I get a green project manager, their number might be way low. It’d be like, that’s not a job I wanna win if the adjuster is looking for the lowest price. If the adjuster is looking for the job to be done right with the right quality, then I’m gonna put my price here. And if I got two other quality companies, we should all come in around the same price. And you’ll see that price discrepancy in bids. Right? You’ll see that up and down in the bid price. The last one is unit pricing, and that’s the one that’s most difficult because you have to understand everything. It’s crazy as an industry that we go in and we ask the newest people to use the most complicated estimating system that’s out there, but that’s the industry it is right now. And so a lot of your questions are on Xactimate. We’re based on how do I make this Xactimate work. It’s the hardest system to work. You need to understand the rest of it in order to make that work, and that’s why I focus on this boot camp to be about that. When we look at material, labor, and accommodations and meals, when you go rate material and you’re you’re negotiating these contracts, your negotiation of those contracts are effectively you’re setting your prices. You know what your material costs are, and you put a markup or margin in there of what you need to make in order to make it profitable. And you do that on every piece of this. So you actually create a a price list that comes in and says, here’s what we’re gonna do. And whenever we deal with sub trades or vendors, here’s the margin we’re gonna put on top of that. And what’s interesting about this is we know the type of labor. So if it’s my like, when we do rate material, my contents and cleaning technicians are the same price as my water technicians, which are the same price as my fire technicians. It’s a technician rate. If you look at Xactimate, there’s, like, five different rates for different people. But when we do rate material and commercial, they’re all the same rate. Like, a cleaner and restore and it has they’re all the same. And then if we’re doing this best, it’s it’s a different price. But all of our labor pools are the same, but in exact to me, it’s different. So what we do is we look at what is the type of labor and how much are we gonna charge for it. What is the type of material and how much are we gonna charge for it? That rate is your price. It’s not your cost. It’s your price. So then you figure out, like, a sheet of plywood or a sheet of drywall. Let’s say a sheet of drywall, you pay seven dollars or eight dollars for one sheet. What is the charge that you’re putting on there? Is it twelve dollars a sheet? And that includes your handling from the store to the to the site. Is it sixteen dollars a sheet? And that includes everything, or is it is it twelve dollars and all the labor to go pick it up is is now part of the the labor component of it? When you do rate and material, typically, it’s that sheet is this, and then the labor to go pick it up is billed as time. So you factor in your your your pricing scheme of how you did you come up with your price? How did you come up with your price? What is the mechanics of it? And how much strategy do you have behind that? Because then you’re gonna have to negotiate this. When we look at that, we go, well, what type of material are we doing, and what’s the quality of it? Because quality was gonna dictate price. Where are sizes? How like, is it a four inch baseboard, six inch baseboard? Is it a large air scrubber, small air scrubber? Right? How many do we have on-site? And then what do we do with the downtime? So if I have to bring equipment into a job site, it can’t all be deployed at the same time, but it has to sit on-site. Is there is there a a half rate for equipment sitting on-site that’s not used? Is it full rate? Is it because once we bring it here, it’s losing revenue somewhere else, but you’re gonna need it. We just need to do work to get it there, but we need to secure the equipment or it’s gone. You have to have all these considerations. Are you in a cat or you’re just in a regular business as usual? All of these are what you’re gonna negotiate in your rate material. Now why we use rate material? It’d be usually because there’s high project complexity. So things that you don’t know, multistory family, multifamily residential, commercial, industrial, almost all the time, I’m gonna use rate material. You have unpredictable project costs. So you haven’t gone in and done all your testing. Like, I wonder how long it takes to clean a square foot of wall because I wanna compare it to my unit price. So once you figure out, hey. What what does one square foot take to clean? You could then multiply that by the number of square feet in the building and figure it out. That’s part of a good project manager job if you’re estimating, whether you’re doing rate material, unit pricing, you should know what your production rate is on your cleaning. Like, hey. This this actually takes a lot longer for us to clean because you have to set budgets for the adjuster. And it doesn’t mean that because you’re doing rate material, the adjuster doesn’t get a budget. It just means it’s a it’s a flexible budget. It’s a rough order of magnitude. Does that make sense? So when we look at that, the client normally lacks trust as well. They’re like, I don’t trust your numbers. So you’re like, well, this is the way we build our number out is we did a sample clean. We wipe the walls the way we’re gonna clean it. We realize it’s a four or five wipe sample. That’s the process to clean the walls. It might change in the lighter areas. This is the amount of time we think it’s gonna take. And then whatever time it takes or whatever materials we burn up, we’re gonna just charge you what you have. And you could put a clerk in the works on, and they can watch us charge as we go. It’s it’s a fair way of doing business. On long projects, on complex projects, this is the best way to to do your project. Then you got mitigation emergencies where you lack decision making information. So I don’t know what’s behind the wall. I don’t know how to price it because I don’t know if we have metal crack with water in the bottom that we have to, you know, the bottoms and then vacuum it out. Can we just dry it with like, taking baseboard off and drying it? All of a sudden, you have all this unknown information. Great material makes sense for that, especially if you can’t control the site. And then if you got poorly defined scope where you see on projects where they say, hey. Remove and replace drywall as necessary. For an adjuster, it’s it’s pretty hard. If I see that scope, I don’t know, like, what is remove and replace as necessary, and you come in and the entire room has been gutted. And you’re like, well, shouldn’t have been the two foot or four foot cut, and all of sudden, everything from ceiling to floor is gone. That’s the information that you have to have is great materials good for that, but you should still have a better defined scope with asterisk. Like, hey. We’re we’re scoping that we’re gonna take the drywall and insulation out, but we don’t think there’s insulation on the inside walls. If there is, it’s gonna increase our time. Like, that’s how you would communicate that for rate material if you’re doing a project like that. When we look at value pricing, value pricing is hard to do in the insurance market. It it because it requires the consumer or the client to make a decision to pay more for a service, and insurance companies generally pay a very unit price minded mindset. But a value price, if you were to look at it, if I wanna get coffee and I go to a a high end coffee store, Starbucks, what am I getting there? Well, I’m getting peace of mind. I get the same coffee every time. I know what I’m getting. So right there, you got that chain consistency. I get an environment that I can sit at. Is it status? Maybe it was status in the past. Maybe it’s not now. But you had status that, hey. I have a Starbucks coffee. It’s not McDonald’s, but it’s still coffee. Now what’s the atmosphere that you get in there? Well, if you go into the shop and you sit there and you’re working from there, you get the environment, which is no kids running around or or used to have no kids running around in a Starbucks, but it was a a business like environment that you could meet, talk, relax, enjoy a coffee, and you pay a premium for that experience. But if you want a coffee and you’re looking at, well, who’s who’s the cheapest, you could go McDonald’s. So if you were to take this back to an insurance mindset, when you get the same coffee, it’s still a dark roast coffee versus another dark roast coffee, we’re just gonna pay less at McDonald’s. Why? You get rid of that personal service at Starbucks. Take all that value. I don’t want the value. I just need a coffee for a coffee. And even then, they’d be like, why are we even paying McDonald’s coffee? Why don’t you just, like, make it yourself? So there’s less cost in there, and there’s a quality. Value pricing is always with perceived or real value that you have to add to it. Problem is when someone else is paying, they’re just looking at the end result. And the end result is you get dark roast coffee, whether it’s Starbucks or McDonald’s. Is it coffee? Is it similar? Does it taste the same? That’s where you start to look at it, and you go value pricing is hard to sell to an insurance company because they’re looking at it as a commodity. And so when you are a restorer and you’re selling an upgrade to a customer, you can put more value and more margin into your upgrades because you’re selling the value of an upgraded kitchen. So you can make more margin on that upsell value when you do value pricing. Hey. We’ll sell you the the the solid surface counters. You got an insurance credit for the laminate, but we’re gonna sell you the solid surface counter, and we’re gonna charge more for it. And we’ll warranty that for five years, and you’re gonna pay x. And that’s how you can increase your sale using value. When we look at this, guys, we have perceived and real value. So perceived values is things like warranty, your brand. Real value is, did you go from a laminate to a solid surface? That’s the real value. The perceived value is where you get a lot of extra value that you can charge for that you don’t actually have to incur cost on. So that’s things like warranty, putting your brand on it. I’m a big proponent of, like, I if I’m part of a franchise, I’m gonna put my brand on. If I’m an independent, I’m gonna create that brand image around my brand that this is a prestige brand. And the value perceived value is we’ve been in business thirty years. We’re independently owned. We’re Canadian owned or we’re American owned. I’m gonna put whatever value that is gonna help increase my my salability of my sale. And what it is is, does the customer feel good about spending this money with you? So when we’re talking about doing the carpet repair, literally, I said it a hundred times. I took carpet color repair and carpet repair moment, last two courses on my iCRC journey. And I was like, oh my god. I I missed so much money inside these jobs that I could’ve been selling because there were so many carpets that had rolls, and there was just a stretch stretch the carpet out. And people were replacing the carpets because they were installed incorrectly. I’ll charge you a thousand dollars to put a power stretcher down and and stretch it out, and it maybe cost me a couple hours. That’s high ROI for the time we invest in our business. Why? I can put a warranty on that. Be like, yeah. Your carpet’s good for five years, so we’ll never roll. If it does, we’ll come back, and we’ll do it again. Why? I charged you a thousand dollars for something that cost me a hundred dollars. If I have to come back, it’ll cost me another hundred dollars. I still made eight. And so I love value pricing with the customer. It’s really hard to do in restoration. We do it in restoration. We will look at restoration. The reason why it’s hard to do is, let’s say, P and M, you lock your margin. Right? So you’ve got a a cost in here. We got our overheads. We got our cost of goods sold, and then we’ve got our profit. And for us to do a T and M job, we can say, hey. We can make thirty percent profit on something if we do it in in T and M. We lock it in. On unit price, we have to put more in there because why? Well, that unit might not materialize to be as efficient, and we could lose money. So you have to make your unit price include for the inefficiencies. Every job is different. The unit price has to account for the difficult jobs. If I go into bid pricing, I would say, hey. You know what? I still have my overheads. I still have my cost of goods. I’m gonna be able to put a little fudge factor in there because if I’m wrong, I need the if my cost of goods cost of goods sold goes up, I need to account for that increase in that cost. So bid pricing, put a fudge factor in probably because we don’t scope as well, so you have to put that in. Value pricing value pricing is what I can sell it to you for. And so where do you sold value pricing every day? Well, do you buy Apple phone or Samsung or Nokia or what other brands are out there? Your your technology is mostly value pricing. It doesn’t cost them more to do it. Shoes is another one. Like Nike shoes. Could you get a fifteen dollar pair of import shoes? Yeah. Why do you pay a hundred? Because of the brand. The value that you perceive is that they’re gonna back it with a good quality shoe that they’re engineered for sports. Okay. Is that true? Maybe. Is there a lot of marketing to it? Yeah. There is. And so value pricing is the shoe. They sold you the value. You identify with a brand, and any brand that you identify with has value pricing built into it. Really hard to do it in restoration because the insurance company is paying for it, And so they’re not the end consumer. Hannah, don’t know if we got any questions that we can jump to here before we get to a break here. We do have some questions. I think what maybe, first come, first survey, probably the best way to do it because we’ve had a few sitting in there for a while. I’ll start with this anonymous one. It’s kinda long. This person says, one question I’ve had recently is, as the person to take care of the homeowner and make them whole, where am I fitting in with the adjuster? I need to tear out the floor, should I tell the adjuster that? Wait for them to look at the property, do the work, and hope that they agree that it was needed, and I’ll get paid, leave drying equipment on the floor for fifteen days until the adjuster arrives, and then remove the floor, then deal with the pushback that I, that I should have pulled equipment sooner if I knew the floor wasn’t going to dry. So so so there’s a couple questions there. Is if if I’m if it’s a category two or three, I could stabilize as long as I need to knowing that there’ll be mold. And so it comes down to communication. And I’m sympathetic to the adjusters, but I I’m I’m hard on them at the same time. So so we have a few on here, but their job is to identify coverage. And the faster they identify coverage, the faster we can we can get moving. If they get inundated with a lot of work and they can’t get to the job, but you wanna move ahead with it, your job is to go and document it and then put a plan in place saying, here’s what we need to do and fired off to the adjuster as soon as possible. They give them two options. The option is we stabilize till you come and inspect it, or I move forward with it with the information I’ve given you. I move forward with it, and you approve that this is the game plan going forward. And your your whole focus should be, did you help save them money? Do you help reduce liability? And did you help them identify if the cause of loss? Like, if I’m an adjuster and I can’t get to the job site right away, make it easy for me. Right? Give me the information so I can make a a educated decision other than, hey. You know, you were here for fifteen days and you didn’t do anything, and I didn’t get here for a few days. And all of a sudden, we’re in now a conflict where I’ve got a ten thousand dollar bill that I can’t justify. Give them the chance to justify it first. Now if they don’t communicate with you, that’s on them. But if you’ve given them the information that says, here was the loss. It was a broken clean water pipe. It sat for a day before it was called in. We can go in and and attempt to dry it right now. We can stabilize it till you come. How do you wanna proceed? Let them be part of the conversation. That’s their job is to spend the money of the insurance companies appropriately. Give them the best avenue and be like, hey. I recommend we go ahead with this, this, this, and this so that at the end of ten days, like, if you dried for fifteen days and you didn’t actually dry anything and you had to pull the floor out anyway okay. If your equipment is on the shelf, then you have a negotiation piece. But if your equipment’s flat out, you’re in a cat, you’re busy, why are you putting yourself at that risk? You know what I mean? So it would become one of those things. And if there’s adjusters on here, if you if you wanna if you disagree or agree. But I always wanna give the adjuster, like, if I’m the professional that they’re coming to, here’s the solutions that I’m putting in play. Here’s what you need to do in order to react to it. Like, you have option a, option b. Option a is cheaper, but we gotta get moving. Option b, if you don’t respond, I’m gonna go with option b. And then I’m gonna follow-up as, like, two, three times because if I ever end up in court, I wanna be able to say, I did everything I was supposed to do to move this job along. I stopped at this point. I told them, if you don’t respond, I’m gonna go on b. If you respond, I’m gonna go with a. And so let them adjust. And if they don’t adjust, that’s on them. But at the end of the day, be a solution provider. Don’t don’t be there and be like, hey. What do you want me to do? May not be trained in your craft. Like, don’t assume that they know water damage like you do. You’re the professional. That’s why you’re in the business. Provide recommendations and then provide your options and let them make a call and give them a rough order of magnitude. Hey. If I get started today, it’s five, seven days of drying. You’re gonna be somewhere, like, fifteen grand. If you don’t do that, you’re gonna be, like, twenty eight thousand dollars and and a lot more demo. How do you wanna proceed? Like, that is a compelling argument for an adjuster who has, you know, thirty files hit their desk in the same time you hit you had thirty files at your desk. To help them make decisions. That’s a good word. Seeing lots of in the comments. Here’s a good question from Patrick. He says, what did you do to increase the sales, marketing, etcetera? We didn’t increase the so you know what? We did we went hard, and it was probably back when I was talking about we fired our client. We went in and and increased it. We lost forty percent of our revenue, and we replaced it with higher margins. We went to better insurance companies, and we went to property managers, customers that we owned, and we had the relationship with. So we went to property managers that had more doors, and we got a little bit know in Canada, like, eighty, ninety percent of our work was was we call it program work, but it was, like, insurance company direct. No TPAs. But we had one insurance carrier that changed their philosophy on us. So they changed from being a a good company to work with to a a bad company to work within our area. And so we fired them, and we strictly focused on building our business on new, higher quality insurance company work. But we did fire department work. We were working directly with fire department. So we went and just said, hey. Let’s get rid of something that bogged us down and brought our business down, and then let’s focus on revenue that we could estimate the way we wanted so we could use more T and M. And we just we just went in and went hard on who did we wanna do business with. Instead of trying to do business with everybody, we went and did business just with those that we really wanted to. Awesome. Thanks, Chris. We have a question here from Brett. He says, do you charge for tech hours? I’ve been told that we can’t do that and lost a decent amount of money on jobs because of this. So it depends. So that’s a depends question. Are you in a program where you’ve signed a contract or not? Tech hours have to be charged for equipment inspections and other things. If you’re it it’d be hard to charge for tech hours if you’re doing extraction and using the line item, and then you charge tech hours for extraction or setting up extraction equipment. It’s it’s built into the line item. So it depends on what system you use. If you just treat time and material, then you would charge for the the tech hours and the equipment rental. If you’re using unit pricing, you have to charge for tech hours because it’s not included in your equipment monitoring. So it it kinda depends on your system. But yeah. Tell you what, let’s keep going forward, and then we’ll we’ll come back. We’ve got q and a coming up here. I just needed a quick break for for being able to rest the voice. Let’s keep going. And then what we’ll do is we’ll get through this, and we’ll get to the, the first break, and then we’ll keep moving. So when we look at it, the other side is when is value pricing gouging? Because I told you that we could charge more for the work we’re doing. So if I you have to ask, like, what is a price gouge? So if I’m an adjuster and I’m used to paying a hundred dollars for an item, let’s just say say, hundred and fifty dollars for a dehumidifier, and this is actually a real case that I had, is price gouging is is is price sensitivity. That’s what we’re talking about. So when someone’s used to paying a dollar for a Coke or a dollar for a Pepsi, are you price gouging when you go to the gas station, they charge you three dollars for the same can? Or you go to the sporting event, they charge you seven dollars for the for the exact same thing. What’s price gouging? Price gouging is is you’re you’re allowed to set your price inside a market however you want. There’s essential services where essential goods and services that are required by law to not have price gouging. But what is price gouging? So I had an interesting case that I had to work on years ago, which was a church. And this church had where they brought in a restoration company. Now this isn’t the actual church, but they brought in a restoration company. And I was working for an independent adjusting firm, and the manager came in and said, hey, Chris. You gotta be able to look at this. These guys are charging crazy rates. And I’m like, okay. So they were charging twenty five percent more for their air air movers. So if an air mover was thirty dollars, they were charging forty. But they were charging, like, a hundred percent more on their labor. So if it was fifty dollars at the time, they were charging a hundred dollars for their labor. And they’re like, this is, you know, absolutely crazy. This is out of the line. And I went through and I looked at it, I looked at their contract, and their contract has said all these these are our normal rates. This is our rate schedule. And the price was twenty five to fifty percent higher than the market. And so when you look at it, a job that was ten grand was coming in around seventeen five for for the same work, if you’re just putting them in perspective. And so when we looked at it and hit the desk, I looked at it and said, well, this is their normal rate schedule. And they’re like, yeah. But has this number, and these guys are way above that. So this is price gouging. It’s like, well, no. They set a premium price. They literally catered to the church market. And so what they understood is they understood that they need to get in there, save as much material as they could, get the church up and running for Easter. And then if they could get the church up and running for Easter, the church did really well financially. It’s a business transaction that at religious holidays, there’s more money to come in. So they got the building up and running, and then they did the rest of the restoration after after Easter. They charge a premium for that because they understood how the church works. Whereas a normal restorer comes and just treats it like, well, we’re gonna put our equipment in. We’re not gonna work overtime. Here, they were like, hey. We’ll get you back up and open for for Thursday. Perfect. And that push is why they charge more. Is that price gouging? The value. The the the priest at the church or the church organization saw value in it. They signed the contract. They agreed to the value. When we got down the insurance company side, the justification for that was it allowed them to have less business interruption. Problem is that wasn’t the insurance company’s concern because there was no business interruption insurance, but it was a factor into why the price was higher. So when you look at it, you’re like, okay. That’s is that price gouging? I could’ve got it for less. But would you have got the same service? Would you have got the twenty four hour response to get the building open as fast if you weren’t getting paid that premium? And it’s a fair argument. In that case, I went back and recommended payment because they did what they were supposed to do. They executed it. They followed the standard. They did a really good job. But was it price gouging? And the answer is no. When you value price, your price could be is is detached from your cost. So there is no way to go back and say, well, I should have got it for this. No. Because you gave them a price. And the way that they did this at the church is they did a rate material, but they had a value price built into it. As they said, this is our rate. It’s a higher rate than others, but the value we’re selling is we’ll have you open. We’ll warranty it, and we’ll come back, and we’ll make you guys an extra good. So they put rate material and tie value pricing into their sheet because of what they offered, and they guaranteed them that they would have them open for the holiday. That’s perfectly normal, and that’s that’s normal business. In insurance, though, when you have an insurance adjuster who’s looking at it like a commodity, they would say, well, that that that price was too high. And that was the problem we had within the organization is adjusters were looking at what they normally could get the rates for versus what we had to pay on this job. Exactimate covers that by saying in their unit prices, the median rate, sometimes it’ll be higher rates and sometimes it’ll be lower. In this case, it was just justified. They just added value. And so when we look at it, the other side is is is perception. Adjusters will have a perception of price gouging. Right? Price gouging is when the price is higher than what they expect. What is the right or wrong answer around it? And and it’s really not there. It’s if I’m gonna restore, I’m negotiating up front. These are my prices. Where we get ourselves in trouble is if you don’t negotiate up front in your contract and you don’t have the discussion with the adjuster up front, then what they’re normally used to seeing or how they wanna do business is how the business is gonna roll in the future. So when we look at the value price versus price gouge or any price, maybe your unit price is just higher price than that. You what you’re doing is you have to come in and sell it before you get the agreement. So you sell this is the reason our prices are higher. This is what we’re gonna provide you. We’re gonna provide you warranty. We’re gonna finish the work. All of us are trained. We’re trained at this level. This is why you’re paying a premium. You won’t get any calls of complaints from us. Whatever your value pitch is, that’s why they’re paying a premium. And so a few years ago, I had a claims manager in Manitoba come up and say, hey, Chris. We pay twenty to thirty percent more if you stop the phone calls coming to our phone. We’ll give you twenty or thirty percent more money. Just stop the customer complaints coming in, make our lives easier. We can afford to pay a little bit more. And what they’re doing is they’re basically adding value as, hey. Complaints go down. You spend a little bit more money so you can make the the small problems go away, which means maybe you paint a wall occasionally here and there that isn’t in the scope. Make the complaints go down, our customer loyalty goes up, and you make more money. It’s a win win, and they’ll pay for it. But if you’re expecting a premium pay and you get customer complaints, you’re gonna be not on their list very long. So that was an old school way of doing business. Still works really well. Right? Because they’re sitting there going looking at customer retention, and they value customer retention and customer experience as a big part of their insurance business. So when you start to look at it that way, that’s when value pricing or adding value to your price comes into play. When we look back at that church in that specific example, the customer was the one that was dictating the value. Hey. We need to be open because if we aren’t open, we lose all that revenue from Easter. And then the church is like Christmas, Easter, and then probably like weddings. Right? Like, those are revenue grounds. But for holidays, Easter and Christmas are the two major ones that you you have to be open for. That’s all they did. Hey. Open it up. We get our revenues, and you just look at it like a business. Now if you don’t like looking at religion that way, it is it is what it is. But that company specialized in will get you up and running. And so they made the place smell really nice. They they took care of the equipment. They wrapped it up on on Thursday night, put it back in on Monday. Everything goes smooth. When we start to look at bid and lump sum pricing, though, this is where you start to come in. And, you you can get multiple bids in. What are you doing with the bids? Well, if we have three bids that got submitted to an insurance company and the three bids were were submitted, how do you come up with your price? How come the bids can be really close and then you get that one that’s, like, really high or really low? Right? So what happens is that an insurance company typically should remove the top bid. If it’s if it’s outlier on the top, they should consider removing that one. If it’s an outlier on the bottom, that’s not good either. That means somebody completely missed something because your bids, if you do it, the way you get to a bid number is it’s time and materials. How much time do I think it’s gonna take to get there? So when we look at a bid, it’s how much time. You can use unit pricing or you factor in. You’re like, okay. If you wanna use here here’s something for bids. If you wanna use an Xactimate for your bid, you have to understand if your costs are there. So anytime you submit a bid, you have to know your costs before you submit the bid. Don’t submit a number and then come back in. We had a company that did that, and they went belly up. They were doing two million in revenue, and they bid on a large project, a million dollar project. They didn’t know their costs, and they end up losing the business. But if you look at doing a bid, your bid, you should know all the cost on your bid before you submit it. So if if I have my cost figured out and the next company has their cost figured out, we should be able to come up with relatively the same number. We might be a little bit different depending on our margins and our profit mark profit budgets. Right? So if I come in and we say the job should take a thousand hours of drywall, My cost is sixty five. There’s a sixty three. Like, we should not be too far off on there. There should be sixty three thousand dollars in drywall labor either way. Sixty three, sixty five. We’re not far off. If that number is thirty, that means somebody said that they could do it in five hundred hours. There’s a problem there if we’re really low. So when we look at bids, you’re basically accounting for all the time and materials that go into it. You could use your unit pricing system to get you a bid number, but you have to then go back and verify that your costs make sense of it, your scope is good, and that there’s nothing missing. Bids are incredibly interesting when you watch two skilled project managers bid a a job. Usually, they’re within ten percent. Ten percent up or down from the number is not unusual. Ten percent high, ten percent low, which means you have a twenty percent band between the the potentially, the the legit bottom price and the legit top price. It’s probably about twenty percent. If you’re below that and you’re, like, thirty percent low, that bid should be eliminated from the from the process. There’s almost no chance in a multi bid that you’re gonna get someone that low that can do the job. So when you look at your bids, you’re looking for something of like kind and quality. You should be looking for the numbers that are very similar. Occasionally, you’ll have two companies overbid it, but most of the time, what what you find is that if there’s a really low number or really high number, those ones should be considered or or at least looked at with a high degree of scrutiny because I’m gonna be looking for where my my basis is. If I’m doing a larger bid process, I’d probably want five bids in there, and then you can pull the top and bottom out and then select the lowest out of the the three. But, yeah, bid process is a great process as I don’t expect to win them all either. I’m trying to lose sixty to seventy percent of my bids. That means that my price is high enough that I lose most of them. And the ones I’m winning, I’m winning it, and I know I’m making my margins. If I get tight, I can maybe move that number up to fifty percent. If I’m winning eighty or ninety percent of my jobs, I’m leaving money all over the table because I’m not I’m not competitive. Someone else should be winning some of these bids. And so it’s a mindset when you look at pricing on lump sum and bids. But lump sum and bids is like gambling. So you get to you get to be the house, though. You control the odds. Right? So if you were to look out if you were to look at the scope of work, you get to understand what everyone else is looking at. And so what’s interesting is if you were looking at, like, playing the casino, you can choose to place a bid. You could choose to pull your bid back. Right? You can walk away from a job if you don’t think that you can make money on that bid. Now if you’re looking at the at the game, you look at who you’re playing against. And this is where experience comes in, and this is the soft part of the estimate. If you’re sitting there just playing the unit pricing game and you’re just running it through unit pricing, like, hey. It’s a four hundred thousand dollar bid. That’s our number because that’s what the units told me. You probably missed a bunch of stuff that isn’t in there. Like, how long does it take to get the job done? Where are the site conditions? Where are the where are the delays you run into with, like, the building or the HOA? What are you running into? All the other soft factors you have to factor in on a larger job. That’s the thing that separates a lot of the residential contractors from the commercial contractors is all of a sudden, you’re not used to playing with all those delays and and the things you have to factor on top of the unit price. And so those challenges is what holds you back. If you don’t understand the delays of a bigger project and you try to play it with, like, a small residential system, you’re in two different worlds. You haven’t factored in that fudge factor that’s gonna come into play. Tell you, we had this I had this project manager. So I I love this story. He took me out. We went out to a a job, and he he asked me to walk this site with him. It was two thousand ten, but we ended up having this project where he’s like, hey. Whatever you do, don’t say anything. Just, like, nod with me if it’s a yes and just shake your head if it’s if it’s a negative. And I’m like, okay. So we walked the site with the project manager. We had these two junior project managers that were competing for the bid. And all of a sudden, Rob’s out there. He’s telling the story, oh, you gotta consider all this. Hey. You also have to consider this. You agree, Chris? Like, this is pretty complex, isn’t it? I’m like, And then he’s like, oh, you know what? This is gonna be in there, and I’m not sure if you know, I don’t know if we can do it in your time frame. And I’m like, god. God. It looks like a a head shake this way. And so we’re going in there, and and we walked through this job site, and he’s just, man, he’s just showing experience all over the place. And I’m sitting there popping my eyes. He’s like, I think we can do it. You know, it’d be a push. We might get it done. We could hit your numbers. We could hit your time frames. Chris, we’re gonna have to throw some resources on him. Like, yep. The other two project managers were silent. And what he had done is he had noticed that they were in out of their their element. They didn’t know what he was talking about. So he just hammed it up with experience and just made it look good. We got in his car, and as we’re driving back, he’s like, hey. He’s like, you know all that. He’s like, you know we’re winning this job. Right? And I’m like, I don’t know. It’s a big job. He’s like, no. No. It’s a pretty simple job. Goes, the problem is the other two guys are really green, so I just made it look so complex for them that we set the expectation that their price is gonna come in high. We we got the job. Sure enough. We won the job by about ten percent, and he hit his margins because what he did is he had put all of that soft all that soft cost into the job. He put into the heads of the project managers. And because they didn’t have the experience, their mind went the price is way higher than it should be. He came in just below where they they repositioned them. And so that bid becomes a a strategy where you’re playing against the other people you’re bidding against. I watched it unfold, and I was like, man, that was that was just a master class in negotiating large loss when you have everybody on-site. You’re trying to dictate how complicated it is, and then you’re trying to come up with your own scope in your head. And everyone agreed what the scope was. It was just what was the price. And he hit his numbers, and he knew what he was doing. But that was where you watch semi experienced project managers take on the pro and and come up with a number. So that’s interesting. And then we had project managers that could execute that job, and you hit your margins all day long. So when we look at this, we look at the at our lump sum bid pricing. It’s a combination. And so the things that you have to factor in is that risk. That’s not factored in in your unit pricing system. You don’t have unit pricing where you change the risk profile in your unit price. You do that in your bid and lump sum pricing. So increased margin risk means that you get to increase your margins if there’s more risk that you’re gonna lose money. If there’s a bigger chance you’re gonna make lose money, then you’re gonna charge more for it. So that’s why on on rate material, I would take it as I’ll get less money on it, but I guarantee my profits. I will I will make less on on rate material in exchange for guaranteed profitability. The the other side is it’s the reverse auction. Right? Low price wins. And so in a competitive landscape, when you’re bidding against people, there’s not both auction that happens. And this is what you have to be aware of. Consultants and making up their vapor numbers, it doesn’t count. Like, a vapor number if I’m a contractor and I’m going against the consultant’s number, I have to know mine are real. So I have to know my cost and my profit and my charge out. On a consultant’s number and where adjusters get themselves in trouble, they’re writing a an Xactimate scope with a number. That number means nothing if you can’t attach it to work being done. A consultant that comes in and says, that job was worth five hundred grand, and you charged a million. If you were never prepared to do the work, that number doesn’t count. That number is a fake number until you tie it to real job cost and real risk. So the only numbers that should be considered are real contractors who are ready to do the work because they have to take on that inherent risk of the job. And I can give you a number of a dollar. Doesn’t mean it’s right. If it’s ten thousand dollars and I say it’s three thousand dollars, they’re just opinions. Until somebody is willing to do the work and put their business online, those numbers are vapor numbers. They’re not real. And so when we look at it, it’s a it’s a reverse auction. It’s basically they’re looking for the lowest price. Just make sure you’re you’re competing against somebody who actually has real numbers. Sometimes you’re gonna walk away. If it’s a consultant who comes up with a number, but they don’t know how they came up with the number, they didn’t attach it to real cost, you walk away from that number. And I’ve watched a lot of court cases go in where they attach a vapor number and say that’s the that’s the settlement. The settlement is three hundred grand. You haven’t attached it to any real numbers of anyone that’s actually doing the work. And if you don’t do that, it’s pretty flimsy. I would watch that you don’t get into those reverse auctions. Then we look at why would you use bid pricing. So there’s no review process after you submit a number. It’s, like, limited. My number is this, and this is the number I’m submitting. I’m submitting it for this scope of work. If we open up the walls or we get into the business and there’s there’s different changes in scope, I’ll put a change order in. Be very careful not to be the company that puts, like, massive change orders in, but you’re effectively going in and and writing a number for what you know and what you can see, and you battle the contractors. Like, that’s when I’m in competing against another contractor. I’m like, I like an experienced contractor to bid against because I can learn from them. I can learn how how they won the bid, how we lost. And, again, you’re getting paid for those soft things, which both experienced project managers or estimators should know. When you watch your business, you can get yourself into trouble. And I told you about this contractor where they overbid. So greed and ego get into the play when you play with large contracts, especially when you get into larger bid items. Now for you, it might be a hundred grand or a million dollars or ten million dollars. Whatever is large for you, watch your bids. You have to know your cost before. We had a contractor that was doing a mitigation on a building. Everybody else was in the two to three million dollar mark. His bid was a million dollars, and it was one point eight million in real work that needed to be done. So he was stuck on his bid. They bled him out because he couldn’t get paid. And while he was doing his bestest job, his company went upside down. His company could not go into the business and and effectively execute because he bid a hard bid on known scope of work too low because he didn’t do his job costing prior to submitting his number. And the insurance company should not have given him the the the job because he was so far low from everybody else’s bid. So effectively, his mistake, their mistake resulted in a contractor going out, and then the job ends up costing more because it still has to get done. So it costs more in the end for everybody. When we look at the unit pricing, when you see this picture, what do you see? Right? I see unit pricing everywhere. And this is how you gotta start looking. I always look at, like, callouts. They like like, they pop out of your oh, here. What do I see? I see eye protection, Seven dollars. Right? Respirator cartridges. Gotta change those out. You got the respirator. You got the Tyvek suit. You got the nitrile gloves. Although, those look like latex, but they you got the nitrile gloves. You’ve got, you know, knee pads, rubber boots. You got booties on the bottom. Like, you got all this stuff that you could charge out here, then you got pump sprayer. That’s piece of equipment, and then you got consumable that’s inside of it. And there’s so much application that we figure we’ll get from that pump sprayer. So how much will a gallon cover on the ground? And if you do unit pricing, you have to think this way. So before you get into Xactimate and you get good at Xactimate, you really need to start thinking about unit pricing as every single thing has a a number attached to it. And that’s how you have to wrap your head around this. Everything that you miss in a job is dollars going out. So I don’t care if you’re using Symbility, Xactimate, or something else. You have to be thinking that every specific item that’s that you see on a job has to be charged for. So a ton of questions came in prior to the when you guys registered. Bunch of questions like, hey. How do I charge more? So I could show you buttonology and say, well, there’s this line item and this line item, and it may or may not apply. Here’s what you need to think about. The complexity of pricing is how you’re gonna have to look at this. So you’re gonna look at this as, okay. How do I build this person out? So if I look at a technician as, like, a an avatar, like, a gaming avatar, it’s like, how do I kid them up? Well, I don’t put a respirator on. There’s a full face. There’s a PAPR. There’s a supplied air. Well, I’m gonna put a PAPR on. Okay. We’ll rent that over a hundred dollars a day. And then those cartridges, we’re gonna change those up. How often do we change them? Let’s say once a day. So I can’t charge for cartridges. Your unit pricing mindset has to be, what is my cost on those cartridges? What is my margin need to be? And then what’s my expected change out? You have to know all that because you’re submitting a bid. What if your cartridges change out every four hours? Now they’re not gonna change out every four hours, but let’s say that they did. You need two a day or they get contaminated, so you have to change them up. Well, that’s now eroding your profit because you didn’t charge for it. So unit pricing has to consider everything in there when you’re pricing it out. So when we look at this and we say, well, how are we gonna look at it? The complexity of the unit price is really simple. A simple one is a piece of equipment. It’s a piece of equipment. It’s a single consumable like a zipper, or it’s an hour of labor. That is the simple unit price. We use that in rate material. So we use that for rate material. We can go in and we can say that one piece of equipment or that one hour of labor, that is the most simple unit price we can come up with. What happens is you get into difficult ones, like extracting the floor or cleaning the wall. Now all of a sudden, you’re combining four or five different units together. So we say, well, there’s a labor component for for the labor. So if we’re if we’re wiping a wall, we’ve got the labor component. Yeah. Hold on. Let’s just talk about a wall perspective. If we’re gonna do a wall and we’re gonna clean the wall here, to do one square foot of wall, what do we have to do? We have to clean the wall. So I have to apply detergent, let it sit. Well, that’s time. Then I gotta wipe it. Oh, that kinda worked. Then I pull my cloth off, and I wipe it again, and then I rinse it. Okay. That’s cleaning a wall. So if I clean a wall and it’s three steps to do one square feet of cleaning, And I’m like, okay. But there’s material, there’s consumables, there’s time, there’s inefficiency, my lunch, my breaks, my travel, all has to be factored into that. All of a sudden, you get into it, and you’re like, man, that’s a lot of things that have to go in. What if something changes? What if I’m now cleaning longer? Well, those those unit prices have to be factored in. You have to change the way the unit price works. So all of a sudden, you’ve got now more to consider. Then you get into the extremely difficult ones where it’s like a price per foot or price per square meter, and all of a sudden you get five or twenty line items put in. So, you know, Australia, they used to have a price per room for drying. It’s like, how do you even come up with that? Because if you were to try to break it down, you’d have to factor in all these different factors. And then if one thing was wrong, your whole price is off. And so unit pricing becomes really, really difficult. And from an adjuster standpoint, if you were to look at it, like that, two coats of paint in one visit versus two coats of paint in two visits, just changing your orders of operation can, like, holy screw you up. When we look at paint labor getting organized, we say, we’re gonna go and get paint. We got labor. We gotta get organized. Then we have to travel. Then we have to set up and prep our space. Then we paint. We got paint material. How much how much do we pay for paint? What do we pay for the painting supplies? And then what’s our labor cost? Right? Then there’s a time that we gotta sit there while it dries, then we paint again, second coat, then we clean up, then we travel back, and we get the truck cleaned up. And on the other side, you have all of that, and then you have to add in another set of trips. Well, you’re painting on that second coat. It’s it’s more, so much more if you have to do two coats and two visits. So if you’re pricing your unit price and assumes that you’re there for the day versus it assumes that you’re coming back another day, that’s gonna be almost a two hundred percent difference in your price. Man, maybe not quite two hundred percent because you’re not sitting there for the dry time, but you’re gonna have a like, a maybe one’s a dollar and the other is, a dollar eighty seven. Right? So it’s not quite two dollars, but it’s a dollar eighty seven because you’re just shy, but you have to do two cleanups. You gotta reorganize the vehicle twice. You gotta travel. All of a sudden, you just blow through the cost of doing your business. The unit pricing, and this is exact to meet Symbility or anything you’re using, is the most difficult method of pricing your services. You have to understand every control and influence that goes into that price, and then you’ve got control the variables. So we call that factoring unit price, which is if you were to produce forty two cars an hour at a unit cost of ten thousand dollars per car, you would know what you’re doing. Right? Like, you know, hey. We’re gonna we’re gonna have a cost of four hundred twenty thousand dollars every hour that we produce these cars because we can make forty two of them per hour. What would you do if you’re in that factory? You’re like, okay. Well, what’s our our overheads? We have an office. Okay. What else do we have? We have a plant and equipment and labor, all the things that you have in your business, but we have to produce cars fast. What if all of sudden the process change that we can only do half that number? Well, all of sudden, we’d be upside down. We have bigger overheads proportionate to the amount of cars we make. And that’s what happens with your unit price if we don’t think about it that way, but you’re trained to lose money in unit pricing. Right? If you were trained that one system is better than another, you were trained to lose money on unit pricing. That is literally the the hardest system to run is unit pricing if you don’t know the basis for creating a price. And you can quote me on that because that’s I’ve heard so many people say, oh, that, you unit pricing is the best system in the world. It’s I used to say that too. It’s not. It’s a great system if you understand how to use it. The best system is rate and material. If you don’t know your efficiencies, if you know everything and you wanna get into, like, detailed fine tuning, unit pricing is great. If you don’t know the pricing and the costing, unit pricing is so hard, it’ll bankrupt you so fast. So you have to understand that unit pricing will drive your price down or your margins down, and it can get you into trouble really quickly unless the people that are doing your pricing or or setting the price understand how you make money. And right now, that’s not the case. It’s really tough process in the industry. Alright, guys. Let’s take another q and a break, and then we’re gonna take ten minutes. And then we’ll come back, and we’ll we’ll keep at her. K. Let’s check-in on the q and a here. Bear with me. So I’ll start with some of older ones we didn’t get to earlier. So we hear have here from Patrick. Xactimate line items is an old process and a waste of time. What are your thoughts for all in one price per square foot? Example, ten to thirty per square foot for mold remediation with a scope that follows IICRC standard. I I like that in the sense that if you build it so Xactimate is a great system. Don’t get me wrong. I’m gonna I’m gonna poo poo on one part of it. Their price list research, I don’t like that because they don’t do a very good job of it, and they don’t have a good methodology in my opinion. Unit pricing, you could come up with the same price if you factored in like, let’s say we’re doing that smoke this discussion, and you said, well, it’s a wet smoke versus a dry smoke. Well, if I knew that their time was based on a dry smoke, I could times that by four and come up with a wet smoke calculation. If I did a test, then I was like, oh, it’s not four. It’s six. I could times their cleaning rate by six to come up with the right cleaning rate. Right? So I like that. If I’m building my own, I’m doing it based on the fact that I know my time and material budgets in my head. I’m like, well, I know that when I do a mold damage or a mold remediation, it’s based on these factors, and there’s ten things in there, and that’s between ten and thirty dollars depending on the factors. But you built your list yourself because you built you built it on your experience based on your rate material knowledge, and then you said, I can turn that into a unit price. That’s when you get to that level, you’re at a high sophistication of estimating because you understood how you got to your price. When you take a price out of Xactimate and you just apply it and you hope you make money, you’re at the lowest sophistication. You’re allowing someone else to set your price for you, and then you hope to make money with it. So there’s two different parts on the spectrum. I like I like that system. I also like the system if you just build your own price list, and and I teach you that how to do that, then you make your own price list. Get it up to the top number. That works too. But both of those methodologies, Xactimate is a good method. It’s the wrong price list, and it’s become a pricing system instead of an estimating system. But I also like if you can build your own on square foot, we did that in Fort McMurray. We had a, like, a ten to twelve dollar light cleaning for smoke damage, and it was, like, fourteen to twenty and then twenty and thirty. And then if it was passed out, it was custom. Yeah. It it it makes perfect sense to to have your own unit price in your head, but you’ve factored in all the factors. And so that’s why it makes sense. Got it. Thanks, Chris. Let’s see. I’m trying to find one that we could maybe answer, you know, before we take a break. Well, this one’s been in in there for a while. This is from Jacob. He says, what do you do when, efflorescence is found on concrete and the moisture is permeating from a unit we do not have access to, but the homeowner has no mold coverage through their insurance carrier. That’s a tough one. So efflorescence is kinda like that fuzz you see come out of concrete, and and so that’s signifying it’s just minerals are are are coming through. It signifies that there’s a a long term moisture problem. So our you know, what is the resulting damage? Like, is it a private job or an insurance job? I I guess the question is is if the insurance doesn’t have mold coverage, would they pay for somebody’s preexisting problem or something that’s the defect in the building or normal for the building? And so is there coverage? Typically, in most policies now there’s some policies that have a little different wording on there. But for most policies, it’s sudden and accidental. It doesn’t include seepage or leakage like that. So there’s it’s almost always a private job, and it’s always private mold job with a different underlying underlying problem. That’s a tough one to like, you don’t like, there’s a lot of unknowns in that question. Like, what what’s in the other unit? But if you see efflorescence coming in through the concrete, it’s normally part of like, it’s it’s long term issue with the building. Not necessarily it’s it’s wrong or bad. It’s just part of part of the building makeup. You see it in a lot of, like, really old homes. Like, if they’re, you know, turn of the century homes, hundred year old, hundred and fifty year old homes, it’s not uncommon to see that. Right. Alright. Let’s see. We got time for one or two more before you wanna have a break, Chris? Sure. Okay. Here’s a bit longer one. I’m getting a bit in the weeds on pricing here. It’s an anonymous question. It says on a fire claim, heavy smoke, soot, cruise in full PPE, no power or heat. What are some recommendations on how to bill out the content, packing hours, and boxes in Xactimate? Yeah. So so it’s a good question. Again, you’re in an environment. So so you hit the the harder the environment is, the more I lean to rate material. So no power, no heat. Cut teams are in PPE. So it means I’m putting in temporary power, temporary heat, and I have people on full gear. Their efficiency of packing a box, if you were to use, like, the the pack line item box or pack box line item, that’s for one environment. It doesn’t tell you that it’s for a normal environment, a clean environment. So I assume that they didn’t do it in a a hazardous environment. So if you’re now working in that that with that material in those conditions and you’re trying to pack a box in PPE, you’re gonna be slower. So that’s where I would shift over to rate material. Or you do some packing and you find out that, hey. I can only pack a box. It’s fifty percent slower. That means your price per box doubles. Really hard to justify that. Like, it’s hard to explain it if you don’t understand the system in detail. You could, but it’s just easier to switch over and be like, hey. We’re working in these conditions where we use rate and material because the line item pricing doesn’t work. If it does, you document how many boxes per hour you can pack, and then you go back and change the production rate in exact so it matches what your production rate was in the field, and you get to the same thing. Again, that’s why I said if it’s rate and material, a rate material using the exact same price retail price should be the exact same unit price because it’s just an extrapolation. If it if your unit price says it’s, let’s say, sixty five dollars to pack a box, well, they made a bunch of assumptions into there. And then if your rate and material is a hundred, well, that just means that your unit price is wrong. You have to go in and and modify your rate material sorry, your unit price to to make it an hour. You have to change the efficiencies to get to that hour. That’s all it is. So, like, literally, the the the exact same price should be there whether you bid it out, it’s unit pricing, or it’s t and m. It should all be the same. Problem is is if the insurance company says you can’t modify unit prices, well, then you have to go to a rate material because the unit price will be wrong. That’s the short answer to that long question. There’s a lot there to unpack. Yeah. For sure. What’s interesting is I did this private equity back in two thousand ten. It was one of Canada’s first private equity acquisition. But I’ll tell you the interesting part about going through private equity is and I was talk just talking about this last week with with a bunch of restores. When you’re in private equity, if you if you look at an independent restoration company or you work for a franchise, it’s usually a different mentality of, you know, we’re there to serve the community. We’re there to help people at their time of need. When you work for private equity is you gotta do that, and then you gotta turn a profit. And what’s wild about private equity is they focus on financials twenty four seven. It’s not a fun environment when you’re losing, and it’s it’s it’s tough environment when you’re winning, but it’s it’s a discipline that is important for people to understand. Because of the volatility in our in our market, being able to generate that profit on a consistent basis is a really unique skill. And in two thousand ten, when I was with First On-site, under the Torquest, financial private equity firm, we were looking for profitability. Now the year before, I had actually helped the company turn profits, and then I went over to to them, and I was recruited to increase profitability. And what was wildly interesting is as we got in there, we started to see all the different levers that you can pull. Right? All the levers you can pull to make things change, and and you’re looking for how do you drive more profit in so so you could do cost reduction. But what happened for us is we looked at estimating, and we had broken out our estimating from unit pricing and rate material. And what we found is whenever we did unit pricing, we were about fifteen percent lower profitability wise than when we did rate time and material. And so when we started to look at our business, we were like, man, that really comes in as a as a red flag is I was always told rate material, time materials, would be lower margins than Exact. Everyone says, oh, you get better margins, but that’s not what we experienced. We experienced lower margins in Exact. And so when we went back and I broke it through, I had to go through the training process of identifying and dissecting why was unit pricing coming in lower when we had rate material that was higher. How come that was happening? What we found is it’s a double edged sword. And the difference that was happening there is the way we were being taught in the industry, and the same thing that’s happening today, is we were teaching buttonology versus estimating. And my top project managers were real estimators. They knew their costs, and the system of Xactimate was a method to get to a price. What others are doing is using the buttonology and hoping it comes to a price that makes money. And I’m gonna just talk about that in this section because estimating and buttonology are completely two different things. And so when we look at that, when you’re under the pressure of private equity and they’re focused extremely high on on that on how much money you’re gonna turn, it’s okay to ask yourself, what is the difference? Buttonology, the way I describe it, is effectively learning how to use a computer system. Honestly, I would never have figured this out into the same clarity if I didn’t work at �Թϲ�����. So in �Թϲ�����, when we built the systems, you build systems that fit an industry, like the industry processes. And at times, you have to make some considerations or some you have to you have to trade user interface for for technical capability, right, or technical correctness. And it wasn’t until I I got through that process of working with �Թϲ����� to see, hey. There’s times when things are really complex in the field that you have to modify how you do things. Then then I looked at the estimating systems and went, we’re being told to do a lot of things different because their system is not robust and it’s archaic, and there’s a lot of things that it doesn’t do well. And so you’re taught buttonology how to make their system fit the industry, not how the industry fits. Like, their system doesn’t fit what we do. We have to fit into their box. And that creates some con some some, I’d say, conflicts or some compounding impacts to your business. When you’re changing the way that you would naturally do something in order to put it into a computer system so you can get a result, and that’s the weird world we’re in right now, Is in order for us to work with an adjuster in the system, we actually have to look at how are these systems come together and how do they function from the insurance company side, from the contractor side, and then from getting the actual job done. And I was furious because I went on this three day training in two thousand ten, and I took all my staff with me. We went to Calgary, and we went to do estimating training. I said, hey. I need to learn profitability. And I need to just tell me when we’re gonna learn the profitability piece. And the instructor said, no. No. You’re just here to learn how the program runs. You figure out how to make it profitable. And I was furious because I had talked to sales, and they said, hey, Chris. You know what? When you come to this training, you’re gonna learn how to be profitable. Just, yeah, sign up. We got ten registrations. I paid a lot of money for our teams to go, and then I had to call our CEO and be like, hey. I screwed up. I don’t think we’re gonna learn any of that here. He’s like, well, you make the call. You figure it out on your own. You’re a big boy, but you’re gonna have to figure out how to get your branch profitable. And that was the focus that I I took then, and it became really clear now, is that buttonology of how to make a program work doesn’t necessarily result in how to drive a good profitable estimate. They’re two different things. And if you don’t realize that, you think that you’re getting training on estimating because you’re learning the computer system. And really what you’re getting is you’re getting buttonology so that it kind of fits into the industry we’re in. So change your mindset right now and be like, instead of being like, what does Xact do for this and what does Xact do for that? Change that and go, that’s the system of how we get our number presented to an insurance carrier. The backside is you have to know how to do it yourself. You have to have the skill set to figure it out. If you don’t have that, you’ll almost always be running up against margin compression. Alright. What we do is when we look at it, another problem that we have is we have some of the most skilled people are not on the computer system. So we put in our our least skilled people. We’re like, hey. They’re really good with computers. They can become an estimator. Well, that’s good at data entry, but that doesn’t solve for getting to the right number. If you if you actually look at estimating, estimating is simply a process of what is the scope, then there’s the digital side. How do we actually have to enter it? What is the cost? So is the scope right? Does our time budget time material budgets allow for this scope to be this amount? And then what’s the actual execution? Before you submit a number, you should know your budget’s profitability. If you don’t know if you’re gonna be profitable when you submit that number, then you’ve already done something wrong. And so if you don’t know if that number that’s going out the door is gonna be profitable until after the job, you’ve made a mistake. Now when we look at this, we go, well, how come this happens in this industry? And there’s a problem that hits the industry, and it affects everybody. It’s called the Dunning Kruger effect. And your estimators will have this, and you’ll get this. And it’s a really interesting phenomenon. When we look at the Dunning Kruger effect, it explains a lot of things about why restoration is really hard, and it gets why it gets harder over time. So if you get into the restoration, you’re like, oh, man. I thought it was easy before, and all of a sudden, I feel dumber, or I feel like an impostor. Impostor syndrome kicks in because when we look at the the Dunning Kruger effect, it’s the confidence versus the knowledge scale. And so as we look at it, we say, hey. When we get started on something, our confidence goes way high. You become the ignorant FNG. Right? Everyone’s got them. It’s the ** new guy. And those people that are in your business are so cocky and arrogant because they learned a little bit. Maybe they learned a little bit about Xactimate. They got their level one certification. Maybe they took the WRT, and they learned a little bit about drying buildings, and now they think they can dry, you know, the cathedral. You get a little bit of information, you get cocky, and then what happens is you start to learn what you don’t know. You start to see the things you don’t know, and you get into this fear and into the minors. And this is where you’re not good enough to be the pros, but you have more knowledge than the new guy, and you know there’s a lot you don’t know when you get scared. When you get over there, become a knowledgeable professional. When you get to that point, you’re starting up on the incline until you become a superstar. Now what’s interesting about the effect is it could be on everything. Like, if you’re new at water damage, it will impact you on water damage. If you’re new at estimating, it’ll impact you at estimating. The second you get through the ignorant phase, you get scared. And you’re like, oh, I don’t know if I can do this. There’s other people that are smarter. And you get all that negative talk in your head about why you can’t do something, that’s where this this comes into effect. And what you’ll find is, even when you’re like an old pro, you’re never as confident as you were when you first started. And so there’s that that confidence gap you’ll never get back. You’re always more confident in the beginning. Now here’s the beautiful part about it. If you can get through the curve, if you can come from the ignorant out through the minors and into the professional, what’s awesome is once you get to the end of it, you make money consistently on that ends. Once you get to a knowledge professional or your guru, you start to make money on a consistent basis. When you’re in the minors, you hit and miss your profitability. So fifty percent of our survey today said, hey. We’re making money. Well, fifty percent of you have got through that that miner’s curve. When you’re in the miners, you hit and miss on profitability. When you’re new and ignorant, you lose a lot more than you win. You might just get lucky. Like, the system might work. You you have the overheads. You’re chucking the truck it, and you’ve got the pricing systems of just sort of work. You’re in the high margin work. So even if you make mistakes, you can still make the business run. But what you find is that when you’re in that, you get that false sense of knowledge when you’re in that that new area. What happened to my business is when we had our down year, I gave a bunch of people that false sense of knowledge. I had a bunch of new people that I brought in, and I didn’t give them the training. I didn’t have the time to, but I didn’t give them the training and focus to get them really set on their business. Right? So if I’m teaching them how to be a good estimator, I taught them buttonology. And that was a false sense of knowledge for them, and and that was my mistake is I knew better than at that time than to give them a false sense of knowledge because what I did is I was like, hey. I’m gonna teach you Xactomy. You’ll be the best at Xactomy. You’re gonna know how to enter every line out. What they didn’t understand is they didn’t understand the business around it. And so I’ve had people that had this great sense of they were, like, really good at buttons, but they couldn’t explain it. Or they were really good at buttonology, but they didn’t know how we made money. And what we realized is that I gave them that false sense of knowledge and the profitability dropped. And then what happens as an owner is you rely on those people to come in and and help you. And what happens is if you get that false sense of knowledge, you surround yourself with peers who have that false sense of knowledge. It actually makes you dumber, and it makes things go dumber with time. And what’s interesting is it’s our fault as leaders in the business is you bring someone in, you give them a three day water course, you give them an Xactimate level one, and they feel like they’re on top of the world. And then they go out feeling empowered. You have to quickly get them through that next training curve. If you don’t get them through the process, then they become to the point where they get into the minors. They feel the impostor syndrome. I don’t know what I’m doing, and they make bad decisions. That is why we see businesses fold up when their new new restoration company starts is they don’t get through that curve fast enough. And that’s why we see estimators fail is they literally think that they’re doing a good job. They think that they should be on fire, but they don’t have enough knowledge about what they’re doing. And that’s where we can divine technology, the technicals, and and the knowledge base and combine all that together. And then all of a sudden, you can start generating a profitable estimate or a profitable business. When we look at estimating, estimating is the process of forecasting the cost and resources required to complete a project. So you need to know what you need to do, that’s resources, and you need to know the cost. This may include calculating quantities, cost, materials, labor equipment, and other expenses based on mutually agreed scope of work. The purpose of SMA is to provide an accurate and comprehensive budget that reflects the expected cost, covers overheads, and delivers the anticipated profit margin. You’ll hear me on a regular basis say, I’m not a huge fan of third partying you’re estimating. I don’t think it makes sense in any business. I like it if you’re if you have surge events happen, but for your, you know, nine to five work, your regular work, you should be estimating and and doing that in house because that’s how you figure out whether your pricing and your costs and your labor budgets are all there. If you don’t know how they’re put together, you can’t go out and make money. So if you can’t budget if you don’t know how you built the price, how are you able to go and price a job if you don’t know how you built the price? If you didn’t build the price, you can’t charge for the job. All of those systems that we’ve been given were built to be changed, and you were built to make them your own, the fact that we don’t do that anymore means that we’re disconnected from how we make our money. And so an adjuster who’s using a stock price list, who doesn’t have a sub trade attached to it and says, well, this is the what the real world cost is. It’s just a vapor number. And if we’re writing vapor numbers, your margins get compressed every time you write a vapor number that you don’t know what your costs are when the numbers go out the door. Now we have a poll question here. The processes you have put in place because you were punished by one client, you’ve applied to all clients. So, yes, we were punished for charges, so we removed them. Sort of. We’re more cautious for what we charge. We charge for everything we can and let the reviewer figure it out. Or no, we haven’t had to do that. So if you’re if you don’t play program work, you don’t do that. Now here here’s the thing. If you were punished like, let’s say that someone said, hey. No after hours charge offs during the day. So if you if you said, hey. We don’t charge after hour charge offs during the day, do you apply that to all of your customers? Right? Or is it just to that one customer that you that told you you can’t charge that? Is that the only one you do? And so we’re starting to get some numbers back. And what’s interesting is is just keep the numbers coming in. We got good feedback coming in. Hundred and fifty of you have responded. Keep it going. Let’s see if we can get to two hundred. And what’s great is is as we’re starting to see the feedback, this is gonna be really good for this discussion that we have. Alright. So here’s the results is is some of you apply it. And this is in past sessions, these numbers were actually higher where we had more people that were punished with charges. They removed it across. So, like, hey. You know what? We’re gonna take our most stringent conditions that everyone puts on us, and we’re gonna just modify all of our estimating so that we take all those conditions. So whatever we write, it doesn’t matter who we write for. We’ll just always be perfect. And the problem is if on eight companies, I can charge after hours call out during the day, right, like a service charge during the day, but one company I can’t. What we were finding is my estimators were charging that taking that off of all their estimates. Like, oh, no. We’re not allowed to charge. It’s like, one on one client doesn’t allow us to charge. Don’t self punish us. One of us doesn’t charge because we signed a contract. And when we signed the contract, we said we would not charge them for that. Doesn’t mean we do that for everybody else because we signed other contracts with other contingencies. So one comp company, that’s what they wanted to do. And I saw some questions that said, like, you know, every insurance company has their own rules. Even every adjuster has their own rules, and that’s part of playing the game of the price is I need to know what the rules are so we can adjust our price. Now for the for forty percent of you, you said, hey. We’re more cautious. We’re more cautious for what we charge for. So now what you’re doing is is there’s that negative push that comes back to you. That’s a negative pressure that’s starting to to creep into your business. Then you got a bunch of we charge for everything we can to let the reviewer figure it out knowing that there’s gonna be pushback, knowing that there’s gonna be confrontation. And then for a bunch of you said, no. We haven’t had to. Those are the ones probably playing the private game, or you have a really good relationship with your adjusters. Now here’s what’s interesting is when we look at this, it’s called the estimating trap, and it’s a psychological thing that happens. When we look at it, and I started to discover this in two thousand seven, is the estimating trap was something that started to to pick up on my on my radar is I started to focus on more franchises that we had that were being told, hey. If they did a lot of business with this company, then they weren’t allowed to do a lot of this stuff. And I started to review estimates. And what I noticed is is that on accounts where I knew the SLAs really well, I’m like, why aren’t you doing this? And they’re like, well, that’s because we we’re always told that that’s wrong. It’s already built into the price, so we didn’t charge it here either. I’m like, well, this is a major problem. Like, now what we’re seeing is a rule from one company filters into another company. The rule from this company filters back, so it’s a double hit. Then you multiply that by five companies, and all of a sudden, you’ve got all this negative margin erosion without anyone ever doing it. It’s it’s it’s self induced. And so what we started to realize is that or or what I started to realize is that we started to see these margin compressions that as sales go up and you start to work with companies, your profitability goes down. What what’s happening is you’re applying these rules and programs. So it’s really, really dependent on the companies that do a lot of program work. If you do a lot of program work, you get a lot of this downward angle pressure. So the more program work you do, the more rules you you you get involved in, the more pressure that comes from the insurance company on your estimators or your review team, what you’re gonna see is that they’re being told on a regular basis, that’s wrong. If you’re not allowed to charge for this, you can’t do that. And it’s just every day. You can’t do this. You can’t do that. You can’t do this. You can’t do that. And if you look at an independent company that’s using Xactimate, but they just change the price, they do what they wanna do, they never hear that. So for that small percentage, think it was, like, fourteen percent of you, they’ve said, hey. We haven’t done that because you’re just playing your own price list. When you’re in programs, you’re gonna get conditioned. And it’s to make sure you understand, it’s an agreement. I signed an agreement to get a volume of work, and I agreed to these conditions. It’s nothing more than a a business transaction. But when it psychologically affects your estimators where they then apply that to everything else because they believe it’s wrong, that’s when it impacts your business in a really negative way. You sign a contract saying, hey. I agree to this term for this amount of business, and it’s interesting because it’s like fleas in a jar. And the fleas in a jar scenario is that if you took a bunch of fleas and you put them in a jar, they would be jumping out of the jar. So if you put fleas in there, free range fleas, those free range fleas can jump up. They can jump higher than the jar. If you cap the jar and you put that artificial constraint on them, what’s interesting is the fleas learn their bad behavior. They they learn that they they’re limited. It only takes three days, and then they permanently learn the behavior. They can’t jump higher than the jar. So if you take the lid off, they never jump out of the jar. And then when you remove them from the jar, they never jump higher than the jar. And what’s crazy is those bad behaviors are passed on or those learned behaviors are passed on to their children. So if you look at that in our business, if you’re in program work and your business is heavily dependent on program work and you bring new staff in, New staff are gonna learn the behaviors of your existing estimators. So they’re gonna say, hey. We never charge for after hours work. And you get all this dissent that you see on Facebook. Oh, you should charge this way. You should charge that way. The problem is is that there’s some people that are programmed because of the work you’re doing that you’re like, hey. I’m gonna be more cautious on how I charge. Whereas others are like, they look free and they’re pretty wild because they charge for how they wanna charge for their business. The difference is one has come into a program and you’re constrained, and and we just saw a comment that says, hey. In Canada, I can’t change prices anywhere. Not when you’re on a program. You sign program rules. If you’re not on a program, you can change your price all you want. You’re just gonna have more resistance, so you’re gonna have that constraint put on you. And that’s the interesting thing. And if you get out of Xactimate, you go to a rate material, you can change the game because you change the system. Does that make sense? So estimating is as much about psychology and amount as much about playing the game as it is coming up to a right price. You have to sell somebody on it. You’re being pushed into it. It’s just constant battle about trying to determine the value you can sell for the price that you’re trying to get. The problem is if you’re in a program and you’re being told those rules, you take some of those bad habits and move them into your business. The other side is, though, it picks up some efficiency and some leanness that comes from those programs that you can move to the other side of your business. So there’s a give and take there. There’s some there’s some really good things that come from programs for driving efficiency into your business, and then there’s the negatives. Just you gotta be very cautious on the negatives when you’re told you can’t do something. There’s no rules that say you can’t do something in Xactimate. You can’t charge me for a line item that doesn’t exist there. There’s no rules in the real world. It’s just artificial rules of a jar, and that’s what you’re being told. Okay? That’s what that’s what I’m trying to get to here. You know, it’s kinda the same as, like, if you have a kid, you put them in time out. If you put them in time out enough, right, and we put our kids in time out enough, what happens? Well, we can change their behavior by putting them in time out. And so think about a reviewer if they tell you, hey. You’re gonna not get more work from us. That’s you being put in time out. If you’re doing the right thing, but you’re being put in time out for doing the right thing because someone else thinks it is wrong, you have to make a business decision if that’s right for you. So when we gave up our forty percent of our revenue, we did that because we were being told we were doing the wrong thing. And we made a decision that we were doing the right thing. They weren’t a good client for us, and so we moved on to a different book of business. And we did that because we were being punished for something that was right, and we just didn’t wanna play the game that way. So that’s all you have to do is in estimating, a lot of problems come from you don’t understand the foundation of the estimate, and then we don’t have the systems built properly, and then your client potentially isn’t the right client for the way you need to make money. Now when I started to look at things through the IICRC and and �Թϲ�����, I was on the s seven hundred. And we were starting to look at the discussions that were interesting discussions inside the s seven hundred because as we’re writing it, we were I was brought in to discuss the documentation and and and the processes around that. And what was interesting is you’d hear different people with their different perspectives. So these are trained professionals. They’re talking about how we have to work within the industry. And what’s was wild is for eight and a half years, I was a restorer, but I didn’t actually have to do restoration. I got to work with restorers, so I got to think about restoration more than actually doing it. And what was interesting is as we’re sitting in these discussions with the s five or s seven hundred, you’re hearing people say, well, you have to do this. So if they came from a program perspective, they’re like, well, you have to do this way when you’re in a program. And yet when writing a standard, it’s not for programs. It’s for what is expected of a normal restore. And what was interesting is you started to see people’s learned behaviors being conditioned where they believed that the business had to be done a certain way. When you’re watching it from the outside, you’re like, man, that’s just totally wrong because you have these other ways of doing business. And so that’s where I really picked up on this conditioning within the industry is that once you’re conditioned, it’s really hard to break free of those rules because those are the rules of of making money. This is how you decide to play the game. So I’m not anti TPA. I’m not anti program work. I’m just if you do it, you’re gonna have to understand that you’re gonna have certain terms and conditions that you agree to. Reason I make a big point about this is that that becomes a really big trap for eroding your margins, and you start to apply it on multiple projects. You even apply it to line items. Like, we can’t change line items. Well, if you can’t change them in the system, then you better hope the price list works most of the time for you. If it doesn’t, then you have to go to sub trade because there’s not enough money to do the work, so you have to move it to sub trade. All of a sudden, you add all this administrative burden into your estimating process that doesn’t necessarily need to be there. Does that make sense? Like, the outside constraints will make you more inefficient if all the outside outside business that you do or outside customers that you do put all these artificial constraints on your business, your business becomes more confusing, it becomes harder to run a good number, and then it becomes really hard to predict profitability. And that’s because you have other people telling you how to do your work. So when we avoid these traps, it’s just understanding that you get repeated learned behaviors, and that usually results in in margin compression. The conformity feels safe. It doesn’t feel good to step outside your normal range and say, you know what? I’m gonna, you know, change my price. I’m gonna submit a number based on what it should be because I know what my costs are. Conforming to the system where you get a good scorecard makes you feel safe, but it usually leads to profits eroding, and and it puts your business in a worse position. Even when no pressure’s applied, your rules are applied to estimates. So your estimators, you have to watch to make sure your estimators aren’t reapplying those rules. If you just always wanna come back to that example, the fleas in a jar is like, are we fleas in the jar our estimates, or are we actually writing them the right way? That is a a perfect example of conditioning. When we look at programs versus nonprograms, you’re making changes. Right? So when we get back to looking at struggles in a business, when I got to work with a company in two thousand seven, two thousand eight, we were trying to figure out why businesses were struggling. So as their revenues were coming up, we saw independent independent contractors that would go through this spike where they would have really good profitability, and then all of a sudden, it would tail off and then it would drop. And what was interesting is that as companies got older with time and they got so when they came in and they they’re they’re the NFG, right, and they’re ignorant, they don’t know anything, they’re actually cranking up, like, just living wild. Just I’m gonna estimate the way I need to. I’m doing this, and this is how I do it. Then they their profitability drops. They start to get conditioned in the program. So they go from being independent to being in programs to finding a steady balance. And then what happens is the rules change, but they didn’t get more aggressive. And what we almost continually saw is that margins get eroded. So if this is true in your business, you would have seen high margins early in the business life cycle. The margins drop and plateau, and then all of a sudden you get into this declining scale. That’s usually a sign that you need to overhaul your estimating processes, and you have to go back and rebuild the foundation. Because what happens is you’re now conditioned and then the game changed and your margins erode. What’s interesting is if if you look at an established company in the seven or eight years in the business today versus a start up business, the start up businesses are almost always more profitable than an established player. And the established player has those constraints put on them, and then the rules change and it becomes more constraining and they get less profitability. A new company comes and starts up, normally, their margins go up, and then they get into, like, comfort. If you just rebuild your systems around here, like, if you rebuild back in the in in the where the x is here, then you can get your profits back up. As your as your revenue goes up, your profits go up. But what we saw is that as companies go on, they start bleeding profitability. It’s really wild phenomenon, but it comes in usually around the conditioning around program work is the best I can figure it out. Because companies that come in that don’t get access to program work normally do really good for the first few years. And then they start adding programs, and all of a sudden their margins drop across the board. Programs are inefficient. That’s one of the one of the downsides of programs is that you are gonna be in where you’re getting a lot of pressure on your estimates. So you’re gonna create an estimate, get it in really fast. Normally, if you get an estimate in really fast, you’ve you’ve missed stuff. New technology today with three d, three sixty cameras, little all that technology is helping you get your your estimates in quicker with more accuracy. So with time constraints, like three days, five days, you’re now getting your estimates in. If you’re missing items and then you’re penalized for missing items and asking for change orders, which is silly, because, like, I’m trying to give you a fast estimate. I need to know everything that’s happening before the job’s even started. That program rule is effectively set up to drive consistency on their end, not on your end. So we’re looking for those program rules, and it’s like, well, if you didn’t do the job right, you’re punished. Those rules are set by others who aren’t necessarily focused on you making money. They need to lower costs, and they’re like, hey. If I can get them to lock in a low price, I penalize them for changing the the numbers when they do, then we can condition them to to to substantially reduce their invoices on a regular basis. But the goal is that you wanna put your programs in and use that program efficiency, the inefficiency of program to drive efficiency. So they want fast KPI. You figure out how to increase your efficiency. But what do you get? You get more overhead. You gotta do more file reviews. If you were to deal with, let’s say, that church where you just say, hey. I I get my invoice to the church. They pay me, and I move on to the next job. That process is is an easy process. I charge for fair work. I get paid based on my estimate, whether it’s unit pricing, rate material, whatever it is, and I move on. If you go into a program, then you got all the reviews that go with it, right, all the inefficiency. All of that has to be factored in. Normally, when you get more inefficiency, your price goes up. In our industry, when you add more inefficiency, they want the price lower. That doesn’t normally equate to a good business practice. So that’s where you start to start focusing on how can I use a program if I’m on one to find what’s good for my business, and then what can I get rid of that is bad for my business? And that’s just my caution on program work. It’s it’s how I built my company in Canada. It’s all programs, but you have to figure out whether you wanna play inside that scope of work and who do you wanna play with. Just because you’re on a program with one company doesn’t mean you have to be on a program with another company or follow their rules. If you don’t sign with them, you don’t have to follow it. And the only caveat or or exclamation mark or what you call asterisk would be if you’re on a franchise group or a national group, and there’s penalties for your friends or your colleagues if you don’t play by the rules. Alright, guys. Let’s do another question period, and then we’ll take ten minutes, and we’ll come back and finish this up. Alright. Questions have been kinda popping off a little bit. We also do have some as well from before the webinar. Sure. It’s preregistered. Maybe we should go back and do a couple of those because I wanna make sure those I don’t want those to get lost. So let me just pull up my list here for for my preregistration questions because there are some good ones in there. Here’s one from Mike. He says, what are some ways we can improve communication between our estimating department and our project managers? I’m a I’m not a huge fan of having them split. But if you have them split, they both own the number. So if I so where we had problems in the past or where I’ve seen problem no. I’ve had I’ve had this happen. So an estimator writes a number and doesn’t understand the cost it takes to get the job done. So they they write the top line, and they don’t know what the cost is. And then all of a sudden, the project manager goes to execute the job. And and if the estimator says, hey. We’re gonna make forty percent on a job, but they don’t actually know what the cost is, how do you expect whose fault is it when it’s out? Is it the top line’s wrong, or do they they waste money on the bottom? And I remember I had this chargeback happen to me. We had an estimator that estimated the price using Xactimate, missed a bunch of items, and didn’t account for custom items. So it was I think it was, like, a solid wood door for, like, a front of a very high end home. And we had the door was bid out at twenty three hundred dollars, and we had a thirty four hundred dollar charge on us. And when I went back and looked at the numbers, the estimator made the mistake. The project manager executed or the crews executed properly, but the project number was wrong. The top was wrong. So when you look at that, if you disconnect the two of them, somebody’s always gonna blame somebody for being wrong. So it’s either the top is wrong or the or the cost is wrong, and, hopefully, your your your profitability doesn’t get squeezed. Those have to be, like, lockstep. If you don’t know what your cost is, how did you set your top line price? Like, if you literally just put line items in, we’re like, oh, it’s a hundred grand. Send it in and you haven’t talked to sub trades, you’re behind. Like, you lose every time. So you have to know your cost even if you’re doing unit pricing. Like, if your unit pricing is way off in your area, you can’t do that. So I I don’t like having estimators and project managers disconnected. They should be saddled together on whatever compensation plan you have them on. They should be saddled together. They they win together, they lose together, and they better find margin. Alright. Thanks, Chris. Let’s see. Here’s a question from Brian. He says, what is the best method to save time on-site sketching large properties, and what are some more efficient tactics for estimating? Yeah. So so if you’re not using here’s here’s the plug for �Թϲ�����. If you’re not using Floorplan, you should. That is a big saver. So you should still know how to sketch. Like, there’s complex ceilings that you’re gonna have to add into your estimates. But the technology that’s in the marketplace today, �Թϲ�����’s got it, DocuSketch got it, Matterport’s got it. Like, you’ve got a lot of technology that you could deploy into the business. We didn’t have that ten years ago. So, like, if you look at, like, �Թϲ�����, you use floor plan. You walk around and using your camera in, like, three minutes, five minutes, you can get three thousand square feet sketched out. That used to take us hours on-site. And so you now have that technology for, like, let’s say, twenty five dollars. I don’t know what the price is today. But let’s say twenty five dollars, you can do your sketch and you do it in five minutes. You don’t even have to do it. You can have a technician do it. And if it’s if it’s there on the technician, you’re billing for the time. You wait five or six hours, and you get a a three d sketch that’s imported into exact, and now you tune it up. You do all your measurements. So now you can use technology to to drive some of that efficiency. I like technology for that standpoint. Now I still like to be on-site to write my estimates, but I’ll tell you that three d technology out there where you can see the site. Like, I do a lot of file reviews to, like, verify is the job running, like, normally in a court setting. So I’m looking at a a Matterport, and I look at the three d’s and go, okay. How many lights do they have? You can learn a lot from those. I like them. I like that technology a lot. Things that drive your efficiency, be very good on your knowing your scope. Right? So you have to learn line items. That’s the thing about Xactimate. If you try writing in Xactimate or Symbility let’s say you’re in Xactimate, You you have knowledge in Xact. And then you’re told to write in Symbility. Symbility is a completely different buttonology. Completely different system. Like, you have to think. They’re it’s not estimating. Like, they’re estimating as core root, learn how to estimate. Then you gotta learn buttonology for exacting. You need to learn buttonology for stability because they’re two different programs, two different methods of estimating even though they’re both unit price. So people that come in and think that, oh, I’m I’m learning the exact way and it’s no. It’s it’s exact way is unique to exact. It’s it’s it’s a a computer system. It’s like learning if it’s like learning Microsoft Word and then Corel when when that was around, where it’s like Sheets and and learning Google Sheets versus Excel. Two different programs. They’re kind of similar. They they function completely different. And so you have to understand that that’s those those nuances on those two programs are are very different, and they will get you We actually the the same person who sent that question sent another one along that said, you know, how do you combat an ex an adjuster who’s using Symbility when you’re using Xactimate? Yeah. You they’re apples and oranges for the most part. In two thousand thirteen, when we did the r c it’s a this is a good question, so it’s a deeper answer on this one. In two thousand and thirteen, when we did the RCOC study, when I was working with Deloitte on it, what we found is we were looking for, like, is one pricing system cheaper than the other just like out of the box? And Symbility was the cheaper pricing system. And so insurance companies are like, oh, well, if it’s a lower price out of the box, it means we get a lower cost. Again, these are paper numbers. They don’t they’re not real. Like, if I don’t make any money on on one system versus another, it doesn’t matter. Like, you can’t compare apples and oranges. If you wrote, like, a a ten thousand dollar estimate in exact, and then you wrote a nine thousand dollar in in stability, but it’s actually a fourteen thousand dollar real number, it doesn’t matter what digital system says. What’s the real cost in the real world to have real people do it? And you have to keep coming back to that. If you don’t and you’re just taking the top line of the digital systems, you have no idea if you’re making money or losing money. And and that’s why we see a lot of contractors lose money because they’re relying on the system to be the right price. It’s not a pricing system. Like, I can’t over explain that enough is Xactimate and Symbility are starting points, not a price program. And so the insurance carriers think it’s price program. We capitulate to them and and act like it’s price program. But on a job by job basis, you could lose your shirt on one job if you use it like a pricing system if you don’t know your cost. So if someone wants to bring in stability and say, hey. I can get for less or or or exactly, there’s times when it’s reversed. The number doesn’t mean anything. You need to say, hey. What’s my margin? And does this number make sense? And if someone comes in, like, normally, on stability, you need more line items to get to the same number as an exact. Like, it’s a little bit more detailed breakdown, which means there’s more room for error or more room for data entry. An adjuster with limited knowledge in a system that requires a higher comprehension of learning is normally a bad disaster or a low number. Good question, but it’s there there’s a lot to unpack there. For sure. Sorry. Threw kinda threw threw a bit of an open ended one at you there. So how are we doing for time? We got about, I don’t know, looks like, about sixteen or eighteen minutes, depending on my clock, until two. Maybe we have time for one more question, before our break? Yeah. Or or you know what? If we’re or or yeah. Let’s do one more. Okay. Let’s see. This one’s been sitting in there for a while. It says, if you’re familiar with contractor connection as an estimator, how do you suggest working through this program and getting estimates to be profitable? Most items are rejected. Bid and labor hour items can’t be used in most cases. I’ve been seeing a lot of talk you know, I’ve seeing contractor connection in the chat a lot as well. There’s probably few people wondering about this. So I I I don’t I don’t really have a problem with their like, they set a set of rules up, and you signed the agreement that said, I can play with those rules. Then what happens is and then maybe it wasn’t you. Maybe it was your company. But if you didn’t do the, hey. Can we make money on this program with these sets of rules or the constrictions on us? And they put those rules in place. And if it’s not profitable, don’t do it. Like, you’re a time when you’re gonna trade volume for for margin. But if if you’ve eroded your margins to a point where you can’t make money and their rules don’t allow you to make money, then you maybe can’t do the work. There’s a lot of people that go off the program. However, there’s a lot of people that say that they can make a lot of money in it. So I’m gonna say is it it re like, it requires you to be really efficient. You have to be really knowledgeable of how you make your money and and align your field operations up with your estimating. If you’re just sort of like, hey. It’s another insurance company that we’re gonna do work with, you’re probably in the wrong place because that’s it’s driven by efficiency and systems and streamlining to make money, and they’re they’re not there on like, again, you’re a commodity. So you’re gonna be treated like one. I I don’t disagree with their their their model. It just puts a lot of pressure on your business. Is there a good way to play with it? If the rules say you can’t do it and you sign the deal, where you’d have some leverage is if you didn’t sign a contractor connection deal, and then you’re being reviewed by the system. But the how do you get it? Document. Document. Document. And then have the conversation before you do the work. The hardest position for you to negotiate is after the fact. After you’re done the work, you can’t take it back. So call them and say, hey. I I gotta do this. You know, it takes longer to dry. So are we getting paid? Usually, the adjuster can override any of the contract connection decisions. So if you get an adjuster to agree to it normally, then then it it overrides any of the program rules. But you’re you’re gonna have to play the game extra tight. It’s a it’s a tough program to work in. Alright, guys. Let’s get going. I’m I’m gonna jump into unit pricing, and what’s interesting is this is where we start to to break down sort of what is a unit price. So it doesn’t matter what system, and it was great that we had the question come in before about is it stability or exact to make. And what’s interesting is that when we look at unit pricing as a whole, it doesn’t matter. So it was actually wild in Australia a few years back. They used to have per room unit pricing. And so if you could imagine going into a room and being like, well, that you’re gonna get x number of dollars to dry a wet room, Includes everything. You’re like, well, there there could be a thirty to forty individual tasks in that room versus you go to a different room and and maybe there’s sixty tasks to get it done. Right? Like like, line items that you would need to do. How do you come up with, like, a blind price per room if you’ve never seen it? And and the people that came up with that didn’t have a knowledge of how unit prices are built because you can build a unit price for multiple things being compiled. The and we talked about the simple unit prices that, like, I got a labor hour or a piece of equipment. If you were to grab a an extraction unit and apply it to a job and you were saying, hey. I’m gonna rent it out per square foot. Well, all of a sudden, you have to know how many square feet does that work versus a per day rate or per hour rate. Everything has to be broken down. So we’re gonna break that down here, and it this is the foundation. If you understand this, all of a sudden, Symbility and Xactimate make way more sense to you if you understand this this next lesson. So when we look at unit pricing, a unit price could either be one of these individual items as a stand alone, like a a labor, an equipment, a consumable, or material, or it can be combined together. The more combining you do, the harder it is to adjust that that number. So if I go and look at it and we say, let’s let’s simplify this down to just a material. Materials are crazy because this now this isn’t this isn’t today’s pricing. So I don’t this is from the last time I did this, so I don’t know where today’s price sits at. But if we were to look at a two by four by eight, and you said, hey. We’re gonna buy it for three dollars and thirty five cents, a eight foot board. If you’re gonna do unit pricing, you have to figure it out based on the board foot. And so it’s point four one, Basically, point four two cents. So forty two cents per foot is what that board is worth buying it off the shelf and putting it into the into the job. So here’s the question. Based on your knowledge of unit pricing, if it’s forty one cents or forty two cents a a a board foot, how much does a a two by four cost if you’re only buying four of it? Right? Is it thirty three percent because there’s waste? Is it easier to ship so it’s forty percent off? Is it fifty percent because it’s just fifty percent less? I’m cutting the board in half. How much would the store charge me for that reduced board price? And it’s interesting. We’re we’re getting lots of feedback. So keep the feedback coming, guys. What do you think it’s gonna be? How much of a price do you think if I told you that a a eight foot three eight foot board is three dollars and thirty five cents, how much do you think the store is gonna cost to charge us for a four foot section? So if I had a tree and I had a twelve foot length and I cut an eight foot, I got a four foot leftover. It’s waste material. Right? So is it gonna be thirty three percent waste? Is it is it forty percent? They’re gonna mark it up a little bit. Is it fifty percent? You’re like, hey. You’re just paying per board foot. This is awesome. We go, well, over a hundred people participating here. Is it special order, or is it why not? Let’s just charge more money. And this is wild because when we start to look at how we price versus how the industry prices, We start looking at different things that come in and can impact your price. Can you can you end up poll and show show the answers? If you didn’t participate, you gotta be faster. So in here, it says the majority of you said, hey. Special orders. Two dollars and eighteen cents. Somebody says, like, hey. Seventy four percent more money. Why not? The fifty fifty would make sense. If we were only charging it on a unit price, you only buy the boards for what you have or the board feet that you have. And then some of us, seventy percent said, hey. Wait a minute. Twenty percent said this it should be less. So here’s what’s wild. When we look at that and we look at the price, the materials that they charge is two dollars and forty eight cents for a four foot length. So even if it’s their waste material, they’re not giving you a discounted price. They’re charging you a premium for a short board. It’s seventy four percent of the price to buy fifty percent of the material. So when we look at insurance companies that come in and say, well, you’re doing less work, so we actually it it should be a discount. It’s opposite of what we would see. So smaller jobs, when we look at our smaller estimates, things that you could factor into a fifty thousand dollar job have to be priced in. So when we look at a small job, let’s say it’s a fifteen hundred or two thousand dollar water damage, project management fees, Well, you have to include them because they’re not enough margin in that small job to account for all the project management scheduling and admin that goes into it. So in our industry, it’s a little bit of a a little bit of dilemma in pricing where all the big pricing pressure is on the low volume or the low margin, high volume work. That’s where everyone puts the reviews on. They don’t have reviewers typically on on the not the same type of reviewer. On the large loss large loss, you provide your your bid chart or your your pay schedule, and then you go do the work, and then maybe they’ll bring a consultant in at the end. You have a clerk in the works that validates the paperwork is good, and the number should be paid off of that. But the business is, like, business as usual, TPA work, where the price should be higher on a per unit basis because it’s smaller, is actually getting compressed. It’s different than the market. But the reason you need to understand this is because when you go to write your estimate, you have to understand that there’s a lot of charges that have to be rounded up. So when we look at this, we say when we look at our pricing and we we factor in our cost, our cost difference changes. If we buy a hundred two by fours, our variance from our forty eight two dollars and forty eight goes up. It goes up to seventy eight percent of the price. So if we buy in bulk, the difference gets further away from our price on the material. Now if I’m gonna go come in here and make a budget, right, and I wanna budget off of here, what do I need to budget to be profitable on both boards? I’d have to say, like, I’m doing five dollars per board to make it worth my my while. So in one case, I’ll have thirty three percent margin. Right? And then if I buy in bulk, I get thirty seven point six percent margin. On the other side, I got point eight percent margin if I’m doing that on there. Now that’s not actually the correct margin. I think it was supposed to be where are we looking at? It’s, like, point five eight or four eight. Sorry. It’s a forty eight margin, not not a not a not a not a point eight. But what you have is you have a variable margin that happens here. So if I’m charging my five dollars, I gotta charge it out. If we look at paint, paint’s the big one here. Your unit price on paint doesn’t account for small jobs. So if you’re sitting here and you look at how am I gonna make money, If you need a small amount of paint, you have to change your paint price per unit. It doesn’t have enough per ounce. If we look at the breakdown per ounce, it’s if you’re buying five gallons, how many jobs are you buying five gallons of paint versus buying one gallon or a couple gallons? So if we’re sitting there buying paint, our price margins normally come in on the unit price that make it worthwhile for buying five gallons. But if you have small jobs, you have to dramatically change the price because the price of material for small jobs goes up, not down. So when we did this, the estimated unit was forty eight ninety nine per unit per gallon, and so thirty eight eight cents an ounce was what we were being paid. So at a gallon here, you’re almost in the profitability range. You do hit it on five gallons. Now that’s only assuming the baseline paint. What if you have a premium paint? Well, now all of a sudden, you’re in trouble. You kinda make money here. You really don’t make any money there. And over here, you’re losing money. So if you’re gonna go into unit pricing and they’ve got paint two coats, and all you’re given is paint two coats as your option, not paint two coats high grade, paint two coats Benjamin Moore, you now have to change the paint product price. Now if that’s my cost, I have to add in margin on top of that. And it’s not ten and ten. It’s another twenty percent plus ten and ten. So all of a sudden, you’re getting this really convoluted complex pricing method that you have to account for your different costs. So if I’m coming in and creating an estimate on a rebuild and they need a Benjamin Moore spec paint, well, now I have to come in and add that into my cost because it’s not calculating. It calculated at thirty eight a gallon. Well, just when I looked at the Home Depot rates at the time that we did this presentation the first time, I could get in where I’d be upside down on my paint if I need to put in the premium brand. And that’s not even going to a premium paint store. That’s just grabbing Home Depot’s premium brand. So what we have to understand is you have to understand your cost on your materials before you ever say yes to the job. If you don’t know that scope, you can’t make money on unit pricing. Unit pricing is so constrained on the inputs that go into it. It’s it’s kinda like if you were to look at driving a thousand miles. Let’s say we’re gonna drive a thousand miles. I I just did this drive so I can talk about it. New York to South Carolina. I’m gonna drive a thousand miles, New York to South Carolina. The GPS says it’s eleven hours. So you’re like, okay. Now do the time and material. That’s fuel. That’s two tanks of gas. That’s eleven man hours down. There’s two of us. Okay? That’s twenty two man hours. And then we’ve got wear and tear on the vehicle, and we’ve got our time and meals. If you were to do a take time and material, you’d be like, okay. Put a budget for lunch, budget for supper, budget for fuel, wear and tear on the vehicle, and our time to get there. If you have a a a if you speed, you can you can get that time down so you can get there faster, but you probably still get the other cost. But you can shorten, like, the the time. If you shorten the time up, you might still have increased cost because, like, you’re burning more fuel. So you saved on time, but you cost you more fuel. If you’re creating a unit price, you also have to factor in accidents that are gonna slow you down. Or maybe you get a speeding ticket that’s gonna slow you down. So all of a sudden, have to factor that in to be able say, hey. How many units of distance can I travel for the expense that I’m expecting? And if anything changes in the in that equation, there’s a car accident and you’re delayed for two hours, all of a sudden, things go later than you anticipate, and it costs you more time, burns more fuel, and maybe you get into another meal. All of that is your unit price assumptions. And so you have to factor in downtime. Be like, well, we’re not gonna be making we’re gonna hit constructions. Those are gonna be accidents. It’s gonna be fourteen hours. And so then you would base your time off of your fourteen hours, not off the ten, the GPS. So ten is optimal. You have to price based on fourteen hours. That’s very basic time and material to unit pricing. And then you would say, well, to do a thousand miles, we’re gonna have to come up with a a time budget to get there. Or to do eight hundred miles, we’re gonna to come up with time budget to do that. You’re gonna factor that in. Same thing happens with estimating. I factor in that we’re not gonna have a lot of waste. But what if my paint color, it for part of the wall is a darker color and I need more of it. And then for my lighter color, I need less of it, but I have to buy two different quantities. Well, I gotta factor in the cost of buying two different quantities. One’s a five gallon pail. One’s a two one gallon pails that could throw your estimate off on your cost. So that’s when you come into unit pricing. You have to be thinking about this on, like, a different plane of what’s gonna cover. So we look at any material. We look at consumption rate. How much consumption does that assume you’re gonna roll onto the wall? So if we’re looking at paint, how much coverage will one gallon give you? That’s the yield. And in Xactimate, they call it yield. In the real world, we call them a production value. K? It’s production rate. How many production units do you get out of that one gallon of paint? So if we were to come in and say, well, one gallon will then give us a consumption waste. Out of every gallon, we lose ten percent. What if it priced for you one point one gallons and you have to buy two gallons or you gotta buy a quart and a gallon, but you’re only being paid for one point one gallon. You’re being paid on the on the lower cost. So now you have to go buy a higher cost item. Your paint price is completely off now. You’re not making any money on your material. When we look at, you also got project waste. So that project waste is where you factor in your roll on your your your over or under. So if you were to buy three point one gallons and you have to buy four gallons or three gallons in a quart, your price per paint has to be averaged out. It works per per gallon. You have to change it so you can hit your margins. And that’s what the estimating system that’s what Xactimate was designed to do is you would go in there and go, oh, well, wait a second. I gotta raise my price of paint to offset it not rounding up to four gallons. So you make those adjustments and you come up with the margins you want. In our system today, in the insurance world, it’s the price is the price. You’re trading some volume for making the system easier. So I’m not against the insurance company saying, hey. The price is the price. When it comes to paint, you’re like, okay. I take it sometimes. I win sometimes. Does it make a lot of sense? No. Not necessarily. But on a volume play, there’s some give and take to to drive efficiency into the system. You trade some downside for more work. So it’s not it’s not a bad thing. It’s not a good thing. It just is what it is. When we look at labor, though, labor, you got the other side. You got direct wage, which is your hourly worker rate. You have all the burdens that are factored in there. So, like, your cost of your labor, all the burdens, your overheads, your cost to operate your phones, uniform, badges, overheads, trade profit. So in trade profit, in the states, you guys don’t get overhead and profit on mitigation. In Canada, we get overhead and profit on mitigation. So, you know, when someone says, oh, OMP doesn’t apply to mitigation, it depends where you are. In Canada, we get it. In the states, you don’t. And when you look at trade profit, it’s built in. So if it’s not on top, you then have to build it into the price. You have to make that trade profit or the overhead profit on there. So if we were to look at how we build our system, if you’re building your your rate, your production rate, you would say, well, if it’s not factored into the price, if I didn’t factor profit into there, then I’m effectively saying I don’t earn it. If it’s factored in there, you can do it a couple ways. So I can look at how do I build my my my rate. So I can build it with my starting rate, my hourly rate, my production time, and all of it’s gonna fluctuate. If you think about it as a moving example, let’s say it takes the time it takes to hang a door. So let’s say it takes in here. Let’s say it takes some time to hang a door. And it actually, I’m gonna go back and then show you the slide. So if I’m in here where I’m looking at the production rate now did you guys hold on. Sorry. Was I sharing my screen when I showed you guys the cans? Kristen or Anna, can you Yes. You were. I was? Okay. Yeah. Alright. So when we get into here and we look at our labor rate, when we look at this triangle, the triangle is is sort of where you start. So you look at if everything’s equal, you have a starting time, a production time, and you got your hourly rate. You look at it as like a triangle that that doesn’t move. I can modify my rate. I can increase my rate, and I can shorten my production time to get the same unit price. I can extend it out. So if we were to look at an extreme example, let’s say that I it it takes time to hang a door. It takes time to paint two hundred dollar two hundred square feet, and I wanna change the toilet. There’s a whole bunch of stuff I do. But the customer says, Chris, you can’t charge me more than twenty five dollars an hour to do this. Okay. So I have a constraint. Maybe it’s a government entity says you can only charge twenty five dollars an hour. And I say to them, well, I charge a hundred dollars, and if I don’t get paid a hundred dollars, I walk away. And I say, okay. Perfect. I get invoice on a hundred dollars and hope that they pay me even though they said they can’t pay anything over twenty five. Or I can tell them, yes. I can charge you twenty five dollars an hour as long as I use unit pricing. And what we do is we can come in and we can modify. This is the basis of all unit pricing. I can modify my production rate to be twenty five dollars an hour if I just extend the time out. And this is why it’s really hard in Xactimate to figure out what your hourly rate is. Because if you’re doing it in a unit price and they screw up the hourly rate, so, like, you’re like, oh, I can’t do it for that many hours. What they can do is they can extend the job time per unit so that you make more because it doesn’t take an hour to do a door. It takes a half hour to do a door. So all of a sudden, if I wanna come up with a two hundred dollar an hour for the task, if I come in and I make the tasks really tight, it’s like, hey. I’m making two hundred dollars in fifteen minutes. Your unit price, it doesn’t matter how you got to two hundred dollars. That’s the price. Whether I showed it as a six hour install or I showed it as a or an eight hour install or I show it as one hour install, it doesn’t matter. It’s how I how do I build the the unit price. So the unit for that door is two hundred dollars. It’s either I’ve accounted for eight hours to do it or one hour to do it at two hundred dollars an hour. If you’re using unit pricing, you’re not fabricating anything. You just said, I assume that it takes us eight hours to do the door door at twenty five dollars an hour. That you said twenty five dollars an hour, I need to get to two hundred. I’m charging eight hours as my unit price is based on twenty five dollars an hour. It takes eight hours. Now when we make those modifications, that’s on an extreme. But when you make those modifications, you’re adjusting the production rate. That’s all you’re doing. And once you understand how you adjust the production rate, then you factor in that into any of your units. When you do smoke damage, if you had light forest fire damage, so light soot in a house, how long does that take to clean versus a heavy soot? Could be, like, double, triple. So if I have light smoke, I would say that’s my base unit is light. It takes me one unit of cleaning for every square foot. If it’s heavy smoke damage, it might take me three times the units, three units for every square foot to clean. I just triple my price. If I’ve got a inexperienced staff doing the work, it might take me four times because they’re not as fast as an efficient team. So I would make that adjustment in my unit price. And what I’m doing is I’m I’m effectively changing my my production rate. So production rate, if you think about it, is your guesstimate of how much time. It’s not right. It’s not wrong. It’s just guesstimating how much time on an extreme basis. This is all you’re doing. You’re figuring out how much time does a task take. So if you in unit pricing, if you understand that, then you can figure out how to build it. When we look at it and it’s like the you know, look at a storybook about Goldilocks and the three bears. What’s too high? Well, too high is you’re out of the market. That’s it’s a ridiculous price. Too low, you’re out of business. You can’t do the work. So just right is always the bare minimum margin you need to survive. So some of you said, hey. We’re not profitable. Too low. You’re already on the wrong side of the pricing path. The other side is too high, and then it’s too high is too much. Like, how high is too much? So then you start looking at your profitability. If ten percent is your target, fifteen percent is not too high. Is twenty percent too high? Twenty five percent too high? What’s too high? You gotta kinda look at what the market will bear. But anything less than ten percent profit is too low. Right? Maybe you can get a little bit below ten percent net profit, but not many companies will survive the ebbs and flows of this industry if you’re making less than ten percent. If you’re less than ten percent and you get stuck in a drought, you’re losing money. When we look at unit pricing, it’s a powerful estimating tool. It’s a horrendous pricing tool. You cannot use it for out of the box pricing because that’s not how it was built. It was built for you to modify everything. So if you were doing spraying an antimicrobial on a solid surface, This is a perfect example. If I’m spraying it on a hard surface that is not porous, what’s my spray rate per gallon? Let’s say it’s a thousand feet or five hundred feet per gallon. If I go to concrete, which is now porous, it’s got grooves and more surface area, and some of it gets absorbed into it. If I’m spraying concrete and it goes down in half or maybe it’s it’s a it’s a quarter reduction in the amount of spray it takes. So I have to I have to add twenty five percent more for concrete. Well, I have to change my my production rate because I’m gonna need more product to spray it on concrete than I do on surface. That’s where you have to understand your yields inside of Xactimate. You have to understand your pricing because you change your surface. Like anyone that sprays it on concrete, you’re gonna have more product going out per square foot than if you were to spray it on steel or on a solid surface or tile. So all of a sudden, you have to increase your product consumption, which then increases your time, so your price per square foot goes up. And if you don’t know that, you’re you’re already working against yourself. But you don’t know what the assumptions are. How did they build the unit price? Was it built on concrete? Doesn’t say. Was it built on stud walls? Doesn’t say. So you don’t know how they built the price, so you have to look into it and figure that part out. And that’s where you can get in trouble without knowing it. The one of the main complaints we get or one of the main things is this tools of the trade or it’s the cost of doing business. And a lot of people say, hey. There’s things that are included in your hourly rate. Now here’s what’s wild is in any other business, tools of the trade that are included as part of your hourly rate would be built into your hourly rate. So if I have my my moisture meters and the infrared camera and I invest in new trucks, if I built my own price, I would include those items into my my policy. Right? I would include them into my my price. So tools of the trade are nothing more than what am I including in there? So what would be tools of the trade for for a carpenter? Table saw, you know, pencils that you lose them every job, tape measure, hammers, nails. If I’m a carpenter that says, hey. I’m coming in just to do carpentry work, and I and you provide the tools, I have a rate of x. If you want me to provide all the tools, my rate is y. So somebody has to come up with a rate of supplying tools versus not supplying tools. Who comes up with that? You do. Why is it when we deal with the software companies that there’s a a understanding that certain things are included and certain things aren’t included? K? There’s no price for your moisture meter. There’s no price in the program for a twenty thousand dollar IR camera. So where is that built into? It’s supposed to be built into the hourly rate. If you don’t build it into the hourly rate, then where does it become? It becomes part of your overhead. But you haven’t built it in as part of your overhead because if I have a a twenty thousand dollar IR camera that my team uses and you don’t, you’re making more per dollar without having that tool. You have to adjust your hourly rates to account for your product, or you have to build that IR camera out separately if all the rates are staying the same. And that’s really one of the big challenges that you have in this industry is when people are putting they’re telling you how you price, you don’t have the ability to change your price based on adding value to your hourly rate. Now it’s not fair or it’s it’s different. The people that play the private game, they can charge twice as much for their equipment because they’re like, hey. I don’t charge for my infrared camera. I built it into my pricing scheme of my rental equipment. So that is included with that. What you have to watch out is when other people dictate what your tools of trade are, you could come up with any price. If you said let’s say, a large TPA says this is how tools of the trade work. They didn’t write Xactimate and say, hey, Xactimate. Is this how tools of the trade work? And then you are supposed to modify your rate. And if you said, well, if you want me to include tools of the trade into my hourly rate, it’s this much per hour. If you want me to break it out and show it individually, it’s this much per hour with this much equipment rental or tool trade rental that I’m billing into there. The one you get is, like, ladders for for roofers. All the ladders included. Okay. We’ll go debris removal. You could build it into the price. It’s just did the people that built the price include it, or there’s just other people making assumptions. And that’s the problem you run into with exact and stability is you don’t necessarily have people that are from our field building the price, and they’re not necessarily thinking about how are all prices built. So you have to be very careful when you’re working with people on that. I always turn this one back. So I I I’m I’m hard on insurance in that respect, but what is an insurance policies tool of the trade? So if you were to look at their policies, and I I use this as an example, is one insurance company might cover all jewelry from zero to ten thousand dollars. And another will say, no. You have no coverage. Or another one will say, yeah. We cover jewelry to a hundred thousand dollars. Well, isn’t that a tool of the trade? Like, isn’t covering jewelry part of your trade of insuring? And it’s kinda the same thing as what we do. If you were to look at different policies, I I I read this one, a hole in one policy. If the and this is from a lie the natural insurance policy. If the policy covers contents at your principal residence, we will pay up to five hundred dollars for expenses for you and a family member you or a family member incur to purchase food or drink at a golf club to celebrate a hole in one achieved by you or a family member during an official round. The scorecard and certification of the club or match secretary must be submitted. No excess applies to or no excess applies to this cover. So is that tools of the trade for an insurance company? Do do they all offer whole in one coverage that if you score one, they give you five hundred bucks? Pretty wild. That’s a cause. Why? That’s a marketing piece. They built a premium off of this customer base likes golf. This will be something we can use to put in there just to sell it, and we know that we’re gonna have a low payout on it. Cool. That’s the Chubb Home policy, I believe, from the UK or from Australia. We look at another one. What’s tools of the trade? Well, they they ensure coverage loss. So in this one, we have coverage for guns up to five thousand dollars. K. Is that a tool of the trade? It’s coverage. It’s insurance coverage. It’s it’s the same as every other coverage. But if I had a different policy, it says, hey. Classic. We only pay five hundred dollars for for an incident on certain covered items. If you have a different coverage, we pay this amount. Well, it doesn’t say five grand. The two policies are insurance policies. They’re both the same. You’re assuring people. Why aren’t you assuring them the same? The the the tools of the trade are built into their price. So a tool of a trade for us is how we bill. It’s how did you build your price. Now when you look at your estimating system, your estimating system sorry, guys. When you when you look at your estimating system, your estimating system comes in and we look at the the policy. I I about that. I didn’t I’m losing my mind here. It was starting to fade out. That hole in one policy was actually a chub policy. And then in here, you’ve got these other policies that are showing up. And so these policies have these limits. This is what I was trying to show you. And so you’ve got these limits here that are are totally two different things. Let’s be very careful when someone tells you that your price is part of the tools of the trade. They’re not. Right? We have these estimating systems that we build. It all starts with a contract. No different than the insurance customer contract. We do a contract with our service that says, these are the rules that we will engage this business from. If you don’t pay us, then this is what’s gonna happen. If you pay us, then this is what’s gonna happen. I’m gonna estimate the job this way, time and materials, value price. If you agree to this, then this is how you’re gonna be billed. No different than when a plumber comes to your house or a carpet cleaner comes to your house. You basically sit down and you you you put a program in place, and you say, this is how we’re gonna do business. Do you wanna do business with us? Then from there, we go in and we do floor plan. We go get our our our map of the house so we can under understand where the loss is and what we need to consider in our estimate. One of the big spots that people miss is they don’t get a good floor plan of the unaffected areas that you have to walk through. So you miss all that revenue from the front door all the way to the source of loss. Like, if it’s in a basement, you lose the stairs going up to the main floor, the main floor hallway, the main floor bathroom that you’re using. All of that needs to have site protection. You’re not necessarily getting paid for that because you forget to sketch it. So what we do is we build really good sketch, and it comes from this. This is an example of �Թϲ�����’s floor plan. It comes from here and then moves into an Xactimate, and then you just do some modifications and and build it in. Then you take that and you create a scope of work. Right? So we go through our contract. We get a floor plan. We then do a scope. What’s the scope? Scope says, this is the detailed work we’re gonna do. In unit pricing, it’s the line items. It says the line item says, this is the type of work we’re doing, and then you modify the line item so that it comes in and says, here’s how long it’s gonna take. If you were to look at the the wall behind you so if I was to cut boards and put them on a on a wall like this, would that take longer than doing one in a in a different facility where you gotta stain them? You gotta mount them to a backer board, and you gotta put them on the wall. Or if it was battened, could you just throw up whole sheets? And here, you gotta cut these, which would take longer. Do the whole wall or cut these custom boards. A lot of the cutting, the custom boards takes longer. And then you gotta stain them all, finish the ends. So what we do is we look at the scope of this, apply wood, and then it’s like, was it harder than normal or easier than normal? What’s normal? Normal would be like an eight foot length or a ten foot length. Is it longer than that or or shorter than that? And then you figure it out based on that. That’s your scope of work. Anytime your scope goes harder, the price should go up. Anytime it’s harder than normal, price should go up. Then what we do is we look at our documentation. And so we factor in our documentation as we schedule a plan. Well, how do we schedule our plan? Well, we document it. We move it into a schedule. We create a budget. And all of a sudden, what we’ve done is we’ve now said, we’ve got the contract. We’ve got a sketch. We’ve got a scope. We’ve documented all the inconsistencies. So the questions that come in, how do you get insurance companies to pay? You justify it by documenting it. Right? We then get it onto a schedule, and then we create a budget. That phase is there. Most people fail to do that. They fail to put it on a schedule. They fail to explain the orders of operation that led to a higher price, and that’s where most people have orders of operation. The way we do the work is out of alignment with how the work’s getting done. And then you come back and you say, well, how do I win? So this is a big part of the setup, and we don’t do a great job as an industry. When we when we work in this business, we don’t do a great job as an industry of getting documentation done. If you’re looking at like, hey. How do I get more money out of a job? I saw on the chat, bunch of you said, hey. You gotta document it and submit it to the insurance company. If you’re playing the insurance game and you’re in a partner program, one hundred percent you need to do this. I still would do this if I was playing just the homeowner game. I would still document everything and send it to the insurance company as a courtesy because I wanna try to get it paid as easy as possible, but it’s documentation that you wanna do. So here’s the type of documentation that you’d be looking at. If you were looking at it and say, hey, Jerry. I’m concerned about the foul odor in the basement in the flooring in the basement not being suitable for my family to live around. What is the plan to deal with it, And is it safe? All of sudden, looking like the homeowner sends the project manager this message. They’re super concerned, and the project manager and the homeowner are on the same page. They can go down and say, hey. Like, let’s see if we can deal with it. If the homeowner and the project manager are on different pages or the project manager isn’t documenting that, at the end of the day, how are you gonna deal with this if if you didn’t document their concern? If they document it and you fail to, you come back and, hey, Jerry. I see the repairs are are starting, and the contractor mentioned that the floors are concerned, and he’s worried about our health. Can you address this issue? That’s the area that I’m gonna go back to them and and start talking to them on. If the project turns out it was a floor was impacted by category one, and all of a sudden you get this nasty odor, well, maybe a preexisting condition we have to discuss. So, like, why is there an odor coming out rather than just say, hey. Don’t worry about it. Alright? How many times do we go to jobs where preexisting condition has led us to now have to think about, like, maybe this isn’t a sanitary floor because of the odor. It smells like cat urine. We had a preexisting problem. We can’t treat it like a category one. It’s gonna have to come up because it got wet. That documentation from the homeowner to the project manager and then from the project manager to the adjuster or back to the homeowner is the difference between you getting paid for a floor that you removed and you not getting paid. So how are you documenting it? Well, doc conversations are number one. When we look at court cases, conversations are number one way. What happened? When did you know it happened? How did you respond? So if if there’s information that you didn’t know until later on and that you could not have known until later on, those are easy cases the defendant restores. Like, yeah, it turned out it was bad situation. There was no indications until here that it happened. However, if you communicated or failed to communicate or you only communicate with the insurance company and the homeowner was asking questions and you never communicate, it will fall back on you if you’re not documenting loss and saying, hey. Let’s have those open and transparent conversations. So when we start to look at our invoice and estimating, does an order appearing increase or decrease our scope of work? Does it make it harder or easier? If our scope gets harder because of that preexisting condition, then I need to address it with the parties involved is explained because of this order, we suspect there’s a contaminant. Because of the contaminant, we suspect it’s gonna be more time. If it’s more time, it’s usually more cost. Right? So that’s why I look at anything different than normal, we wanna communicate. If it’s more difficult, it’s it’s a higher price. And so every time you do that communication, it’s like, I’m communicating when things are more difficult. So you do your general documentation, and then you go in and you ramp it up when there’s a problem. So what would be your normal documentation to, like, get paid? I like that comment, by way. I just thought that somebody’s saying depending on what we find into the job. Absolutely, Jared. In my initial walk through, I’m gonna do the walk through. And after the site safety is done, this is what how I found the location. So to that statement, based on my initial observations, this is what I believe the scope is subject to change. And then they do three sixty photos left to right. So I would come into the doorway, and with my my phone, I’m gonna go like this around. I’m gonna take a step back, and I’m gonna finish the room three hundred and sixty degrees just to capture the overviews. Right? That’s my initial inspection. The next thing are notes and observations. Who, what, where, when, why. Then I would add a video. If I can add video at no cost, add video. Video is great. You know, like, hey. It smells like a wet sock in here. It smells like a dog in here. It’s category one, but it smells like a wet sock. Probably category two or a category three. Justifies pulling stuff out. If I saw that in a video and you said, yeah. Smells like a wet dog in here. The homeowner’s like, yeah. Like like the worst wet dog you’ve ever smelled. You’re pulling out the floors. So all of a sudden, your documentation justifies your scope, and you can then justify that increased cleaning, that increased budget, and that increased equipment rental. Then you’ve got your cause of loss and schedule loss. So or source of loss. So I’m gonna document the cause loss for the insurance adjuster. If they’re not on-site like a lot of them are, document it. Take nice big picture away. Zoom in. Zoom in. And what I wanna do is make sure I identify what happened. Hey. The pipe broke. It was a ruptured pipe. The dog ate through the the wall water supply line. The carpenter punched a nail into the supply line. A joint came undone, sudden accidentally. Cool. Document it. And then I wanna document all the preexisting damage. Why? We get blamed for people after the fact. They’re super happy you’re there, but then they don’t notice all the nicks, dings, dents, and scratches from the work you did. So three sixty photos. If I see dents and scratches like on here, if I have dents and marks and scratches, I’m gonna document. Take picture away, zoom up, picture. Picture away, zoom in. Why? Every time you take a picture, I’m doing two things. I’m telling the customer I know it’s there, and two, I’m gonna have proof it’s there for when we’re done. The other thing is is if you get a a low end insurance company that only pays for one wall, The other three walls look like trash. Right? When you compare twenty year old paint to, like, brand new paint, it’s gonna look like you did a bunch of damage to it when they notice all the nicks and scratches on there. They’re all normal wear and tear. Just document it. You do that left to right and then video for those odors or the non visible. Sometimes there’s things like you’re trying to show video of like, hey. This is distorted. Describe it. If it doesn’t show up in the video, it’s better than nothing. The other areas I would wanna do is site protection. So if I’m doing site protection in the unaffected area and I charge for it and I have to fold it up every day, show your pre and post photos from it. Protect everything from cross contamination. Your justification is is a sanitary reason, and then you’re putting it in. If you’re building a negative pressure, show your negative pressure readings. Like an adjuster is gonna say, why do you need negative pressure? Oh, it’s contaminated environment. Well, then show them the manometer readings. Like, it’s okay to present our data to them. Show them the data. I had it under negative pressure. Help the the adjuster justify their payment for these products. You’re putting a service in. You’re saying, hey. I need negative air. It needs to be under negative pressure, and this is the goal I had at five point five kilopascals or five kilopascals. This is the the the the pressure I need at. I maintained it, took a picture, and I showed it. Well, the unaffected areas, I’m gonna go through and inspect this. Now this doesn’t sound like a big deal for estimating, but it’s massive. This is how we’re gonna document things. And if we come in after we do our initial inspection area of the affected areas, I’m gonna make sure I get that cause loss, schedule loss, preexisting conditions in my site containment. The next thing I do is resulting damage. Why? That’s where the money’s at. All the resulting damage is where we’re starting to document this. It’s like, this is the things that need to get torn out. And now I’m another big fan of grabbing a black marker and axing if you’re pulling a wall out, ax it when it’s wet. Because the number one dispute that happens after is it looks dry, and a consultant will come back and say, oh, I think it’s dry. No. The scope was initially set as it’s a category three. It’s coming out. You x it with a marker. That was the discussion at the time. It’s now permanently marked, and it’s it’s ready to come out. I love when I see that because it doesn’t allow for Monday morning quarterbacking when it’s dry to say, I think that’s clean wall. If it was wet, you you mark it. You mark the structure. You do the contents. Contents is a big one. That will impact your estimate. If I’ve got a room full of contents, I’m gonna have to justify it. Then we’ve got our equipment, and we have to make sure our placement is good. And you wanna come in and go, what’s our equipment placement and what’s our justification? Do we need more equipment or less equipment? Do we meet the standards requirement for equipment or do we not? Justification in the standard is really tight for putting your equipment in and then making your adjustments. That makes sense? So far, if you follow that, if I were to review your estimate, your estimate should look like your documentation. Right? If we were looking back, I should have an estimate that looks like your contract. Your estimate should look like your documentation, and your documentation should basically justify what we’re doing inside the job. If you’re doing that, you’re more than eighty percent of of the way through, and you’re doing more than most contractors. When we look at the report, what you’re trying to do is come up and show the damages, the condition of the building, and the and explain the story to the adjuster so that the estimate makes sense. You have to imagine your estimate or your Xactimate or your time materials, whatever you’re doing, has to look good. It has to come into play so that the insurance company looks at the paperwork and goes, yeah. That’s what thirty five thousand dollars looks like. Because if you have, like, three sheets of paper and no sub substantiation behind it, how do I pay you the price of a car when you have no paperwork to to support it? And you’re like, well, they know it’s a wire damage. They know that’s what it should be. The vice president doesn’t know. The claims manager doesn’t know. They haven’t looked at your file. Give them the justification in in your paperwork. It’s called front loading your claim. If you front load the front loading pack. Basically, answer all those questions before you get the job to a dispute position. Front load it with all those questions, answer all those questions in advance, and you’ll have a much easier time in the end not having to fight an adjuster. So when we talk about being profitable, why do you wanna be a profitable restorer? Like, there there’s a mentality out there that restorers should, you know, be happy to be doing work and saving their community, and that’s what we do. But why do you need to be profitable? If you really believe in your mission that you wanna help more people recover after a loss, you wanna help more people in your community, you have to be profitable because you’re you’re a for profit business. You run on profits. You grow on profits. You have to be profitable, and there’s nothing wrong with it. Just understand you can do the right thing and be profitable. The insurance company doesn’t necessarily want you to not be profitable, but it hurts their bottom line every time you take a dollar from them. It hurts their bottom line. So you have to do it ethically and do the right thing. And what’s wild is and maybe I was naive, is that I was taught that if you were technically trained, you have all the technical experience. The more technical you get, the better you are. The problem is is the more technical you get, the more you fall in that Dunning Kruger effect. Right? You so you get in that curve, and then all of a sudden down here, you get scared. Well, to get profitable, you have to get through the technicals, but you also have to realize that your business comes first. Your profitability comes first before the homeowner. You you could turn the job away. If it’s not profitable, don’t help. It’s a hard thing to say. Private equity totally changes the game when it’s that way. It’s like, it’s not profitable work. We don’t need to help them. Let someone else help. So you have to change your mindset on why are you in this business. Are you gonna be profitable? And so when we start to look at how profitable are you, it’s okay to be profitable. You just have to understand the industry. So in the last five years, I’ve had this really interesting high level conversations and and looked at it from a much higher view. Right? So you got lawyers, adjusters, claims managers, property managers, and everyone assumes you have these credentials that you can go and do this business. And what’s interesting is that whether you’re on your second course or your twentieth course, no one really cares whether you’re credentialed up to the to the top or not, but you should. Because you really need to be able to go into a job technically savvy and be able to make that technical argument. And if you look at plumbers and HVAC companies, they spend a lot of time in that training. Right? They spend a lot of time focusing on how do you get someone trained, how do you get someone good. And even then, there’s, like, really good plumbers and really bad plumbers because they run their business poorly. But when we started to look at it, restores have a distorted reality. Plumbers come to your house and like, if you can’t afford it, we can’t help you. But as a restorer, we go to people’s homes and we’re like, man, we really like to help you. I just need to know who’s paying, and then we’ll figure out how we help them. Like, there’s nothing wrong with renting equipment to somebody who can’t afford the insurance thing and just say, hey. I got equipment on my shelf. It’s not making me any money. I’ll give you it for fifteen hundred dollars. You pay me fifteen hundred dollars. I’ll give you a wet check. You do your own when the stop’s beeping, that’s when you’re dry, and then we’ll come back and we’ll check your building for you before we pour equipment out. Cool. Make less money, provide less service, fits the market. There’s nothing wrong with that, but you have to understand this business is is tough, and they assume everybody’s doing the same thing. Your price the reason why prices are, like, in in are all the same is they assume everyone’s offering the same service, and so you have to break through that mold. When we look at it, I got to be a professor at Humber and instruct a bunch of restoration professionals. So Anna, who’s on the call, she’s she’s my instructor there as well. And what’s interesting here is that we had students that were getting the top training from at least in Canada, that’s one of the the higher programs that are there. And it’s amazing is that even as a professor there, no one cares. Right? Like, if you come back and you’re like, oh, why? I taught at Humber. In the real world, no one cares. It doesn’t matter. Your credentials don’t matter. It’s how you explain it. They don’t care what your your background is. Your credentials don’t matter. It doesn’t matter if you’re a professor and you taught this thing. You still have to come in and logically explain it. So don’t be like, oh, I’m a master restorer, so therefore, you should listen. You still have to do your justification of saying, here’s why it is. So it’s kind of like humble education. When you write an estimate in unit pricing and there’s something that you need to change or disagree with, you’re educating. I had to put this extra line item in because this happened. Here’s where the standard says this is happening. This is how I approach the job, and here’s why I add more time. Normally, you wanna have that conversation before you submit your numbers, and then just say, hey. As per our conversation, this is what happened. But in the case that you don’t have that conversation because you can’t get ahold of someone, justify it with the standards. And you should know the standards, the IICRC, and everything that goes with it. Most of the estimates that get kicked back in review have no justification. So there’s some adjusters on this call that would probably say, yeah. Like, if you see things that are getting kicked back, it’s, like, super thin, no support. You didn’t help them do their job. They don’t trust your number because you got bad line items all over the place. You’re just trying to get to the number, but it has to be that you’re you’re putting in the numbers in the right spots. Now the I I c r c is interesting. I had a file reviewed by a fellow instructor, and we were in a head to head battle of opinions on this. And what was interesting is that the file I’m not gonna get into the details of the file, but the file was where how would you put it? There was things that were being said that restorers were expected to do that was was wrong and incorrect. And I I watched this happen, and I was on the other side. And I went, there’s no way that this person is making these claims that they’re saying the restorer should do all this stuff is wrong. And what was interesting is they made a statement that every restorer is taught to restore the property as fast as possible. And I remember, like, having a flashback to, like, two thousand five or six, and I remember the instructor saying, yeah. You number one priority in restoration is get there as fast as possible. What they were saying in there is, technically, that’s the right thing to do. The IICRC teaches technicals. But from a business standpoint and from an estimating standpoint and from a logistical standpoint, it’s not to be there fast and first. It’s there to get the job signed up and file the contract and get the paperwork done. And it was interesting. I was in this court case two years ago, and we won against another instructor. And it led me to believe this question that I’ve been asking myself for so long is what if everything that we were taught in restoration was wrong? And I kept coming back to this. It’s like, what if we were taught everything wrong? And the reason why I asked that is we’re effectively looking at our business from a perspective of technically what’s right, and we have to match it to what’s right for the insurance company, and then we have to match it to what’s right for our business. And the conflict that kept running into is what if everything we were taught was wrong because you’re you’re you’re taught in silos. You’re taught in a silo of, technically, this is correct, but business wise, it’s not. Technically, this is what the insurance companies want, program rules, but that’s not technically good for our business either. And all of a sudden, what if everything that we were taught was wrong? Like, the buttonology is wrong. And you’re like, man, that’s totally a mind shift for me. What was interesting is that the more I explored it, the more it made sense. We don’t drive buildings or restore fires from an academic theory anymore. We do this to to restore buildings because financially, it makes more sense for them to pay us to do the work than it is for us to just replace stuff. So we can clean it or save it. There’s a financial benefit for us getting paid versus someone else getting paid. And that’s when I started to look at things a lot different. I I started to put this in the perspective that the way we estimate, the way we price, the way we build out our our our revenue models, all of it is just a balance against what’s the other option. And so when you start to look at unit pricing, unit pricing is just commoditization. You have to come up with value offer. Like, what’s your value offer? And every decision and every investment in your business is about increasing profitability. So if you’re gonna invest in equipment, it has to have an ROI. You can’t just buy a fancy truck to have a fancy truck. If you want to invest in in new restoration gear, are you gonna actually use it? You know how to use it properly. Can can you take that gear and maximize your profit potential? And this is where he comes back to understanding your price. The price of equipment rental in the industry hasn’t gone up in a ton of years, although our prices have just spiked. I’m looking at at some dehumidifiers a couple weeks ago when I was in a Ramsco and John Don’s offices. Expensive. Totally spiked on price. Our rental rates have stayed about the same. So what’s offsetting those those rental prices? Right? All of a sudden, do we have a longer return on investment? Someone else controls our price because the the cost of purchasing new equipment has gone so much up. It’s making the heart the game harder to play. So if I’m going to invest in equipment in my business, I have to get a return on investment. I have to know what my costs are in order to come up with that return. When we start to look at it, we we can look at the other side of it and say, well, we move quickly to get the business needs met before we can restore the property property. So if we go in and if you change your your your mentality you know when I showed you that we had a really profitable year? All we did is we said we put the business first. We didn’t put the SLAs first. We didn’t put anything else first. We put the business first. We made better business decisions for our business, and we’re like, we’re gonna only restore jobs that we can make money at. Or if we are restoring jobs where we’re losing money, the overall payday for that account has to be worth it. So we yeah. We do a few jobs where we lose some money, but overall, we have to make money. That’s why we fired one flight because overall, we didn’t make money. So we were like, well, you’re done. You’re not good for us. You need to be here as a profitable restorer. You need to be looking at how do you generate more profits in a faster time frame. Alright. Excuse me here. Any let’s jump into one more example here. I’m gonna pop this up. If we were to look at car assembly, I wanna I wanna tie this all together, all all these ends together. I want you to understand if we were looking at car assembly and we said we’re gonna do great material, so that would be your your basis for doing anything. Now the reason I use car assembly is we can imagine a car coming down assembly line and says, hey. It takes a hundred hours to build. Five thousand dollars in material, five thousand dollars in labor. We combine it together. We know what our costs are. You look at your production line, and you’re like, hey. Can we drive efficiencies in there? If you took that production line, said, oh, no. We figured it all out. It always takes five thousand dollars in labor, five thousand dollars in that in materials to get there. It’s a hundred hours to build it. That would be your rate and material experience. What could you do from there? Well, you could break it down. You could say, you know what? There’s three hundred and ninety five individual processes that makes up one hundred hours, that makes up five thousand dollars of labor, five thousand dollars of material. If you’re a car guru or an engineer and you already knew that, you have enough experience, you could just say, hey. You know what? It’s just ten grand. That’s your bid. You have enough knowledge. You’re like, yeah. It’s ten grand. Because, obviously, it’s a hundred dollar a hundred hours, and it’s five grand material, five five grand of material. All of those should be the same price. Right? If you were to do the same model and follow it through. The problem with our industry is nobody looks at all three estimating systems as the same, but they should be. Like, literally, you can’t you should have a different price. So if I have a rate material, it means for me to get rate material different than unit pricing, one of them is wrong. Usually, it’s the unit price. Unit price is a bunch of false assumptions. Rate material is based on actual experience. The bid price is based on you knowing and remembering that experience and be able to put it into a bid. If we were to take that same example and said, hey. Our rate material price on a car is ten grand, And then we have unit pricing, and and we got different car companies. They’re like, oh, it’s fourteen grand. It’s four grand. It’s ten grand. Seven grand. You’re like, sorry. What? And then on bid pricing, you get somebody at twenty one grand, someone at five grand, eleven grand. You’re like, how did you come up with all these prices? That’s insane. What happens if we turn it into restoration and you ask the adjuster the same question? They’re like, hey. On rate materials, it’s a hundred grand. How come when they look at it, all of a sudden they see two hundred fifty thousand dollars, sixty five thousand, a hundred? Which one’s the right number? If you don’t have this basis of how much you think it should be, how can you factor in which is the right price on the company? So when I look at insurance companies, look at them with sympathy because I’m like, hey. I’m getting a ton of numbers that aren’t the same. In a unit price, my rate material and my unit price should be the same. If I’m bidding, I put the fudge factor in. It might be a little bit more because I’m factoring it in. Technically, it should all be the same. The only reason that this is a hundred thousand is because that’s the experience we actually have from doing the job. If I’m bidding it or I’m coming up with units, I have to make assumptions and factor in. So my price could be a little bit higher. It shouldn’t be lower than the time and material cost. Right? Because that’s real experience. It should always be higher. How much higher depends on how much risk you want me to assign. So is two ten too much risk on a bid? Not necessarily. It depends how much risk I have. Depends on the the protocols. If we were to change these numbers and we were saying, hey, in our in our estimating strategy, we tightened it up. Instead of getting this wide range of pricing, we now have a narrower band of pricing because we have a better scope. I could easily see that, hey. The cost on here is ten grand. I could pay ten, eleven, or ten five. At nine, I probably don’t get the product I need on a on a on a volumes play. On bid pricing, maybe you could do it for ninety five, but ten and eleven are the right price. If we come into restoring homes, a hundred is the right time and material price if you know what the price is. One twenty could be the right price because you factored in the fudge factor. Ninety is too low. It’s just you’re gonna lose money on it every time. One twenty five might be too high. Hundred and five might be right if you do quality control and you have a really good estimate in place. If you’re doing a bid, it’s not unusual to see your bids come in at about one twenty, one twenty five, one thirty. In here, I would expect that I’m gonna lose some revenue. I’m gonna lose stuff right here. But I’m okay losing because it means that if I win the job, I I get a higher margin. And that’s why you want your bids to be a lot less. Does that make sense? When you when you get into pricing and you get into the pricing strategies, you have to think about what is the customer seeing, what is the actual value of the product you’re providing. For you to get more value here, maybe I have to do payment terms, or I need to give a better warranty, or I need to communicate better with the adjuster or something to incur me getting paid a higher amount compared to my competitor. Estimating is really tough, guys. It’s I know you guys came here for some some of you came for buttonology. We’ve got a course for that where we go cradle to grave on it. But in here, I wanna give you the mechanics, the foundation of it. Because once you understand this, the the buttonology actually gets easier to figure out. We do have, a decent number of questions. Now you talked about you kind of mentioned a little bit about insurance companies who have different, I don’t know, different guidelines on pricing and things along those lines. This question came in from Daniel, who I know is on today. He says each insurance company has a different set of guidelines. How can we be more consistent? We’re arguing with adjusters about line items because Xactimate lacks on proper line items. One adjuster wants it this way while another adjuster wants it that way. So he’s just kind of asking how we can deal with, you know, the lack of consistency, you know, across the carriers. Yeah. So what I realized is it’s hard. So the answer is it depends. Right? Do you make the concession for someone so first thing you have to say is one adjuster’s giving you work. You just take a step back just and look at the business. How much business do they give you, and is it worth customizing your entire business to that one adjuster or that one group? If they if the the answer is yes, then you go on to the next decision as, yes, it’s worth it. Do you have to change your process so much that it makes it unbearable for you, or is it an inconvenience, but it’s like, hey. You know what? I like the work I get from this person. I had an adjuster that just would beat me up on stuff all the time. Like, he just hated seeing the the the petty stuff. And I’m like, what if I change the price on the line? I’m just like, yeah. That’s fine. So it meant I just had to learn how to work with them because they just didn’t wanna charge they he didn’t wanna personally see things the the way it was. Now that’s when we could change more prices in there. So we would just eliminate, like, all the masking and all the fluff on there and just raise the price of paint. So it was like painting walls, and it was one price. He liked it that way because it was a little bit more the old school way. You’re gonna find that the push from programs, I think there’s a pendulum that’s swinging right now. And I think the pendulum has hit about as hard as you can get on the on the reviewer side. What you’re seeing is insurance companies are starting to hire more field adjusters. So this trend of putting people back in the field, think, about we’re in about a seven year swing. And, back when I started my career, I was told about the seven year pivots. Now it’s a little longer than seven years, but every seven years, the insurance companies go from one model and switch back. So it used to be the independent adjusters would be you know, they farm everything to independent adjusters, then they seven years, they bring it all back in house. And then seven years, it goes back to independent adjusting. I think you’re gonna see that where there’s more adjusters going into the field because that’s where the insurance companies make and lose their money. And and my my belief is that all this process that they tried to enforce, it doesn’t work like auto, and they’re starting to realize it. So now what you’re gonna have is you’re gonna still have that customization on estimating because you can’t standardize residential estimating as much as you say you want to. Every house is different. Every house is unique, so you can’t standardize it. But what they should be doing is validating if the scope is right. Is the scope right? And then is the degree of difficulty right, and is the price right? And I think you’re gonna see more people back in the field, and that’s probably a change. Like, that’s where more insurance companies seem to be going is they’re reinvesting in human, human capacity. And I guess with my guess is they’re supplemented with AI so that it makes it easier to do the job, but they’re gonna need more people to make those decisions because this isn’t something like auto. What’s the steps to do that? I still think it comes down to communicate your process, your technical reasons for doing it, and justify it. I found very few adjusters push back when you provide them with all the support they need. So that’s a long answer to the short question, but but I think you’re in a I think we’re in a good spot where things are gonna start to get easier as opposed to harder. I think this is the most hardest they can get. Awesome. Thanks, Chris. This is a good question from Adrian that came in pretty early in the webinar. And I saw a lot of comments in the chat, just kind of bemoaning this issue. But, he asks, how can we effectively and professionally communicate to an insurance adjuster that they do not have the authority to determine the water damage category, especially when they didn’t inspect the loss site or evaluate the conditions in person as required by the s five hundred standards? Yeah. You’re you’re gonna get into this. So it’s who’s holding liability for it? And and I’ve won recently, won a few cases where we had the insurance company dictate how the job should be, and then the restorer didn’t follow those instructions. The insurance company and them got into a legal dispute, and the restorer won because the standard is very clear. So if you make a determination on what the category of water is, If they dispute it, they need to then scientifically challenge you. They can’t have an opinion. There’s no way that they can have an opinion that based on the source alone, that that is the resulting category. You justify it. So there’s the five characteristics. Is there what where what was the source? What was the time? What was the temperature? Is there any contaminants? Is there an odor? If you have time and temperature in an odor, then you can justify a two or three. There’s no real difference between a category two and three. So once you move past that threshold, they would have to test it back. And if they didn’t test, then it’s up to them. What what I come down to is you can you can have that dispute if you want, or you could provide the information to say, hey. You know, they came from a clean water source. They hit contaminants. I I’ve had a house. The one the worst one I ever had, but it was, like, the best example, was I had a category three basement where there was matter. Like, the the the homeowner let the dogs use the basement as a toilet. Water hit the basement, and, basically, the entire basement was just cat three. The main floor, you could have argued that the dogs walk upstairs so that the main floor would be cat three two, but the main floor was treated as category one. They they cleaned the surface of the floor, and then they they extracted and dried it. Okay? So which one is it? Three or one? And in that case, I would agree. The top was one and the bottom was three. You can make that justification all day long. So the source doesn’t matter. It’s how you document it. That’s what it comes back to. The insurance company then making a pivot from that, they need to provide justification for it. Now depending on what relationship you have with the insurance company, you might have to get a consultant in to argue it. If it’s worth enough dollars, you bring a consultant in before you get to the point where you’re arguing and you get an opinion. But it’s it’s tough when you got people that are not educated making decisions on something that they don’t know anything about, and you always come across that. Then you have to make a decision if they’re right for your business or not. We hear you. Thanks, Chris. So let’s move on to Tammy’s question here. Says, is there a good formula for GP when looking at the costs, labor, and materials? I look at all that before I submit the estimate, but we end up having to pull subs in for demo due to getting busy. The subs are just sending us a bill after the fact based after the fact based on hours. Do you have any tips on how working do you have any tips on working with subs and planning? Yeah. So I like if you’re running a a the demo is interesting because you can set a budget. And so I I use the components in exact. I wish I could show it to you, but I use the component section of exact where when you get your estimate together, it tells you how many hours it estimates the demo should be. So, you know, if you’re using the water damage line items or the DMO line items, what you do there is you come up with a budget. And I I it’s a complex way, but effectively, what you’re doing is finding out how many hours does the program allow you for. And then you go back to the subtree and say, hey. On this job, I’ve got two hundred hours or a hundred hours in demo, and I’m paying it at fifty dollars an hour or thirty dollars an hour, you know what your your job’s paying. And and instead of getting them where they just, you know, hey. I’ll just throw my extra workers on there whether they’re good or not. You know, like, that’s a three thousand dollar job. Like, you’re the one that’s setting the price, take control of it, and be like, hey. This is three grand. You want it? Take it or leave it for three grand. If you run an inefficient job, you make less money. If you run efficiently and your guys are fast, you make more money. Put your a listers on it. It’s a it’s it’s a price a bid price job, but you’re telling them the number because you know what you can charge the insurance company for. So don’t give your trades the opportunity to to put their inefficiency into your job at your margin and your expense. We get into that, like, in in when when we in the course I’ve built, we get into that in a big way because managing sub trades is a big part of making money and not having in house staff is or or or taking the pressure off in house staff is a huge part of the business for sure. Excuse Alright. I’m kinda just gonna maybe do these in order then, going forward, because we keep we keep getting a few. This is a question from Jake. He says, how do we deal with someone like, State Farm who just shuts their eyes and says, nope. We won’t pay for it. Charging the customer is the only course of action since they refused to negotiate. And then he’s he kinda gives a quote relevant to the question, but I think that the question is just dealing with an obstinate carriers who Is this Jake from State Farm? Just kidding. Snake Farm. State Farm today in the comments. It it it’s it’s a yeah. This is Jake, and I’m asking about State Farm. No. State any type of carrier, and it’s a fight because it could be regional too. Right? So you could have, you could have an adjuster in one state that is completely a different experience than another state with the same company, just two different adjusters, two different regional offices, and how they’re running. Also, inside those those insurance companies, you got different types of policies that they write. So there’s different tiers of policies. So there’s like, we look at insurance companies and go, oh, well, State Farm is State Farm. Well, State Farm premium line is different than a State Farm Econo line. So you gotta know what kind of policy you’re dealing with or what type of insured you have. It’s it’s tough if you’re on programs. Like, if they’re like, this is our price, this is our price, and you’re in a program. If you’re not in a program, then you’re playing free market. You’re dealing with the homeowner, you’re not dealing with the insurance company. So I always I’m I’m light on the carriers. If you signed a preferred program, you accepted the terms and conditions and the rules that go with it. If it’s it’s free market, you’re not obligated to it, but you might want to, you know, work with them to make it easy, and maybe you’re gonna give up a few thousand dollars in your in your estimate to make it smooth to get paid. But if it’s if it’s a hard line, the homeowner is ultimately responsible for your services. It’s it’s it’s more of a negotiating thing of, like, what are you willing to trade for it? So I’d be willing to get price concessions for faster payment. If you want me to knock my bill down, then I want the check fast. So, like, let’s not nickel and dime. I’m not gonna rewrite it. If I give you a bill for five and you wanna pay me forty two, then throw the check-in the mail tomorrow and I’ll agree to your your deal, then, like, I’m not doing any paperwork to justify it. Just cut my bill, give me a check, and and we’ll call it a day. I trade that. I trade fast payment for not having to deal with the bureaucracy. That’s a good deal. Because if you look at it, if I’m playing free market and someone else signed a a vendor agreement, and so I I was looking as what’s my discount for getting vendor agreement work where I didn’t have to do the agreement. Yeah. I gave a discount away, but if they if I force them to pay me quick and I got the same as another contractor would get for similar work, I could fight tooth and nail for my five grand. But if you just don’t write me the check really quick, you know what? I’ll I’ll I’ll take that lower margin job and and get it off my books and get to the next one. That’s how I would approach it. But if it’s if it’s to the point where it’s below your cost of doing business or your it doesn’t hit your your bottom line profit margin, then you you gotta make those decisions before. If you’re dealing with a company, of who it is and you don’t like the way that they do business, turn the job down before you you get it. Right? Like, I don’t do work with we we turned one insurance company down. If I found out it was the insurance company that I didn’t wanna deal with, I won’t name the name, but if I was dealing with them and I didn’t want it, we would turn the job down and I would just walk off the job. I wouldn’t wanna deal with them because I never got paid from them. So I was like, screw it. We’re in there for a day. I’ll take my loss, and I just don’t even wanna deal with it. We’ll just, like, we’ll pull off the job, give it to someone else, and we’re up. And then we would give the insured the bill for the time we were there. Call whoever they want. I don’t care. I don’t want their work. And so that you have to make that decision. It’s hard if you need the revenue. It’s easier if you have more revenue coming in than you know what to do with. So Okay. Yeah. Tough break. We do a lot of comments, questions, just kind of along the You guys are awesome. It’s just it’s just rant central in there. Okay. So Masud has been patiently waiting for this question. I started to kind of answer it myself. And, Masud, if you’re still on, maybe you can hop on and clarify. He was asking about the best estimation systems for content processing, household goods, post mold remediation, etcetera. Seems like he was looking at �Թϲ�����. From an �Թϲ�����’s perspective, Masud, if you’re looking at, like, contents pack out an inventory, that’s something that we bake into our product for no extra cost. But if you’re looking for something more on the estimating side, I mean, let Chris take that. Yes. Contents is interesting. There there are, like, ten different ways you can play that game. Right? You can go rate material. So you you you you buy your box for a dollar fifty. You sell it for three dollars. You make fifty, like, fifty percent every time. That’s the way contents is really good at. If you get efficient in your pack out that’s a long question. Long answer. Rate material works really good for certain things. Like packing out would be rate material. If you were gonna go box pricing for cleaning, then you drive the inefficiency into that rate material so that you can drive efficiency into your box cleaning. And then you’d be like, hey. If I get the time to pack the box right, then I can give you sixty five dollars or eighty dollars a box to clean it and run it through the ultrasonics because I I I know I can drive efficiency, and I can get a unit price to work. As a general rule, you just go rate material and because contents is degrees of of cleaning required. If you were to look at Xactimate, Xactimate’s pricing is kind of just pulled from the air. Like, there’s no science behind it. There’s no methodology behind it. It’s just this is what maybe retail’s worth. This maybe what cleaning’s worth. Rate material is probably your best bet on contents. I’ve seen people try a bunch of different methods. You can make it work in boxes if you have a really, really honed system. You have to really work at it to make it work in boxes, but great material, every day of the week. Thanks, Chris. There’s a question from Billy. He says, are we required to furnish time sheets for tech hours or tech hours back? Great question. So it’s kinda weird. When we use unit pricing, if you’re an exact, some of it is rate and material. Now as a general rule, when you do rate and material jobs, you need supporting evidence. So in that program where we have rate and material pricing, what we’re basically doing is we’re saying, hey. We’re saying it took more time. We’re gonna support cards for you. Where you normally get those, like, equipment inspection, picking up material, or picking up supplies, things that aren’t included in the line item. That you should have time cards for. And so you have to know exactly where is what’s included in your unit price bid is effectively what it is. It says, I’ll do it for this price. Everything outside of that is rate material, and you should have time cards for. And so that’s where these hybrid systems fall apart is, like, when do I need a time card? When do I not? Now we used to make our guys go through and do time cards on everything. And then someone says, wanna see all the time cards. And then it’s like, well, hold on. You charged me for this and unit pricing, but you didn’t pay that much. It didn’t take that much time. It’s like, well, yeah. But that unit price, if if it was slower, I lose. If it’s faster, I win. You just get a single price for the item. But for the unit price on time cards, anytime that you’re doing things that aren’t inside of, like, a per square foot price, you should have a time card or an equipment card or consumable card for. So equipment rental is by the unit. You need a unit tracking card. Anything that’s by the hour, you should have time cards to support it. One hundred percent. Great. So thanks, Chris. Some of these some of these questions, some of the the, people who asked have dropped off. So I’m gonna kinda skip down a little bit here, and jump to this question from, Gore. He says, during cat do cat two water damage, can we use, a heap of vacuum? Yeah. I I there there’s wordings in the standards that would support a a preclean on all cat one, two, three. So you could have a clean. So the the HEPA is where are we where are we removing? We’re removing solid contaminants. So you could do a HEPA clean on a category two or three. If they’re still wet, then you’re probably gonna do a wet carpet extraction. Right? So we’re gonna extract the water off a carpet, roll the carpet, get it out, get the pad out. You want all that water removed, so we’re gonna extract it. Then you got the floor. And let’s say the floor is damp, but, you know, not you do you do a HEPA vac on there? Yeah. You could do a HEPA vac and get all the the carpet fibers and stuff off the ground because then when you turn the air movers on, you don’t wanna aerosolize that. So you a hundred percent could justify a HAPA clean on a category one, two, or three. On a category one, you might be doing, a wet carpet clean if it’s carpet, but on a ceramic, you you you extract your water, and then you could do a vacuum to get all the the solids off the ground. All that’s supported in the standard. So yeah. And it’s not uncommon to see HEPA cleaning as a preclean. Okay. Let’s see. Which one from Kevin says, how can you justify Matterport in an estimate? Well, that’s where it comes in is what are you providing? You’re providing a three sixty added service. And this is where exact this is where the problem is with with unit pricing by somebody else. Imagine you had just an Excel spreadsheet. Right? Like like, that’s how we build time and material budgets up. We have an Excel spreadsheet. We put all our time material in, and you’re like, I’m gonna charge for a broom. And in Exact, you’re like, well, there’s no brooms in Exact, so you can’t charge it for me. Well, when we do commercial jobs, we might charge you for a broom. I charge you for a hazard sign in a hallway. I charge for everything in a rate material commercial job. Xactimate or Symbility or any other company says, well, I’m not gonna put everything in anything under the sun there. I’m gonna still put the more common items in, and then you’re supposed to create your own price list and add your own items. So when you start to look at this, it’s not that there’s not a charge for it. Like, if I’m doing a commercial job, I would put Matterport three d six three sixty documentation in. And if I did two or three scans during the job, I would I would show that, and I would bill for it. It cost me money. It’s part of my overhead is the argument. So the only argument is, like, well, that’s the cost of doing business. Cool. Do you want me to add it to my hourly rate, or do you want me to charge it out individually? The reason why it’s charged out individually or the reason you should add it as an additional charge, if you’re not applying it to every job, then it’s a charge that happens as, like, a one off. So then the the the the thesis behind it is we don’t build it into every hourly rate because if we built it into our hourly rates, it would mean we would be charging for it even if we didn’t use it. That’s why it’s charged as a unit price. But if it’s part of your everyday operation, you could build it into your hourly rate. And then as part of your cost of doing business, it’s built in as an hourly rate. You could justify it by adding it in. Sometimes what you’re doing is just adding an extra half hour or forty five minutes on an hour charge, and it’s like someone’s time card gets rounded up, and that’s how it’s added in if the adjuster doesn’t wanna see it. But they’re like, yeah. I’m cool if you charge it. Just don’t show it. That’s sometimes how it’s done. I don’t like that, but that’s just the industry. Right? Like, everyone talks about fraud, but yet they’re like, hey. Don’t don’t show me this charge. Charge it to me something else. It’s like, well, you’ve indicated you want me to do something different than what I’m actually doing. So, like, what’s fraud, what’s not fraud? It’s soft manipulating of program rules to make everyone happy so that we have to lie to make it happy. It doesn’t make sense. It’s just the where the industry’s at right now. I think that’s gonna change. Like, I can’t imagine this industry getting more efficient with more fake rules and fudge numbers than what we have right now. Like, it’s it’s ridiculous. But how do you show it? You can either transparently show that you’re charging more for it, or you can build it in as additional hours. Yeah. Okay. Let’s see if this person posted anonymously, so I can’t guarantee they’re still on the call. But their question was kinda specific, actually, but maybe somebody still on the call has been in, like, a similar situation. So perhaps, you know, your advice could be useful, for everybody sitting in. But they’re kind of described a situation where they’re saying, how would you deal with an adjuster and their supervisor that are refusing to review the file themselves after a third party has reviewed it, leaving the customer with a large out of pocket cost, about fifteen k. And are you getting and you’re getting nowhere, with a third party reviewer as they’re stating that it’s up to the insurance adjuster to make a decision on what they’re paying. So when you run into situations like this, it’s usually a breakdown in process. You you somehow got to the end of the job where you now have a a substantial dispute. And, ultimately, we can easily say it’s the homeowner’s responsibility, but and and and that’s true. But I think there’s a you know, that’s the easy out. I look at a process because if you don’t get paid that fifteen grand, you have to increase your cost of of acquiring that that fifteen thousand dollar difference. So you’re gonna have what process would I put in? I can send it to a lawyer to try to get my fifteen grand. Part of what you’re doing is is looking at your entire process from the contract to the collection. And so I look at is where do we fall short of coming up with the right dollar amount? And you might have done everything right if you communicated everything right, and that’s fine. Usually, there’s a communication breakdown somewhere along the line. If you sign the contract with the customer and you say, you know what? We’re gonna do this work and it’s this is how we’re gonna charge you. And the insurance come back company comes back and you don’t have a relationship with them and they say, nope. We’re cutting all this. Your only action that you have is to lean the house and sue the homeowner. You don’t have a contract with the insurance company. And I heard this amazing it was an amazing piece of advice is is sympathy versus empathy. So a lot of times we sympathize with with people. We take their pain on. Oh, you you bought bad insurance. You grab the cheapest insurance out there, and now you’re surprised they’re not paying. Your services are worth the extra fifteen grand that the insurance company says they’re not paying. It that the homeowner chose the worst insurance company they could for the price that they decided to pay. Is that your problem? You can empathize with them and be like, that’s not a very good situation to be in, but you needed to have these services provided. And because we provided it, I made your home healthy, I prevented mold. I cleaned you up. Whatever you did to to restore them, I’m entitled to be paid for my services. No different than if you go to a dentist and there’s stuff not covered by your insurance company. You have to pay the difference. The difference is our bills are bigger. Do you offer them a payment plan? Do you have access to be able to say, hey. Do you give us a payment plan, and we’ll we’ll we’ll put you on a twelve month or an eighteen month payment plan? Ultimately, cutting your bill is not the answer. If you apply legal pressure to them, which is not fun, but if you lean their building and you put them in small claims court or or sue them, their insurance company will have to take action. There’s a lengthy process. So normally, what I do is I’m like, what’s that legal process? I failed at the beginning of my legal process. How do I streamline my my business so that I get less of those? You’re not gonna eliminate them. You’re just gonna get less of them. It’s it’s a process thing. It it all has to do with, you know, do they owe you money up front? Do you get a retainer from them? Are they responsible for the difference? Did their insurance company make an like, agree egregious discounts that they’re not entitled to. If you have to apply them to the court, you have to apply them to the court. It’s just the way it is. Or you write it off and say, hey. I just that that’s a learning lesson for me. I I can’t do that again. Awesome. Thanks, Chris. While I while I kinda go back to our question list, would you mind putting the QR codes back on the screen? Somebody was asking for your estimating course and beta groups specifically. Yeah. So so this one over here, the green one, that will get you the the sign up for the conference and if you’re interested in when we got our product launched. And then I’ll tell you guys about it when we’re done q and a here. But then we have a beta group, which is for anyone that’s like, hey. I’m I’m okay coming for the ride with you while we’re building this thing out. The blue barcode is is, yeah, you wanna be on the early adopter with us. And and if you scan either one of those, I’ll let you know about the conference we got coming up in July. Awesome. Thanks, Chris. Yeah. I’ll I’ll minimize size myself up here. So we got a few questions left. I I wanna prioritize the ones that have a name attached to them just because I wanna make sure that I get to people first who I know for a fact are still on the webinar. So I’m gonna jump ahead a little bit in in the queue of questions. So hang tight. If you posted a question anonymously, I do want us to get to it. I just wanna make sure I get these specific questions first. So Gore sent in another question. Says, if we’re cleaning salvageable items, can we use an Xactimate, bid item? Oh, so here here’s here’s the thing. Could we use bid salvageable items? Okay. So is this salvage that the insurance company wants to sell after, or is this stuff that we’re actually, like, doing a cleaning on? It I’m not a big proponent. I know there’s a green initiative out there, but if you could have cleaned it properly to the insured specifications to get it back to them, then that’s money well spent. Right? So so let’s say that an item cost a hundred dollars and it cost us forty dollars to clean it, and it can go back to the home. If it’s not good enough for the homeowner, I’m not a big fan of taking items and cleaning them so that we can donate them or give them away. That’s landfill. Like, they’re they’re not normally used items. And so there’s there’s a we’ve seen in the industry a push to, like, clean things so we can sell them to re lower the insurance company’s cost of doing business, but there’s still a cost. Like, there’s like, maybe if the thing has high value, it makes sense to do it. But on, like, your normal general household items, the grass sale items, they hold the grass sale value. Why are we wasting our time on it when we’re increasing the risk of someone getting a contaminant from not their house? So if I’m reading the question right, it’s it’s salvage. If we’re taking salvage items and cleaning it so someone can sell it, no. If if I’m doing it for, like, you know, employees that want a couch and they’re like, hey. I think we can clean this. Maybe. But if I couldn’t clean it for the homeowner, I’m sure as hell not gonna spend my time trying to clean it for some random Sense. Thanks for that question, Moore. We had a question. It’s kind of very, I guess, open ended from William. I think I know there is at least one William still on the call. Said what estimating software would be your top recommendation? It’s hard. Depends on what type of work you’re doing. So I like I like Xactimate. I’m still a big fan of it. It’s just in the program, it’s it’s got limited rules. If someone puts guardrails and tells you your hands are tied behind your back, it’s really hard to operate it right. I like rate and material, like, time time and material pro. If I’m gonna do commercial jobs, I like great material just if I’m doing, like, small jobs. Your own unit pricing, like, just having a price sheet and just running a tally sheet works just as good if you’re doing a small job. Like, it depends on the type of work you’re doing If you’re gonna play in the program work if you’re not playing program work, I avoid their systems. Right? Like, I’m I’m not gonna walk into an auditing funnel. It’s kinda like like a trap. I’m not walking down the auditing trap if I’m not playing the game the way they wanna play it. So my hourly rates are different than their hourly rates. I’m not putting my estimates in the system that they can easily auto audit auto audit. I’m gonna play the rate material game. It depends how you play the game. That’s that’s really what comes down to it. And you should have a strategy on, like, hey. Some of my book of business, I’m playing by the rules. Some of it, I play by my own rules. There’s nothing wrong with that. It’s it’s it’s good for you to have a strategy on how you’re gonna price your business. You have to sit down and actually think about it, though, and be like, hey. On these types of businesses, I’m gonna have this price list with this rule set, and this is how we’re gonna do it. And then when we do program work, we’re gonna do it this way. When we do property manager work, we do it this way, and everyone knows the system you’re using. But I like Exact. I’m not a huge fan of Symbility just from or whatever they call it now. Just from the the framework that is more detailed, which means more mistakes. I like I like exact program, and I like t and m. And then if I can, I’m bidding it or going value pricing. Like, I don’t I’ll give you a number. I don’t need to break it down for you. And then before I send your question, come in, bid items, like, bid item there, like, again, there there’s no methodology behind their content cleaning line items. Like, it doesn’t say it’s this much fluid. It’s this type of equipment to clean it. Like, their bid item or their their unit items are actually, like, mini bid items. They have no idea how they built it. It’s kind of based on what’s the replacement cost of an average item, and then let’s give it twenty five or thirty percent of that. If you were coming up for a price, like, you have to make a decision. Is that where you can do business on a price? Like, does the unit price of cleaning a salt and pepper shaker make it worth doing, or is the unit price on cleaning jeans worth doing? You have to make a decision. If not, change your price. If the insurance company says don’t change the price, then if you’re, like, seven dollars per pair of jeans, not worth it, they get an. Economically nonresorable. So I think you couldn’t do it. Let’s say you couldn’t do it for the dollar that they were offering. Economically nonrestorable. Right. Let’s see. Here’s one from Garrett. What is a good way to combat an adjuster or carrier that says they can only allow for standard grade on flooring, the lowest price of the four flooring line item options without an ITIL report? We use average grade pricing on all flooring with supporting documentation to justify high or premium grade if needed, but it seems a lot of carriers are switching, or wanna go with standard grade materials and everything. Yeah. So so it’s it’s not ethical either way. Right? Standard grades without an ITIL. What they’re saying is, hey. We know we’re getting you have to look at it. They put processes in place, and the average insurance company is not really well educated on how the game’s played, how the restoration game’s played. So they put processes in to pull the outliers in. Like, hey. There’s one company who always put premium carpet in, and it could be average. Well, let’s just charge standard unless you have a validation from a third party. It makes sense on the law of big numbers. It’s not necessarily right. I wouldn’t even care though if if it was like, kinda own flooring, I’m good with it. If you wanna give me an ITEL and that’s where you want your validation come from, if it says it’s premium grade or standard grade or in between, cool. I don’t care. But to just randomly guess at what we’re dealing with, if the insured has a, you know, a receipt or they have what the like, very few do. But, otherwise, I’m I’m good with third party saying, hey. Like, it’s standard grade unless we get an ITIL. Send in the ITIL. Send in the sample and and get it inspected or do the digital ITIL. I don’t have a problem with that. Like, that’s to me, I like that better because it’s at least we’re now trying to get to a right number. And then once we get the grade, we can then figure out our cost and hit our margins off there. Flooring is actually a nice book of business where you can still make forty points on flooring if you’ve got the wholesale flooring supply. I think it’s a good good position. Even if you’re doing retail, you’re making your overhead and profit on it. Okay. Whatever they want. Again, it’s the homeowner that has to battle if they want higher grade carpet or lower grade carpet. It’s not my fight. Like, they bought junk and turns. If that’s the fight that’s there, it’s not my fight to be had. I’ll I’ll put in, you know, premium Italian custom tile if that’s what you want when you had linoleum before. If you want that vinyl sheet wrap, cool. You want custom Italian? I’ll put it in. Who’s paying? That’s all I need to know. It was like, are you paying the difference? No. Then you should fight your insurance company. Otherwise, you get a standard grade. Like, just don’t make it your problem. You you the you got too big of a career, too long of a career to to win every fight. If the homeowner is happy with standard grade, then I’m happy putting it in for them. That’s just my my old mentality used to be I would fight tooth and nail for them, but then I realized that they bought cheap insurance. And the byproduct of buying cheap insurance is they get something. They don’t get top of the grade replacement. I don’t lose sleep over it anymore. Like, if you trouble that insurance and they they jerk you around, that’s on you. That’s not on me. Don’t make it your problem. You’re a contractor. Your job is to go in and and get the scope. You just need to know who’s paying. They wanna upgrade? Cool. They’re paying. Well, they were entitled to more. Maybe. Maybe not. I’m not reading their insurance policy. I didn’t pick the insurance company. They did. They told me this is how much they’re paying, and I’m telling you this is how much to get you back to what you need. You make choices. Make make it their choice. And it sounds cold, but that’s the business we’re in. Like, I’d love to help you. On the mitigation side, I’m actually more sympathetic than on the rebuild side. So maybe it’s just being older and crusty. But I’m like, at the end of the day, you bought cheap insurance. That’s what you get. And I just you see two hundred or five hundred jobs a year. You don’t have time to sit there and get emotional over everybody getting less quality carpet. Like, this is it’s not your business. Okay. Question from Ricky. It’s been waiting on this in a while. She says, do have a question on Xactimate. I’m always being questioned on removal of labor minimums. Even if we remove a sink or vanity and toilet, as an example, and we only do mitigation. Yeah. So He also adds, I’m not on program work, but always deal with a third party for review. So those minimums are built so that you can go in and and, you know, it’s four hundred dollars whether you do one item or another. Now if you’re bringing a plumber in, the the argument is who’s doing the work. So if you’re doing it as a water technician, you’re like, hey. We’ll take on the liability of detaching a toilet, and it’s part of your your labor hours as a water damage technician, I can see that. You you know, we charge you a plumber rate. There’s probably no minimum if you’re just doing the mitigation. If you brought a plumber in and they were just to take a sink apart for you and it’s kinda one of those things like, how do you do business? Again, the program, digital software is built one way. How would I actually charge you if it was rate and material? So if it was rate and material and I was doing the work and I said to my technicians, hey. You guys know how to turn the water caps off on the toilet? Yeah. Can you take it off? Yeah. Do I wanna make that decision? Yes. Okay. That’s our liability. We we accept it now. So now I said we will detach plumbing, but we won’t put it back in, and I think that’s what you’re saying. Then what I would do is I’d be like, well, I would just charge you the tech time to do it, and it’s just part of my service. I’m not gonna charge you a plumber rate for doing that type of work. I would I would lean more into the insurance company’s argument on that. The only reason I would I would defer from that is you’re using it as a line item. So if you detach the toilet, could you use the WTR or the HMR codes that are around that? Yeah. Maybe. And and then is there a plumbing minimum if you do it that way? No. But do does are all the line items in in exact? No. They’re not. So then you have to change the labor code in each item. It it there’s no clear answer. It’s your business, but I would probably half agree with them is that I wouldn’t charge the minimums. If they’re letting you charge the plumber rate on it, take the plumber rate. Like, it’s a pretty good deal. You didn’t have a minimum. The minimum is there. The minimum charge is to say, hey. I’m charging you a minimum to have a plumber come in because they won’t show up for twenty four dollars. So the the the the the thesis around the the the minimum is that you have to pay three hundred twenty five dollars to get someone to show up to the door, four hundred dollars, whatever the number is, to get them to show up to the door to do that twenty five dollars of labor. If that’s not true, if you’re not having that person come in, then the labor minimum gets wiped out, and then you’re getting paid for the time that you’re there. That’s the theory. So if you were, like, I’m in house, we’re doing it, then I would agree with them. I wouldn’t pay the the minimum. But that doesn’t mean that you don’t have some kind of like, your pricing scheme could say, hey. When we do plumbing, we charge a two hundred and fifty dollar minimum to touch the plumbing because it’s a liability, and then we charge our normal hourly rate after. Like, you could get into that that kind of pricing scheme, but you’re getting into complex custom pricing. Just as a general rule, would say I would probably just charge the hourly rates and get rid of the minimum if me and my team were doing it in house. Well, I hope that helps, answers your question there, Ricky. I should probably go back and respond to some of these anonymous ones. Hopefully, the, the people that posted these are are still here, and then I can jump maybe back down to some of the more recent ones. Well, let let’s do let’s do, a couple more, and then and then I’ll I’ll rip through it. I we’ll we’ll get done here in the next fifteen. How about I do this? If you posted a question anonymously, you know, a while back going back to two PM, if you’re still here, repost it for me. Otherwise, maybe I’ll just assume you’re not here anymore, which is, like, maybe a little not fair of me, but I just wanna make sure we can get to people that are definitely still here. So here’s one just came in. It’s a hot one. I’m charging time and material for a fire loss, full p p full PPE. For packing, I’m using lab CLNR. Adjuster wants me to use, CDC lab c, which is a lower rate. How do I get it through their head that there is a premium charge working in a fire smoke contaminated situation? CDC lab c is for any generic packing. Yeah. See, that that that’s the problem I have with the the program is that it was built based on, like, nineteen ninety standards. And today’s world, we have more laws around us. You’re not I don’t think you’re wrong. Like like, straight up, it’s it’s there’s a lower price in the program, so you should charge us the lower price. Again, it’s inside picking off a menu and saying this is the price for the service. It’s like, well, if I just did you time and materials, let’s say my guys are in full PPE. They’re in a hazardous environment. You’re paying the hazardous rate at rate and material. The fact that they’re now like, oh, no. We want a different rate. It’s it’s what’s the justification of that? So one, what’s your site safety assessment say? So do you did you do a site safety survey that says your guys require PPE? That site survey could be built into your contract saying when these conditions are met, we charge this rate structure out. That’s how I would build it, is that it’s the rate structure is based on a site safety assessment. And so then you have it. And then when when we get into, like if you go deep into, like, contracts and and strategies around pricing, that’s the first place I would go is, like, what’s my contract say to elevate that price to this term? If you don’t have it, then it’s an opinion. And so we wanna get away from opinion. You wanna actually have it based on what is the number, how do we base our our price on that number, and what justifies us choosing this category. Site safety assessment says if we’re in PPE and the site has been deemed hazardous, then we charge the hazardous rate. And then it’s really not a question then at that point because then they’d be like, well, this lower rate. That lower rate applies for regular work, and we’re not in regular work. We’re in this work, and that’s the rates we charge. And you could come back and say, hey. Any work we do, we switch the normal rate to the HMR labor code, And that works too. Right? Because you get a higher price even though the inefficiencies aren’t built into it. At least it’s better than it was. There’s no good answer. That’s the problem with with exact domain stability. There’s no good answer because it’s it’s a it’s a **** system built by the pricing system isn’t built for restores by restores. It’s built by a combination of people that think that, you know, we should modify our numbers to make the insurance company happy, but we modify the numbers to make a restore happy. It’s garbage system if you if you look at it from that perspective. I like it because it’s you could tune it. I love that. It’s when it gets into, like, well, this way you should charge me. No. This is how I am charging you. That’s how we price the job. The problem is there’s no there’s no best practices built in the industry to say this is how a job should be charged and this is appropriate because everyone’s worried about antitrust. Like, if you look, that’s the biggest challenge is anyone and everyone has an opinion, and none of them are basing it based on fact. So put yours more fact based, but, again, you’re still getting in these arguments, and then it’s just opinions, and then it’s a business decision. There’s no good answer. We’re not that well organized as an industry. Okay. I True. Let’s see. A lot of these questions are older from anonymous people and who I haven’t really gotten anybody back in the chat saying, hey. Me. Me. Me. There was one question from a gentleman who or a person who is still on the call, I think, R. Romney. This question, though, is, like, quite specific. I think it it might be better to take offline. I think, Chris, you may maybe share an email Sure. With the with the attendees. So to you, r Romney, we’ll we’ll get you Chris’ email. You might wanna pose the question offline. That might be a little bit better way to get that that question answered. K. Tell you what. Let let’s do this. Thanks, Kristen, for going up. Let I’ll roll you guys through. Some of you stayed on this call long. If you if you wanna see what we’re doing, I’ll share that, and then I’ll stick around for another ten minutes as long as my voice holds up here. I’ll stick around after for anyone else that has questions, and that way we keep everyone happy. And I’ll share with you with you guys with what we’re doing here. So we came up with with this, and I’ve it’s been it’s taken me longer than I expected to to get done, but it’s pretty awesome. What we’re doing is we’re putting together the everything that’s that’s based on Profitable Restore. So, like, technicals, how they time in. And what I realized when I was with �Թϲ����� is that everything that we had been taught in the industry and everything I was trying to push through on the digital side was up against the old way of doing business. And I kept coming back to this question. It’s like, what if everything I was taught was wrong? Because every time we put try to put digital technology into Restorer’s hands, it always conflicted with, like, how things actually happened in the field. And that’s where I realized the standards and the business and the technical and the technology, they didn’t they weren’t all compatible. And so when I came up with this question, it’s not that it’s technically wrong. It’s just what if it’s wrong for business? And when I looked at the business, I was the the part I was looking at is how do you increase your profitability? Well, you can do two things. You can actually make more money on the jobs you do, or you can grow your business and expand the growth of your business. Either one will make more money, but one’s easier to do than the other. It’s easier to make more money on the work you’re already doing than to go and double or triple your business. And when I started to look back at, like, when I failed as a business owner, when we had those rough years, all the things that happened and all the that impostor syndrome, all that negative talk I did to myself where you basically just shoot yourself in the foot, it all came in and and it was you know, I thought it was on one hand, I had the impostor syndrome. I I thought I was doing really well. And on the other hand, I was losing money in my business, and I felt like a loser because I’m like, I can’t figure this out. And I actually was about to quit the industry at that time because I had another job offer in agriculture space, and I was like, I don’t know anything about agriculture. I’m sure I can learn it faster than this. And what I realized is you gotta stick into this, and I told you about the Dunning Kruger effect. I was at the bottom of the Kruger effect when I when I quit is I knew enough that I knew I had no idea what I was doing. And I also knew enough that I was like, there’s a lot of things I did wrong. And you get in this helpless feeling. So I was trying to figure out how do you get someone past it. And the best way we came up with is that if you can train somebody faster through the processes of tactical, you can get them through it, and you can actually get someone to profitable and really profitable really quick. So what we did is I’m building I built out this estimating strategies. We’re just finishing up the last production on it. And so what it is is going through and explaining in detail how to build all five of those estimating systems out so they all work together. And then what we did is we basically said, hey. If you come in and you have a strategy of when you’re gonna use these systems, how you use them, how you can negotiate, which levers do you pull, you’re in control of your price and your margin. You’ll know what to do and how to do it and when you’re making money and when you’re losing money. So we put that in the course, and then we came in and said, okay. I’m gonna teach you profitable Xactimate. Not Xactimate level one, two, three, but I’m gonna go through every level so that you can level up and get your certification. I just can’t do it as an XCT. I I can’t be banned from saying things that are true about anybody’s program. So I won’t sign anything that doesn’t allow me to just talk straight facts about their program. So you can learn level one, two, or three. So you can go get certified. But the way we’re gonna do it is we’re gonna focus on anything in the program that is buttonology that’s wrong. I’m gonna teach you how to do it in the business that’s right. So we get rid of all the bad lessons right before you start. So if you got new estimators, we’re not teaching them bad habits that lead to lower margin because that’s what happened to my guys. And all of a sudden, we started teaching buttonology, and they started making bad decisions. So we’re gonna go in there and teach exactly how you do it so you can make a profitable estimate. The other thing is is when do you come up with your own price list? So I think you should have multiple price list depending on your customer. And what’s interesting is if you do a cost of doing business analysis, you figure out what your overheads are based on your projected volumes. They change. So you run some different scenarios. Like, what happens if we have a really big mitigation year versus what if we have a a drought year and we don’t get a lot of emergencies? Your pricing is gonna change. You’re gonna have more overheads if you don’t do as much mitigation. So you have to have that figured out and you review it monthly. Now the monthly review is really easy. But once you do that, you can come up with multiple price lists so that you have the way the right way to play the game. Hey. I’m doing military and and government contracts. Well, this is the price list we use. Hey. I’m doing a property manager. Then this is the price list. I have a bad insurance company that I that never pays. Well, then this is the price list they use, and here’s where I negotiate versus an insurance company that really is good to us. Well, then this is the deal I give them. And so we work through that, and we build that customer strategy out. The other thing that holds most owners back is how they understand money. So the staff and the owners don’t see money the same way. So it’s the concept of money, how we think about it, how we value our goods and services, and it’s sort of the question that came up with, like, contents. Like, how do I value what my cleaning bill should be? I don’t know. Fifty percent of replacement seems like a good deal. It’s either you pay for replacement or you give me half the value replacement. Well, I won’t pay you twenty five percent. Well, I can’t do it for twenty five percent, but I could do it for fifty. So we come up with how do you value your goods and services, which comes to to starting to put a value on the price of your business. How do I get the customer to perceive that value, and then how do I justify charging the customer the dollars that I’m gonna charge? All of that comes into not feeling guilty about generating profit. And so inside of there, we also talk about where do you pay bonuses for your staff and how do you make that work. Other part is and where we see most of the problems is estimators are are not understanding dollars, and some owners don’t understand dollars. We go in and explain exactly how profitability is built. What’s the difference between markup and margin and get the entire business speaking the same language? Contribution margin, and financials, how each silo is impacted differently, and how you have to actually make sure you’re estimating is aligned with each silo. Then we go into the margin curve, and the biggest mistake estimators make in losing money is that they they look at every percentage the same way. So we break that down and start putting band or expectations of where estimators need to crank profit. And then what we do is we go to the hidden dangers of cost compression. When you go to scale, your business hits this major frustration of you don’t have enough money to grow, but you’re also not able to get through some of the bad areas where you’re losing money. So that cost compression is what holds your business back. So we’re gonna work you through there. And it all comes down to to to being a good estimator, but it comes into running a profitable business. And then setting competitor traps, when to pass on jobs. I don’t like to take low margin jobs, but you have to make a a strategy in place. When you do take a low margin job. Someone has to approve it before it happens. So we did that. We came up with that whole business, and then we went back and looked at what are the mechanics of actually running estimates. So we would have the ROM, when and how to use the ROM, how to properly communicate your range of your estimate. When I hear that that fifteen thousand dollar loss where you’re like, hey. We’re fifteen grand out. At the beginning of the job, if we said it’s between fifteen and thirty, and then at the end, we’re like, hey. We’re, like, between twenty and twenty five. We’re we should only be a couple grand off the mark. Somehow, the communication process failed where there’s, like, a fifteen thousand dollar difference. Usually, it’s it has to do around wrong or the do not exceed mistakes that we’re seeing. Then what we have is we have selling change orders. So we’re not, as an industry, very good at selling. We’re good at order taking, but we’re not good at selling. So it’s using change orders to up this the margin of a job, not to just decrease the margin of a job. And then what we do is we wanna get rid of those scope battles. A lot of you guys were talking about where the scope is is being battled. I try to deal with it before we get into the estimate, and then we track cost in real time. And that’s where we track to make sure our margins are on there. And what we’re doing is when when you’re in this program, a lot of it’s self learning. And then what we do is every two weeks, we get together for a ninety minute session, kinda like what we’re doing right now. We teach something, and then we sit and do q and a for an hour, hour and fifteen depending on how big the lesson is. And we just work through different problems, and then that leads to next the next coaching session. And so we do these biweekly coaching sessions where we basically sit down as a group and figure out how are we gonna make more money, what challenges do we have, how do you you know, how do we break through on an estimating system? Hey. I’m trying to apply this system into my business. Why is it why is it struggling? And then finally, what I did is I came up with a system where for a lot of you, we saw about fifty percent of you weren’t making money. So for a lot of you, what we’re doing is we’re gonna put in a seven day cranking profits challenge. You don’t have a lot of margin to play with, and I’ve been there. I’ve lost money. So what it is is if you come in and you sign in to the program, for seven days, all we’re gonna do is look at low lying fruit. Forget the fundamentals of estimating. Let’s find you some money. So we’re gonna focus on for seven days, your one week, let’s go fix the the most important parts in your business just to get some profit coming in so that you can reinvest it in your business. Then we’ll spend thirty days getting your estimating systems set up. And all we’re trying to do is get away from that that horrible feeling of, like, I’m wasting all my time spending on a treadmill, and we want you to be profitable again. So that seven days is focused on profitability, and then the thirty days is getting the fundamentals built into your business. And from there, we train in and get you to be a powerhouse estimator. All of that’s gonna qualify for RIA and the ICRC credits, And so that’s the that’s where I’m at right now. And then what we’re doing is when we sign up now we haven’t come up with the full program, so that’s gonna be released in in June or July. I haven’t come up with a price point on it, but it’s gonna be an all inclusive price. So as we add water damage, fire contents all in there, and I’ve got trainers coming in, it’s gonna be just an all in one price for the online stuff. If I have a thirty day money back guarantee that we’re putting on it, so, like, there’s gonna be no risk. That’s where you come in and you’re like, hey. If I wanna be part of the beta group, when we announce it, you can say, yeah. I wanna be part of it. If you’re like, hey. When this built, give it to me. That’s what the two QR codes are for. So sorry. I’m losing my voice, but that’s the that’s the appreciation for letting me pitch you on that. I’ll put those QRs up again, but you’re gonna get all of this. And effectively, my goal is that you’re gonna get a ten, twenty, thirty time ROI on your investment because you’ll have a ton of time and money to spend not doing it right. So that’s rolling that one. And we’ll come back, and I will those are the QRs. If you’re in the beta, you’re in the blue. If you are like, hey. Wait till we’re done. We’re in the green, and then I’ll take some more questions. Really exciting, Chris. I I think there’s maybe I’d say maybe two more questions that we might wanna answer. This one is, from, Elena, I think. Says we are a mitigation and restoration contractor, not in any programs, but we get pushed back. Like, we don’t pay for that or we don’t accept that charge. And she’s wondering, you know, why are we held to program rules when we’re when we’re not a program vendor? So that is a normal problem here in Canada where so it depends. So here’s the other thing. Are you on a franchise or not? Because that that that depends too. We used to be on we used to not be on the same programs as our sister franchises. And then you you you dig heels in here, and they’re like, well, I’m gonna punish the people next to you. If you’re an independent, you can play the game more, like, harder. Their rules, their program rules don’t apply to you because their policy isn’t written. So an adjuster on on the call can tell you the policy doesn’t say that they don’t pay for this or they don’t pay for that. That’s an internal policy decision. Nobody tells you that you can’t charge, like, emergency service call during the day. You could charge it. Is it two hundred and fifty or five hundred dollars? Doesn’t matter. You could charge whatever you want. They have policy wordings of what they are and aren’t responsible for paying. It’s gray, so it’s a dispute. If it’s in between, you make a decision. If you if you take the price reductions of being on a program and they pay you quick, I’d be like, hey. Listen. What what what do you want? How much how much from the price that you had to the the price they want? Is it five percent? If it’s a five percent reduction, I’d look at it as as part of my cost of doing business. If I’m in that space, I go, hey. I deal with this one insurance company. They always wanna give us program rate revenue. I I I I need to know how much they wanna cut for me to make a decision whether it’s worth fighting for. It’s like, hey. Pay me quick, and I’ll I’ll take your deal. Because the the alternative is, what was what was the deal for a program vendor? I’m gonna give you volume for that discount. Okay. Well, I’m not getting volume from you. So I want quick payment for that discount. I’ll take that. I like that. And then I feel good about it. I got something in return. If they take four months to pay me, though, I’m not gonna be very happy. Right? But you’re in a position where it’s like, do you wanna dig heels in? Is it someone you wanna work with, or is it someone you don’t wanna work with? The customer could pay the difference. Like, that’s fine too. You you the program rules don’t apply. What does your contract say? What is your communication process during the claim? And then what is the payment process? Most of that conflict happens at the beginning, but we don’t deal with it there. So if they have program rules in place, we should know it before we start because we have to make a decision. Do we wanna do this work or not? Right? There’s one insurance company in the Midwest that every time I hear them, like, oh, that’s a that’s a absolutely horrendous deal that they do because they always fight every every invoice after after the fact. Like, why would you even do work for them? Make a decision to not do work for them. Okay. Alright. So, Chris, this came in from our a while ago. I mentioned it earlier. If you feel like you maybe wanna answer it offline, that’s fine. I’ll go ahead and pose it. Okay. The question is, I’m interested in starting a local company which solely works the content loss end of claims for inventorying and valuation purposes. It seems there are companies handling this that are not local, and they hinder the inventorying process due to blocks in the extensive communication chain. How feasible do you think this is? Not interested in restoration itself, but may accept jobs from both insurance and restoration companies. Yeah. So so there’s two things. I it’s a very feasible company. Having that third party inventory done properly is is, I think, hugely important and might even be something that you could call an emerging market in our industry. There’s two threats to that model. One, restorers could do that and charge for it if the insurance company decided that they wanna use a restorer as a partner. But right now, insurance companies look at the restorer as, like, the necessary evil, and they need third parties all over the place to do the work. I don’t think that’s gonna change anytime soon, but but some of the market would slip over to the restorer saying, hey. We’ll do the inventory for you. We’re already there. And it’s just coming up with a replacement cost pricing, which is an administrator you need to have. I think you’re gonna see some people move that way, some franchises probably move into that space because it’s just another service offering, you know, a differentiator. But is there is there a need for a third party to come in and do an inventory? It’s it’s been done for a lot of years, so it’s it’s an established market. And the reason I say it’s emerging is I I think there’s still it it’ll depend on what the insurance industry does. Now that they’re putting more field adjusters back in the field or they’re hiring more field adjusters, they’re not gonna do the inventory. So they’re they’re gonna wanna go look at the loss and have someone do the inventory for them because their goal is to be processing claims. I think that’s still a market that’s out there. The two things that will be a threat, can technology be faster at doing it? Maybe. And then the other one is can restorers go and do that service? And and they haven’t moved too fast on it. So is that a major threat? Contents is not the primary wheelhouse of a restoration contractor today. If it becomes more of a a primary service for restoration, then I would say that that’s that’s an easy place to absorb revenue for a restorer. But I I don’t I don’t know where that goes. But it’s a good it’s a good model, and and and it is getting a lot of uptake depending on the insurance company you’re dealing with. I appreciate you answering that. I don’t know. We got a couple last minute questions that came in after five. Chris, I wanna be respectful of your time. I’m putting you on a call. I’m good. My my voice is still here. Okay. So are the gentleman the person who sent us that question has a follow-up, but somebody else sent well, if we’re gonna do both, then Do both. A follow-up. So he says, how how do I figure out what to charge for this? Charge for what? This contents business you guys were just Oh, so so there’s there’s things to ask her. They’re, like, price per item. And then so you so you got kinda like the same thing. You got unit pricing, right, where we come in and say price per item. We assume it takes five minutes per item to research, and you do price per item, or rate and material. It’s a hundred and twenty dollars an hour or a hundred and fifty dollars an hour or whatever you charge to to go in and price that inventory out. And and just so you know, just it’s it’s professional service. And because you don’t have the volume, the price the hourly rate’s probably higher than what, like, a technician is. So when you look at it, rates that I’ve seen in there is not different from, like, eighty to two hundred dollars an hour for that type of service. When you look at that type of service and you’re like, well, what if I do unit price? Well, if you get something that’s really unique, like an antique or a hard to to locate item, maybe it’s like for like, you could do blended pricing. Like, items that take less than five minutes is two dollars or three dollars an item. Items that take more than five minutes is t and m. Kinda have to come up with your pricing, but those are really your only two models. It’s a per unit price or an hourly rate, and it does it all. The hourly rate to me makes more sense because your your job is to get completeness on the list. If it takes longer to research prices, it takes longer. If it’s shorter, you would win if you’re on unit pricing, but your risk to lose is much higher. So I would just do rate material. Yeah. That’s good info, Chris. Thanks for sticking around and get waiting for that that question to to that person that asked. I guess I see one more in here, which is from Cassie saying, is there a way we estimators could get a catalog or list of things that the insurance companies will pay for or not so that when kickback is given, we can push to get items paid for? Well, there’s not. We’re actually building something similar to that is I’m working I’m working with a company. We’re we’re actually working on how to create the right compliance piece for insurance. So I’m I’m working on that on an estimating side. We’re not there yet, but, effectively, what we’re looking to do is wherever there’s compliance reduction, I wanna track how many dollars are being reduced off of my estimate. So from a business decision, if I wanna do work with somebody, I wanna know and, like, anything. Right? Like, we we hire a painter and the painter gives us a discount on their invoice, but then they give us a discount on, hey. I do extra things for you. What’s the value of those extra things? So I wanna know when I base a decision on which insurance company I wanna deal with, what are in the written rules and what are in the unwritten rules. And and I need to know how much dollars I lose every year into the unwritten rules. I should also know how many dollars I lose in the written rules because one SLA might look really bad, but when we get into the program, you realize that that’s how they enforce the job. It’s just whatever is the SLA, that’s what they enforce. Everything else is free. Another company, the SLAs is what gets enforced and the unwritten SLAs get enforced, and all of a sudden, it’s a junk contract for you. So we’re working on trying to come up with a method to track the profitability on there. So the only thing I could say is click on those QRs, and then when I get that in place, then we’ll we’ll have that program in place, and and it will help dramatically reduce your the amount of dollars they’re slipping through. No. It’s it’s the other side of it is it might make sense to have those dollars slip into those those reviews. Like, you may have very low marketing costs and very low overheads to win that work. So then I would make a trade on how much money am I trading for the book of business that I’m getting. Like, it this this industry is really emotional. Like, I say it. I’m like the pot calling the kettle black. I get emotional when people cut my bills. I don’t like it. So what I do is, like, I I worry about how do I build a pricing model where if my bills are being cut, I’m making a financial decision. Mentally, I have to be in agreement with the fact that I’m getting my bills cut. If I don’t get my bills cut or I don’t want them cut, then I’ll be like, I’m not doing it. I’m not doing it for this price, pound sand, until I understand the financial situation. So what is my what is my potential upside? If I know what the upside is, like, hey. I’m gonna get a million and a half of revenue, and I gotta give up a hundred grand for it. How much did I make? Did I make forty or fifty percent on it? Okay. Well, I made five hundred grand. I can give up a hundred grand for that. Oh, that’s okay. But if I gave up four hundred grand and I only made two hundred grand and I and my overheads don’t cover it, that book of business is off my books. I’m I’m wasting time. So it’s a good question, but it kinda depends on, like, what your margins are, what your volumes are, and and then what is the individual company. And it changes. The the really wild thing is it changes region by region. I just did two weeks ago, I did a survey of, like we had three insurance companies. I won’t name them. But I put three insurance companies on the board and said, one, like, which one would you say is a high quality insurance company with the pays well? And then which one’s a low quality insurance company that pays really poorly and who’s in between? And depending on the region, people were marking it differently, and we’ve had this discussion. And it was like, hey. This top tier company is up here, but they’re also down here. Why? Well, in my region, they ****. Ah, okay. So but they’re a top tier company. Yeah. But not here. And so it depends who you’re dealing with. What’s the branch do? What’s the national protocols? There’s so many factors that go into it. Right. So I think I think that’s probably a good place to, you know, to cut for the day. Well, I’m done. Thanks for sticking around, guys. A bunch of you guys made it to the end. That’s oh, I always I love it. You guys are enduro ***. And I know it a marathon, Chris, so we thank you a million because I know we’ve got lots. You got my contact info. Find me on LinkedIn and Facebook. Love to be friends. And then if you see me floating around, just say hi. And if you need anything, reach out to us. Appreciate you guys. Well, I will echo everyone in the chat and say thank you. Thank you, Chris. It’s always, so educational to have you out, and we’ll be looking forward to the next time. And I wanna thank everyone else, as well who attended, especially you, you know, troopers who stuck out, you know, to the the very end. So we appreciate you guys giving us so much of your time and afternoon. So thanks all around to everyone. I hope that you all have a great evening. Have a great day, guys.