The massive flooding in southern Alberta last summer was a Petri dish for pop-up businesses. No surprise, Canada’s costliest natural disaster triggered some 25,000 insurance claims and a huge need for reconstruction, environmental testing, temporary housing and other disaster-recovery services.
Severe weather pummelled other Canadians, too—part of a global rise in severe climatic events linked to rising temperatures. The number and size of Canada’s climate-change “red zones”—areas prone to highly destructive weather—grows yearly, says Stephanie Beattie, CEO of the Centre for Disaster Recovery in Barrie, Ont., whose company trains construction firms in microbial remediation, structural drying, asbestos abatement and other skills often in short supply after disasters.
The result is a long-term opportunity for innovative entrepreneurs. For example, specialists known as hail chasers can make $250,000 or more a year flying around the world after major hailstorms to massage out dented vehicles without drilling holes in the bodywork or using fillers. The key to breaking into disaster services, says Beattie, is to specialize, as few companies have the knowledge or equipment to do all facets of restoration well: “I don’t think the industry has gone niche enough.” One such niche she sees? “Drying, drying, drying.” After a flood, residential and commercial structures require different drying techniques, and there aren’t enough companies that do either well. Even fewer firms have the skills or gear to dry hardwood flooring or other hardwood structures.
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Brandon Burton, technical director for Burlington, Wash.-based Legend Brands, which specializes in water- and fire-damage restoration, says companies in the field are facing growing technological requirements. Mobile reporting tools that measure equipment use and services deployed in recovery efforts, for example, would find an eager client base. “We’re seeing increased demand—from the insurance community, in particular—for speedier information and [greater] integrity of information in restoration work,” says Burton.
But those who are looking to turn a quick profit on disaster, be warned: The field is increasingly ill suited to amateurs. Insurers can take many months to pay contractors. Experience in construction and contacts in the insurance business are often essential to get recovery contracts. And, as damage from disasters grows in scope, “the business requires infrastructure, logistics and management staff resources,” says Burton. “It begins to favour large organizations that are not tied to a specific area geographically and can respond to events in different parts of North America.”
In addition, entrepreneurs must invest in training and certification, which runs to about $4,000 for a water restoration technician. Both insurers and most provincial governments are strengthening the laws and certification requirements to weed out poorly trained opportunists. Dennis French, president of Edmonton’s DF Technical & Consulting Services, which provides environmental testing, predicts that “the handyman is slowly going to start to disappear” from the business.
If you acquire the needed expertise, climate change will likely provide plenty of work. But Burton cautions that dabbling can backfire. “I’ve seen a lot of restorers fail because they’re not appropriately outfitted ,” he says. “And they leave their primary market behind for months on end to chase the work being done in a disaster, at the cost of local market share.”
This story is part of PROFIT’s 2014 Opportunity Guide, full of trends, ideas and markets you can jump on right now