Air Date: 10-12-2018|Episode 520
Rusty Amarante is a Certified Restorer and Director of Operations for BELFOR Property Restoration the global leader in disaster recovery. He is also President of the BELFOR Franchise Group a leading national franchisor of service brands including 1-800-WATER DAMAGE, DUCTZ International and HOODZ International.
Rusty’s career started in the 1970’s in suburban Philadelphia, PA and has ranged from the owner of a small cleaning and restoration company that grew to a large regional full service restoration contractor before joining the BELFOR Team in the 1990’s. Over the past forty plus years he has been an IICRC instructor, state approved CEC trainer for the insurance industry and avid contributor and volunteer to the industry’s not-for-profit sector.
Full Description:
Rusty Amarante is a Certified Restorer and Director of Operations for BELFOR Property Restoration the global leader in disaster recovery. He is also President of the BELFOR Franchise Group a leading national franchisor of service brands including 1-800-WATER DAMAGE, DUCTZ International and HOODZ International.
Rusty’s career started in the 1970’s in suburban Philadelphia, PA and has ranged from the owner of a small cleaning and restoration company that grew to a large regional full service restoration contractor before joining the BELFOR Team in the 1990’s. Over the past forty plus years he has been an IICRC instructor, state approved CEC trainer for the insurance industry and avid contributor and volunteer to the industry’s not-for-profit sector.
Rusty’s accomplishments and service include chairing RIA’s Restoration Council and ascending to the Restoration Industry Association’s Presidency in 2008. Rusty also has served on the IICRC FRST Technical Advisory Committee (TAC) and served as Vice Chair for the Institute’s S500 Water Damage Restoration Standard. In 2006 Rusty received RIA’s most prestigious honor when he received the Martin L. King Award.
From his early day’s in the 20th century to his global responsibilities of the last two decades with BELFOR, Rusty has been a tireless advocate for the professionalization of the industry. This week his good friend and colleague Cliff Zlotnik, the Z-man will have a “Fireside Chat” to talk about Rusty’s career, his relationship with the late Marty King and his insights into the future of the restoration industry.
Joining IAQradio this week for a seat by the “fire” is IAQradio’s Global Watchdog and Rusty’s longtime friend and RIA Industry Adviser Pete Consigli. Radio Joe Hughes asks all his IAQradio friends and loyal listeners join the show live this Friday for a very special interview with industry Icon Rusty Amarante and friends!
Z-Man’s Blog:
“RUSTY III, Yo Sheldon”
Rusty Amarante’s career started in the 1970s in suburban Philadelphia and has ranged from ownership of a small cleaning company that grew to a large regional full-service restoration contractor before joining the Belfor team in the 1990s. He serves as Belfor’s director of operations and is President of the Belfor Franchise Group.
Nuggets mined from today’s episode:
As a kid what did you think you were going to be when you grew up?
Rusty inherited entrepreneurial DNA from his parents who owned a grocery store and a gas station. He knew he would own his own business.
How did you land in the cleaning business?
As a 21 year old, who had finished a year of junior college, he took a part time job working in a cleaning business. After completing cleanup of a fuel oil burner “puff back” in a residence he peaked at the invoice for the service, did the math and decided to partner with his boss in purchasing a cleaning and restoration franchise.
Marty King was an influencer in your restoration career, what are the most important lessons that you learned from Marty?
At a time when it was hard to describe to the general population what restoration and damage repair was, Marty gave Rusty pride in being a restorer. Rusty is proud Certified Restorer# 50 and takes pride in being part of a “real business in a real industry”.
When and why did you begin your industry volunteer work?
Rusty’s industry volunteerism began when given an opportunity to speak at a TRSCA (Tri-State Restorers and Specialty Cleaners Association) convention. The audience reacted well to his message and wanted to talk to him afterwards. He was hooked. Through his volunteer service involvement first with TRSCA and then with RIA he built great personal relationships with smart, passionate people who were open to sharing.
When and why did you become an industry instructor?
When he was asked to do more speaking at TRSCA and other industry events he decided to buckle down and focus. His technical knowledge and presentation skills improved. The speaking engagements led to his pursuing IICRC instructor status where he co-taught the IICRC fire restoration course with his buddy Rick Love.
They had a mobile room they would ship to host locations for use in hands-on training exercises. Host hotels were not happy when the mobile room was smoke damaged while in the hotel’s ballroom.
Rusty went on to teach numerous state approved CEC courses for insurance agents and adjusters. He also had the privilege of co-teaching a CR course with Marty King.
What pre-Belfor accomplishment are you most proud?
Building an amazing staff of dedicated and loyal employees in my service business who could “out-do and out-perform” the competition. The sale to InRecon (now known as Belfor) provided tremendous opportunity for upward mobility for the staff.
What’s the funniest thing that ever happened on a restoration project?
Every restoration company has horror story tales of being abused by insurance adjusters and clients.
This outcome is a little different.
A Fortune 10 company in the NYC Metro area suffered a smoke loss. Rusty’s company teamed-up with other contractors to complete the project quickly over a weekend. A young and very attractive Italian lady was the facility manager. With her crew of union contractors, she impeccably ran the facility. Based upon positive prior experience, the facility manager trusted the restoration contractors and the relationship between the contractors and facility manager was strong.
The CEO helicoptered to work daily and needed to walk through a hallway to get to his office. The ceiling tile in the hallway was smoke damaged. The facility manager didn’t want the CEO to see the smoke damage. The necessary replacement ceiling tiles were not available locally. The cost for FedEx shipping of the replacement ceiling tiles from the factory would be $50K. When the general adjuster on the claim balked at the cost, the facility manager told him: “you’ll pay for, what I tell you to pay for”. When the union contractor hired to install the tiles told the facility manager that the work couldn’t be done on a weekend, she got in his face and told him in no uncertain terms that “you will do it”. Finally, the general adjuster threw up his hands and told the facility manager that the contractors were doing a great job and that he would be sending a check to pay for everything. This incident demonstrates the importance and value of developing good client relationships that will stand up for vendors during contentious times during the claims handling process.
As an owner of a restoration business did you ever suffer burnout from business stresses? If so, how did you cope with it?
I coped with it better than my first wife did. It wasn’t physical burnout; I could and would always respond to the service call. The challenge was having enough capital to finance the projects. I would have a healthy balance statement showing a profit and with money in the bank. Taking care of employees and vendors during the peaks and valleys takes a toll.
How did you know it was time to exit? What were the deciding factors upon which you decided to sell your service business?
Expanding the business would require more risk: the opening of more offices and a need for much more capital. You need to be careful when gambling with someone else’s money. I decided to sell the business to InRecon. Sheldon Yellen was very familiar with the business challenges and also shared my vision. Selling the business provided great upward mobility opportunity for my staff, many of whom either still work at or have retired from Belfor.
Any unpleasant or unexpected surprise after the sale?
Rusty experienced seller’s remorse about a month after the sale. With no boss breathing down his back he quickly got into the flow.
From our vantage point, it appears that you have much greater responsibility and authority now than ever before. Did you know that you had the necessary skills to fill this role? What prepared you for this?
My company was much smaller than the office is now. Belfor has 7,000 employees. Belfor is a big business made up of small businesses. Going into day-to-day operations wasn’t a big change. I’ve been fortunate to grow with the company. I’ve had the opportunity to learn technical skills by attending industry events. Shelden Yellen is a unique guy. He has a basic and fundamental method for running the business. Sheldon is the head coach, the restoration business is not about trying to be a superstar, and it’s all about the simple things, the daily blocking and tackling.
Since joining Belfor in a senior management role have your opinions on the insurance damage repair and restoration industry changed?
Not very much. Gaining respect of the insurance industry still remains a challenge. Billing and our entitlement to make a profit are also a challenge. TPAs are a new dynamic, good TPAs help the industry and bad TPAs hurt the industry. It costs more money to respond speedily and deliver high quality work than it does to deliver lower quality work. When TPAs beat down the price they inevitably adversely impact client satisfaction.
I’m concerned about consultants. I opine that consultants ruined the mold remediation business. Consultants drove insurance companies to exclude or limit coverage for mold. I’ve seen mold remediation estimates exceed the value of the property. I rarely need a consultant. They typically get in the way, slow down the project, create problems and drive up the costs.
Today restoration firms must be technically savvy especially on CAT losses. Rusty opines that restorer’s who are confident in the fact that they are the best restorer in their marketplace, whose high quality work speaks for itself and who feel that they don’t need to seriously embrace communication technology will be put out of business by less qualified firms who jump on new technology. Sheldon Yellen who has a flip phone and who isn’t technically savvy relies upon his memory and technically savvy people surrounding him.
How has your experience as an instructor influenced Belfor’s training?
Sheldon Yellen wants the best players. I told him what it would take and cost financially. Sheldon was willing to make the investment. Belfor has 6 fulltime trainers who aren’t just the best within Belfor; they are the best in the industry in my opinion!
Carpenters, electricians and plumbers, come to a job with skills and tools. Service techs don’t come already assembled, they need to be built. They need to first have the right attitude and then learn the tools of the trade.
Some employees have been happy doing demo work for 25 years and don’t want to do anything else. Others aspire to learn new skills.
Why is Belfor franchising?
Belfor wasn’t planning to franchise. Following Hurricane Katrina, Belfor subcontracted a considerable amount of duct cleaning work to the DUCTZ franchise network. That experience resulted in Belfor’s acquisition of DUCTZ. Belfor then started HOODZ which is now the nation’s largest kitchen exhaust system group cleaning over 1,000 systems per night. Belfor acquired 1-800-WaterDamage and its 26 franchisees. 1-800-WaterDamage was disassembled and rebuilt and now has 92 franchises in place. Rusty predicts they’ll reach 100 franchises by year end.
While a few Belfor employees who aspired to own their own businesses have purchased franchises, the majority of the franchises were purchased by outsiders.
As a former franchisee, does this better prepare you to be a franchisor?
As a franchisee he is keenly aware of what franchisor assistance he needed and what would have helped him the most. Having been on the other side of the business relationship, he’s aware of what should be given and received. Belfor provides franchises with a proven plan to follow. Their stats have proven that those who follow Belfor’s plan succeed and those who don’t follow the plan are likely to fail. Belfor has the financial resources to assist franchises in financing their projects. Belfor franchises with the backing of Belfor corporate can take on any size loss. The Belfor brand has horsepower and clout. The Belfor call center handles all hurricane related calls and fills-in for franchises when they are too busy to handle calls. Belfor has a deep bench of talent and can back fill talent when and where needed.
What is the single most important thing you think the industry should do that will impact its future and to help preserve and grow the profession of damage repair for the next generation?
Know that we are in a real profession and Knowing that it’s OK to say NO!
Global watchdog:
Pete Consigli echoes Rusty’s comments about too many consultants.
Question from Pete: What about TPAs using 22 year old kids’ reading out of a playbook to manage experienced contractors?
Rusty’s answer: TPAs never ran a restoration company and are unfamiliar with the costs. Good and experienced TPAs appreciate restoration contractors and understand the need to have quality contractors deliver quality work product. With pricing constraints bad TPAs force contractors to provide lower level of service.
Pete asked Rusty if Marty would be proud of where the industry has come from its early roots to today’s present marketplace.
Rusty said, he thought Marty would be very proud.
Did Pete dodge a question? He never answered the question of how Pete thought Rusty did in his 1 year term as RIA president. In fact Rusty’s tenure was the last 1 year term the association has seen in the last decade!
In the not-for-profit sector Presidents don’t get credit for what they start, they get credit for what they finish…projects started by their predecessors. Association President’s must rely on their successors to finish initiatives started on their watch. Pete and Rusty have more to discuss about this.
Rusty’s roundup comments:
Volunteering at RIA he received way more than he put into it. He highly recommends volunteerism for the right reasons when the volunteer is genuine, serious and prepared to do the work. He discourages volunteerism for the wrong reasons: to pad a resume, for selfish financial reasons or to ride on the coattails of others.
PIRC (Property Insurance and Restoration Conference) has the best intentions of a lot of people. People need to contribute the heavy lifting needed. PIRC is the engine in the vehicle, it needs people to drive, steer and make sure that the vehicle isn’t parked on the side of the road.
Auto body shops that get the big picture can be amazingly profitable. The jury may still be out on the property restoration industry sector of insurance repair.
For more info on the PIRC visit: http://www.gotopirc.com
For more information on BELFOR: https://www.belfor.com/en/us
Rusty’s final word
Rusty was flattered to be on the show.
Z-Man’s final words:
IAQradio was flattered to have Rusty Amarante as a guest.
Both Sheldon Yellen and Pete Consigli use flip phones. The global watchdog, a self-proclaimed “old school” guy is rumored to be looking into a smart phone in 2019 now that the kinks have been worked out.
Z-Man signing off
Trivia Question:
How many Category 5 storms have ever hit the continental US?
Answer:
3
Patti Harman
