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Southern California Entrepreneurs

Ensuring Survival of a Seasonal Business

Independent claims appraiser finds that marketing, factoring keep the cash flow steady.

July 28, 1999

Torrance native Jeff Westergard, 35, worked in an auto body shop and then as an independent appraiser for a firm that large insurance companies hire to estimate damage to cars and trucks involved in accidents or losses. When he got married, he and his wife, Valerie, moved to Texas, where they ran their own independent appraisal firm for seven years. Two years ago, they returned to Southern California to open West Coast Claims Service. Because of the seasonal nature of the business, Westergard says, marketing is key to their success. He was interviewed by freelance writer Karen E. Klein.

Weather plays a big factor in how busy we are. Tax time also plays a factor. Same thing goes for Christmastime.

Here in Southern California, fall and winter are our busy times because rainstorms bring up oil on the pavement and there are a lot more car crashes. During the spring and summer, we devote a lot of time to marketing. If you don't have enough claims volume and customers to keep you alive in the slow times, that is how you can go out of business very quickly in this industry.

In order to keep up a steady volume of work all year, we are constantly marketing ourselves.

Our field appraisers are independent contractors, and we have to pay the good ones a high percentage to get them to come work for our company. I also have to keep them busy or they'll go out and work for somebody else that is busy.

My wife, Valerie, is our marketing expert. She has a 12-page brochure she sends out to all the insurance companies that are licensed in our coverage area. We find out who is in charge of hiring independent appraisers and send them a marketing package with a follow-up phone call to see if they use independent appraisal companies. If they do, we try to get a meeting and have them sign up with us.

During the slow months, we also use a factor for our invoices. That increases our cash flow volume by 70%. It's almost like taking out a loan to cover your invoices and then paying a percentage back to the bill collector. We pay a fee of 4% to 5%.

The factoring company helps me cover my commissions to my independent contractors. Otherwise they would have to wait for their fees until the insurance companies settle their claims, which can take a while. The higher the cash flow volume, the faster I can pay my people and the more I can devote to my marketing, which brings in more business.

Right now, our territory is California, but we've got expansion plans to move into Arizona and Nevada. We're also moving from our home office into an 850-square-foot office space and hoping to have a catastrophe team available to go nationwide depending on wherever there's a natural disaster.

*

If your business can provide a lesson to other entrepreneurs, contact Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016 or at kklein6349@aol.com. Include your name, address and telephone number.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

At a Glance

Company: West Coast Claims Service

Owner: Jeff Westergard

Nature of business: Independent insurance claims appraisals

Address: P.O. Box 1974, Lomita, CA 90717

Web site: http://home.pacbell.net/jefwes/index.html

E-mail address: jefwes@pacbell.net

Founded: 1997

Employees: Eight independent contractors

Annual revenue: $70,000

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