While the current COVID real estate market is not following typical patterns, the National Association of Realtors ® is projecting the number of housing transactions (both existing and new) will remain solid, if not increasing in 2021. Despite record low inventories, a flood of new home inspectors into the industry, real estate agents working from home, very tight contingency periods and other factors, many home inspection companies are booked solid for weeks, having to turn away business. Are you one of them? If so, great, hire more inspectors!
If not, why not?
There could be many different reasons why agents and clients are not calling (or texting, or emailing, or ordering online…), and the reasons tend to be different depending on if you are an established inspector vs. one just starting out.
Beginning with established inspectors, we will look at several of the typical reasons behind inspection companies not being busy as the market activity is increasing.
YOU ARE AN ESTABLISHED COMPANY.
So, you’ve been around a while, and you are not busy. The question to ask: Is it your market or you? Are you talking with your peers to see how they are doing? Are you staying close to the current market conditions? If everyone is slow, keep marketing!
If you see that your peers are staying busy or having record years (which many are!), it could be you… The “you” aspect again could be a variety of things, the important thing is to figure it out and decide if you want to do anything about it. So how do you figure it out?
- Ask your top trusted agents that are still using you if they would provide you honest feedback. Let them know that business is down and that you are trying to understand how you can get back into growth mode.
- Reach out to agents that have stopped using you and ask why they have stopped. Do not call those where you may know the reason why, but if there are some where you are not aware of any issues, ask.
- In all cases, approach it with an honest effort, expecting to hear things you probably do not want to hear, and don’t get defensive. Thank them for their feedback no matter how hard, wrong, or bad it is, and if you are willing, let them know that you want to earn back their business and solicit how you can do it. It is not an easy thing to do, but critical if you discover you have a negative reputation within the agent community for whatever reason, deserved or not.
- Take a step back and look at your marketing efforts – have you been content while your competitors have not been complacent? Are you “out of sight, out of mind?”
- Think on your customer’s overall experience, from the initial call from the agent or client to the post-inspection contact. Are you and your company focusing on delighting your customer throughout the entire experience? Is it easy to book an inspection? Are they always getting your best? Are you giving the perception that every customer is the most important customer? Are there things you could be doing to improve the customer experience?
- Honestly assess your mindset. Do you hate having to be in Sales and Marketing? Are you tired of running your business and just want to inspect? Have you been ramping down as you are planning on retiring in a few years? Your mindset has the biggest impact on your business and your agents and clients will see it even if you don’t.
Hopefully the hard part is done, you’ve done your soul searching and have come up with an honest “why”. So, what do you do with it?
If your agents gave you feedback, it is important to understand that their perception is their reality. You need to make a conscious decision – are you willing to do what is necessary to attempt to change their perception? If yes, great! If not, continue reading.
Have you realized, for whatever reason, that you are tired of the business side of your business? The good news is that there are options, depending on the direction you want to take:
- Maybe it is time to sell, if you have something to sell. This is where pride can be a real stumbling block, and further honesty is often required. If you have not been doing many inspections, you don’t have much to sell, but your phone number might be worth something to a growing inspection company. Nobody will buy your company based on its potential if the potential was not realized. If you have a solid business, and are willing to help with transition, you have a good asset that you should be able to sell.
- Maybe it is time to consider simplifying your life and work for another inspection company. With your peers that you know, like and trust, talk to them about the possibility of you working for them. If you have a good reputation and have good experience you should be able to negotiate a very favorable arrangement. Will you be making as much money as you were in your business? Maybe, maybe not, but the biggest trap for folks making this transition is again looking at the potential, and not the reality, as well as looking at some of the other non-tangible benefits that will come of it. As an owner you might be pulling in 70%-80% on an inspection, and as an inspector 40%, but if your new company can keep you busy you may end up with an equivalent income (or more) with a lot fewer headaches and a higher quality of life!
- Maybe it is time to invest.
- Partner or hire in those areas you do not want to deal with. Often the biggest challenge here is “nobody can do it as well as I can.” Which may be true, but that is an excuse, as hundreds of highly successful inspection companies have successfully partnered and hired all of the different aspects of their business. Do not be your own limiting factor and try to find the right partner while trying to be a good partner yourself.
- Do not be afraid to ask your successful, growing peers about their partners. You may be surprised at how many are willing to share to help you be successful. Why? The smart inspection companies realize that if they have strong competitors out there it not only raises their level, but it is good for the industry as a whole. And if they are busy, they might kick some business your way for a referral fee.
- Find a good coaching team to help you refine your business goals, help identify the areas that you need to invest in, and most importantly, keep you accountable once you set your goals. While it can be difficult to share the details of your business with others, getting that honest feedback from those that want to see you successful can only help.
YOU ARE NEW TO THE INDUSTRY. WELCOME!
You have recently decided to start up a home inspection business. Congratulations! Did you realize, once you decided to become a small business owner, that your first role is to play Marketing and Sales? Many inspectors come into the industry wanting to become home inspectors, to show up at a home, perform the inspection, share their findings with the client, cash the check and call it a day. There is absolutely nothing wrong with that, but it will not grow a business. The home inspection industry is a relationship business, with most inspections coming from real estate agent referrals.
Have you built up your referral base? If not, go to open houses and introduce yourself. A recent non-qualitative survey of Keller Williams agents in a single market recorded one inspection company showing up at two open houses (out of over 30) in a one-month period. As open houses are typically performed by newer real estate agents it is an opportunity to get established with an agent who doesn’t already have their “go to” inspection company and give established agents a backup in case their current inspector is too busy. Go visit real estate offices to see if folks are coming back, as you might be surprised. Even if they are not, get to know the office managers, try to get in to do office presentations, figure out how to offer CE credits to agents – do what you need to do to establish those relationships.
Do you not know where to start as a business owner? The first easy step is to get tied into the industry associations and forums (InterNACHI, ASHI) and just make sure to ignore the cranky home inspectors that don’t like newbies – there are a lot of helpful inspectors out there that realize it is not a zero-sum game. Another step is to get professional industry coaching. There are several excellent organizations out there at different levels (Home Inspection Whisperer and iGo are two) that can help. As they have already been successful in the industry, they can help you avoid common start up mistakes IF you are receptive to change. If you do not like change, or just want to do inspections, skip down a few paragraphs.
How long have you been marketing your new business? Too often folks are hoping for immediate results, which rarely happens. It can take 6+ months to see the full fruits of your marketing investments, and typical new inspection companies can take 6-12 months just to break even. And once established, you do not want to stop marketing, else the next round of new companies will steal your mindshare.
Are you priced right? A common mistake for new inspection companies is not understanding their market and how their competitor’s price their services. This is not price fixing, but basic market analysis. Another common mistake is thinking “if I price it below everyone else the business will start rolling in!” Unfortunately, time has proven that approach to be a short-term focus that ends in failure – while you will get some business, good agents want the best quality, service and value for their customers and do not want the potential liability of the cheap inspector missing something major. The third common mistake is not providing a similar level of services as your competitors. Key note here, you do not have to do it all yourself, as often there are others (pest companies, radon mitigation companies for radon gas testing) that you can outsource to until you can bring those services (if you so desire) in-house. When starting out, put your pricing in the middle of the pack, and once you are established, do not be afraid to raise your prices (a topic for a future blog).
This started off with a simple question of “it’s getting busy, are you?” and the reality is that there is not a single magical solution, as the underlying reasons as to why you are not busy are varied. Though in all cases, it starts with you understanding what your goals for your business are, doing an honest assessment of where your business is relative to your goals, then deciding to do something about it. There are a tremendous number of resources out there to help strengthen and grow your business if you want to engage them as well as existing inspection companies who are looking to grow who would value an experienced, capable inspector. In all cases try not to let your pride get in the way of helping you find the right path, wherever it could take you.