While working on another project I began to think about a comment a friend made about changing my fee structure to get more work.
I made up three spreadsheets (NONE ARE MY EXPENSES OR MY FEES) however I think they are somewhat representative of what most would consider “reasonable” fees and expenses.
I then “highlighted” in yellow how many inspections a person would have to do more or less when fees or expenses were raised and or lowered.
There are three work sheets to the file I created. Titled Hours Worked, Expenses and Profit Impact.
I found it quite interesting and thought others would too.
In real time you can see what happens when you change expenses, change inspection volume and the impact of pricing on profit using this estimator in Excel . You may fall in love with the Excel version. You will see how all of your own numbers change the total and how different factors change your ability to earn a living.
Once again (NONE ARE MY EXPENSES OR MY FEES) everyone can put in what they think is reasonable for the area they live in and see if you can find any errors in the programing that should be corrected.
The sheet shows (as a concept) one can do 200 inspections for $613 (home and radon) working 41.7 hours a week and earning $50,015 or $23.06 an hour. OR one can do 400 inspections for $389 working 67.8 hours a week and earn a little more $50,089 or $15.07 an hour.
I find it interesting that lowering or raising fees (I am NOT advocating either) or per inspection expenses by just a few dollars can make quite a difference at the end of the year.
This post is not an opinion it is showing a series of calculations for the end user to use in anyway they wish to do so.
Lowering fees will not increase the number of inspections by any significant amount unless you’re overpriced to begin with, and if you’re winning over every price shopper you’re obviously too cheap.
Discounting all of your inspections for the sake of a few extra isn’t too bright…Discounting one inspection to win over a price shopper is a wiser option and doesn’t require a spreadsheet or a fee structure reduction
Fees… it comes down to call volume. You guys are forgetting one more thing. How much are you spending on marketing to get the call volume to attract potential clients???
My fees are middle of the road…not the highest, not the lowest. I like to have a “steady” stream of income. When business is pumping and I am ahead, I INCREASE my PRICES, when business is slower… I will come down a little in price.
If its an inspection in a GALAXY FAR FAR AWAY, I quote an “astronomical” price for my time on the road… Hoping the potential client says no… and sometimes I am surprised to get an “okay”…
Remember Time is also on your side… You should always ask…“How soon do you need the inspection?” Time is money, and if they need you badly, they are willing to pay you for your prompt service.
Just my thoughts… and yes, if I could charge $500 for every average 1,500 square foot home. I would. But 90% of people out here in California are not going to pay that… especially if an agent is calling for a buyer. I do feel that my service is worth this price, but I have to put my feet back on earth.
Amen. Work is work. I don’t want to lower my prices, but I also don’t want to find another line of work. Convincing price shoppers you’re worth more is difficult.
Has anyone ever figured out how much more money you will make by lowering your fees. It usually comes out to nothing, because now you have to do more to make the same money, not to mention the added liability you open yourself up to. The best thing I ever did was increase my prices. You develop a whole new clientele and get rid of the tire kickers. After two or three years pricing really shouldnt matter. My whoe business now is word of mouth and referals. I have never ever put a buinsess card in a realtors office.
I am interested in obtaining a ball park idea of the fee I should charge for code inspections, bank draft inspections, and monitoring a project inspection. I am now a home inspector. I was a code inspector for cities for 25 years. I have started this new business and I do not want to under or over charged my clients. Can you offer a suggestions?
Thank you
I’ve been a code inspector, too, and you do not want to perform a code inspection as a home inspector so do not advertise or charge for one. Instead, clearly communicate to your clients that your report is NOT a code inspection and ensure that they understand that before you agree to provide a report to them.
Agent gave client 3 names - she called all of them - then told me my price was $100 above the others - I told her you get what you pay for - I got the job. After the job she was thrilled and said “You are right, I got what I paid for. Thanks!”
