April 16, 2003. Inspector tries to boost profits by offering radon testing. by Nick Gromicko
I want to increase my profits by offering radon gas testing along with my home inspection service. What can I do to ensure profitability?
If increasing profits is your motivation for offering radon testing along with your home inspections, you may want to reconsider. Contrary to popular industry belief, adding radon testing as an ancillary service to your regular home inspection service adds little to your bottom line. Most inspectors do not properly calculate and analyze their business costs. Radon is by far the least profitable of all ancillary inspections. Hidden costs are the reason. Let's expose these costs:
1. Radon testing requires you to place testing equipment or kits in the home then come back on another day to retrieve them. Radon tests require two trips and so your time and travel costs are high.
2. Access to the home is often difficult or denied and extra trips have to be made because of dogs, the lock box being removed, or the owner not home.
3. Radon test kits have to be analyzed by a laboratory which charges for analysis.
4. You must drive or ship (often overnight) the radon kits to the laboratory, suffering shipping costs.
5. In some states radon testing certification or licensing is required:
a. States charge fees for this certification.
b. There are usually required exams which have fees associated with them.
c. There are usually continuing education requirements which have fees too.
6. Quality control and assurance plans often require a certain percentage of tests to be:
a. Blanks or unexposed tests.
b. Duplicates or side by side measurements.
c. Spikes or tests exposed to a known radon level.
All these extra quality control measurements add time, laboratory, and shipping costs and spiked samples require you to pay radon chamber fees.
7. Because radon reports often come in after your home inspection report is delivered, there are extra costs in faxing or mailing the radon reports to your client and real estate agents.
8. Radon tests often have to be redone or repeated for various reasons.
Guess who is expected to pay for retesting?
9. Using continuous monitors or electrets requires equipment purchase costs.
10. Long term liability for radon testing is likely higher than most other inspections because radon gas is believed to reduce one's life expectancy (cause death).
Tips for increasing profits on radon testing:
1. Make sure everyone knows you offer radon testing. Many home buyers will order radon testing if you let them know you offer it. Most real estate agents prefer one-stop-shopping. Spreading your costs out is smart. The more radon tests you perform, the less expensive they are per test.
2. Cut costs by placing or preferably retrieving the radon tests on the same trip as the home inspection.
3. Preferably pre-place radon tests and then pick them up during the inspection. The cost to you is the same but your clients acquire added value by receiving their results faster.
4. Join your local Board of REALTORs as an affiliate or associate member so that you can be entitled to lock box access. This allows easier placement and retrieval of radon tests. Note: InterNACHI can acquire affiliate membership for you if you are having trouble getting a lock box.
5. Try to schedule placement and retrieval of radon tests in conjunction with other radon tests and home inspections in order to minimize travel costs.
6. Push radon testing in your local market. Do not push radon testing on far away home inspections. Take the gravy.
7. Do not use overnight shipping on Fridays. Most laboratories won't analyze until Monday anyway so use 2-day air on Fridays to cut shipping costs.
8. Get bulk discounts by purchasing your kits together with other local InterNACHI inspectors.
9. Get together with other local InterNACHI inspectors to ship your radon kits to the laboratory thus sharing shipping costs.
10. Consider subbing-out your radon testing so you can still offer radon testing but with less headaches and costs.
11. Use the InterNACHI Agreement (between you and your client) to help prevent radon-related lawsuits.
12. Charge more.
Offering ancillary inspections to your home inspection business is a great way to increase profits but perhaps consider these more profitable add-on services: www.nachi.org/ancillary.htm