by Nick Gromicko
Over the past 30 years, I've had the pleasure of meeting and talking with thousands of inspectors. Whenever I discovered that an inspector did really well financially from doing inspections, I always tried to debrief them to learn how they succeeded. Eventually, I noticed that although there were dozens of different ways that inspectors made a small fortune, there were four paths that were the most common. I'll discuss each of them here.
1. The Multi-Inspector Firm Owner Path
What do most billionaires like Jeff Bezos, Bill Gates, and Larry Ellison all have in common? The employ a lot of people.
Remember when you were back in grade school? You first learned how to add. Later, you learned how to multiply. The difference between a one-person home inspection company and a multi-inspection firm is simply the difference between addition and multiplication. A single home inspector earns income for the work he/she does with their own two hands. He or she performs an inspection and gets paid. On the other hand, when you are a multi-inspector firm owner, you make money from every hand working in the company. The salary you pay your employees is a portion of the value they add to your company. The other portion goes to you, the owner. The more employees you have, the more money you make. Your profits can endlessly multiply.
For more information on how to grow your inspection company, read SCALE UP: 100+ Ways to Systemize and Grow Your Multi-Inspector Firm. It's a free download.
2. The Ancillary Inspection Up-Seller Path
There are five reasons to offer ancillary (additional) inspection services:
- Obviously, offering additional inspection services increases your gross revenue. I remember that just before I sold my home inspection company, the revenue we were generating from ancillary inspections surpassed that from general home inspections alone.
- Offering additional inspection services also increases your net revenue. You've already suffered the marketing costs, sales costs, and travel costs (in both directions) for the general home inspection you're performing for the client. While you're already on site, you might as well try to perform additional work.
- Offering additional inspection services shows that you are a well-rounded professional in the inspection industry. Your client may not want every ancillary inspection service you offer, but merely offering many types of inspections demonstrates your mastery of the profession.
- Offering additional inspection services may cause some real estate agents to favor you. Some real estate agents want to schedule with a one-stop shop. Their time is money, and having to schedule and arrange home access with numerous inspectors takes more time than working with one inspector who does it all.
- And, finally, the more inspections you offer, the more efficient you can become. For example, your radon testing equipment has to be both placed and then later retrieved. You can do this before, after, during, or between your other inspections, forcing you to schedule this work in a geographically efficient manner.
So, when should you offer these ancillary services? There are seven best times to offer ancillary inspection services (at points within your series of contacts with your clients):
- In your marketing pieces and on your website. One of the best ways to do this is by offering inspection packages that include the most popular inspections in your local market.
- When someone schedules an inspection. Once you book a home inspection on the calendar for a consumer, ask them if they are interested in having you perform any other inspection services you offer. Often, the consumer intends to order these inspections anyway and isn't aware that you perform them. This is typically called the "point of sale" or "point of purchase" opportunity. It is akin to placing magazines and chewing gum at the checkout line at the grocery store. It's not what you came to the grocery store for, but you often add it to your shopping cart.
- After your pre-inspection agreement is signed online. InterNACHI has a free online agreement system that allows your client to read and sign your inspection agreement digitally via email. At that point, you can email your client information about the ancillary inspections you offer.
- On-site, during the inspection. This is especially true if you notice something during the home inspection. For example, if you see an old radon mitigation system that isn't running, you may want to suggest that your client hire you to do a radon test. Or, if you find some mold, you may want to suggest that your client hire you to do a mold test. My favorite soft-pedal approach to up-sell ancillary inspections is to hand your client an iPad with a "While I'm Here" video on it to watch during your inspection.
- Within your inspection report. The final page of your inspection report should contain offers such as additional inspection services you provide. You may want to suggest that your client hire you to oversee any construction or remodeling projects they are having done to the home. More information about oversight inspections can be found at www.OverSeeIt.com.
- After you send the inspection report to your client. You may then want to suggest that they hire you to perform a Move-In Certified® Seller's Inspection on the house they are selling. You can find out more about Move-In Certified® Inspections at www.MoveInCertified.com.
- When you market to your past clients. Of course you should get your former clients to sell additional inspections for you. But you should also use those opportunities to get ask your former clients to buy additional inspection services from you. You may want to suggest they hire you to do an Annual Home Maintenance Inspection in the fall.
What are the most profitable ancillary inspections to offer? The two most profitable ancillary inspection services are mold testing and sewer scope inspections. More information about testing for mold at PRO-LAB. Go here for information about offering sewer scope inspections.
If you are trying to grow your business, work regularly on becoming qualified to offer more and more ancillary inspections, incorporate them into the services your inspection company already offers, and make those offers at various points within the series of contacts you have with your clients.
InterNACHI® offers 65 different inspection certifications.
3. The Master Inspector Path
Be the best of the best. Charge the most. Leave the rest. Another way to put it is to take the gravy jobs and leave the potatoes.
This system is most often used by single operators who focus on their margins. It's not easy. You have to not only present yourself to your market as an inspector who is all alone in his/her class, but also charges a lot to make it believable. Your marketing can't make the assertion that you are the best inspector in town and then have a cheap fee structure that conflicts with that assertion.
Watch how this Certified Master Inspector® used one PIC to double his business.
So, what good is being a Certified Master Inspector®? Provided a consumer finds you at all, it improves the odds that they’ll contact you. It improves the odds that they’ll consider you. It improves the odds that they’ll ultimately hire you. And it improves your ability to charge a little more. I know – that doesn’t seem like much of an effect, and certainly not enough to make a home inspector rich. But let’s do a little math using dollars this time.
I’ll intentionally use round numbers to allow you, the reader, to change them as you like. Let’s say your gross revenue is $100K a year. And let’s say that touting your Certified Master Inspector® professional designation causes the number of consumers who contact you to increase by 5%. And let’s say that it causes the number of those consumers who ultimately hire you to increase by 15%. And let’s say that it allows you to command higher fees by 10%. I’m using very conservative increases, and applying them to only three factors. So, what effect do these modest increases have on your total gross revenue? Let’s find out: $100,000 x 1.05 x 1.15 x 1.1 = $132,825. That’s an increase of $32,825 in just the first year. Over a 15-year inspection career, even without any further growth ever again, the increased revenue would add up to $492,375, or nearly half a million dollars above and beyond what you’d bring in otherwise.
I used very modest increases in those percentages. In reality, it’s likely that the increases would be more like 20%, 25%, and 15% respectively. So, how much extra money would you earn over my hypothetical 15-year inspection career now? Let’s do a little more math and find out. $100,000 x 1.2 x 1.25 x 1.15 = $172,500. That’s an increase of $72,500 in just the first year. Over a 15-year inspection career, even without any further growth ever again, the increased revenue of being a Certified Master Inspector® would add up to $1,087,500. Subtract from that the $1,000 one-time, lifetime CMI® fee and you net an additional $1,086,500. That’s more than a million extra dollars!
Here are some links that will help you along this path:
For more information on how to make more money as a home inspector, read STACKS: A Home Inspector's Guide to Increasing Gross Revenue. It's a free download.
4. The CCPIA Commercial Inspector Path
When I speak at inspection events, I sometimes ask the crowd if anyone is willing to tell us all what their average home inspection fee is. The answers they give all have one word in common: "hundred." But when I ask this at a CCPIA meeting, the common word is "thousand."
Watch these testimonials from actual inspectors who charge many thousands of dollars per inspection:
Commercial property inspections are more profitable than home inspections for numerous reasons:
- Commercial property inspections command higher fees.
A commercial property inspector generally makes thousands of dollars per commercial inspection, instead of hundreds of dollars for a home inspection.
- A commercial property buyer is less emotional about the property. It's a business decision for them. They aren't moving themselves and their family into the building, so it's a less emotionally fraught situation, in general.
- Commercial property inspectors have fewer competitors. Because it requires a different skill set and management acumen, not all home inspectors who also offer commercial inspections can compete successfully.
- It's easier to market to commercial property real estate professionals because commercial property brokers generally specialize in commercial real estate.
- And lastly, a commercial property inspection business is not really an inspection business at all. It's a management business. After determining what your client wants and their risk tolerance, you and your client will draw up a scope of work agreement for what you'll inspect. Then, you must hire experts who'll perform their specific part of the inspection. This may mean that you'll send in an electrician, a commercial HVAC contractor, and a commercial roofer. You'll then compile their reports along with the information you've gathered to produce the final report for your client. You can almost run your commercial inspection company without ever doing any actual inspecting yourself. Again, you won't be so much an inspector as you will be a manager. You can run your commercial inspection company from a desk and a chair, late into life, making more money, for more years.
Join CCPIA today.
Synergy is a miracle. So you may want to combine two or more of these paths to achieve your financial goals.
And finally, store the wealth you amass. Read Wealth Storage for Home Inspectors.