It's a great day here in Orem, Utah! It seems the summer season has started a little early this year. The business is doing the whirlwind, summer business and the temperature is much hotter than normal. My air conditioner doesn't work (happens every year, must be a slow leak) and I keep sweating my way from inspection to inspection. There just hasn't been time to take my minivan in and get it serviced. I definitely need to make time because when you come from a hot attic or crawl space, you need some fresh, cool air to revive you between inspections.
As I get older and older, the years just seem to fly by. It's unbelievable to me that another school year is almost over and that summer is already breathing down my neck. Saturday night was a dance recital for my two girls and we enjoyed watching them perform two dance numbers each in beautiful costumes. Soccer season just ended and baseball season is just beginning. Every night this week was filled with some type of family/church/work obligation. Chorus recital, meetings, volunteer work, etc. Add to this the heavy inspection schedule and today I am really dragging. I'm not complaining...I'm grateful for my family and all the extracurricular activities that they enjoy.
How do you balance your work and your family activities? I don't want to miss the family stuff, but when I get home from inspecting and immediately race to an activity, it makes for long, weary nights and not enough sleep. Any helpful tips?
Your Name:City: State:
Please include your name or else I don't know who it is from.
It's easy to be successful when the demand overwhelms the supply. We all are buried with work right now because the economy is good and the effects of population explosion are becoming a factor. As more people become inspectors and the demand levels out, we will see a slowdown, I'm sure. Or if for some reason the interest rate takes a hike, we could be flippin burgers at Mac's. But for now it is great! I just do what I can do (10-12 fulls a wk.), a few dry rot/ termite inspections, and the normal re-inspections. I am up doing office work at 4:00 AM. and I am in the office untill 9:00 PM. That makes a very long day. I am not doing as well as you, Michael, as far as revenue, but I don't offer as many services as you provide (radon, etc.). At 52 yrs old, I have enough to do. The thing I don't like is the lack of fun time with family and friends, and the time just races by. Before I know it, I'll be 106 yrs.old and wondering where it all went! Oh well! I do remember the times in the 80's when there was one job in town and thirty five contractors looking for work. Those were very tough times. I just thank GOD and my good health that I am able to do what I do. Now if I can just figure out how to capture some of the money I am producing, it would be great. PS. We are praying for Shelly's recovery. Reggie Ayres- OR , Medford
You need to get more competition in the area. Then you will not be able to charge as much for your services. You will not then be so successful! Tom Walther - Vista, CA
Tom: Be sure and read the next story entitled, "Poodle Grooming." It may give you a different perspective as far as fees and competition. I wish I did have some more qualified competition. I do have people who think they are my competition. But I wouldn't refer my worst enemy to them. There are also other inspectors getting plenty of work. The demand exceeds the supply in that there is enough work for 5 more of myself in my own county. There are 20 more Inspectors here, but they all have to stop so much to sharpen their pencils that those clients who want a great inspection come to me.
I am not up to that level yet and, in my area, that level may not be achieved. My level is higher than last year at this time, so I am pleased. I am still striving for efficiency in the use of the laptop on the job. In short, I have not even thought about that high of a level of inspections...yet. It has always impressed me how you, Brent and other high level inspectors, achieve being as busy as that. Have a good day and please give my regards to Shelly. We miss the words she offered from time to time. Jim Corbin - Bow, WA
Mike: Acting in my capacity as a CIH (Certified Industrial Hygienist) helping out lead abatement and asbestos abatement Contractors, I frequently stand in for the principle onsite environmental contractor as an independent consultant and take air and soil samples, keep records of who worked (Tyvek suits, PAPR's, wet scraping only, proper isolation and log in procedures, chain of custody records, etc., etc.). I fell in with a small group that has a million plus contract at Nellis AFB here in Las Vegas. Their needs were for an EPA (state of NV) Certified Risk Assessor who was also a CIH, and has an XRF available. My fees are a thousand a day and extra for narrative write-ups. The one thing I have not mentioned is the many years it took me to become credentialed (I failed the 2-day exam 4 times and my wife almost divorced me twice!), and the cash money I had to lay out ($12,000) for the XRF machine. I only do 4 or 5 home inspections a week, but I decided early on to keep my yellow pages ad small and I have never sent out fliers, deciding early on to let my inspections and their reports speak for themselves. In this way, I keep my expenses down in the home inspection area - unlike my high overhead in the environmental end of my business. Too many inspectors talk about their gross income instead of their net income and I found myself wondering how much of your $4500 week you were able to pocket? By the way, I do have weeks where I make considerably more than $4500. I sure wish it was all profit!!!!! (My Cadmium 109 source has to be replaced soon at a cost of about 4k - and they only last about 2 years). Richard Grisham - Las Vegas, NV
First of all, QUIT BRAGGING! Secondly, I'm still waiting for the $5000 month, let alone the week. Chris Burkhart - Sandy, UT
Sorry, I wasn't trying to brag! Your day will definitely come. That is why I titled it, "High Class Challenge," because it is a two-edged sword to complain about the difficulties of success. Everyone knows this business has its up times and down times. There are other inspectors who do far more business than I do. They just don't have a weekly newsletter to tell you about it!
The IRS is smiling at you, Michael... I don't dream of a "$4,500" week. This is a nightmare week, not a dream week. The question is, "When do you say "No" to someone that wants to book a inspection?" How many inspections can one person do a week with the quality and time that every buyer deserves? How do we control our success? I know my maximum amout of inspections per week. It is a successful week if I do that amount. If I do more than that amount, I forfeit any family time left in the day. My recommendations are to set a maximum amount of inspections per day and hold to it. As much as we would like to, we can't do them all!!!!!! How many inspections is a $4,500 week? Ken Jones - Redding, CA
To answer your question, Ken...12 inspections (Three days with 2 inspections and two days with 3 inspections). That is not that crazy, except when you add the family activities, etc. Your advice about setting a maximum is one I have just recently decided to adopt. My goal is to only do 2 inspections a day...3 just makes me too busy and too overwhelmed. It is always frustrating when you cannot book 2 in one day but you have 1 each for three days. I'd rather do 2 a day and a have day off! Never seems to work that way. Also dislike it when I have an inspection in a city further than 20 minutes and I get another one for the same city....different day. Wish I could pair up cities, but, again, it just doesn't work that way. I know that in the dream world you stay booked out two weeks ahead and you do not let anybody intrude or break the 2 a day rule. This is not the reality or the monster that I have created. I also always feel the guilt of turning away money. Afterall, I worked too hard to get my phone to ring...... Ahhh, High Class Challenges!!! Thanks for your replies..... To share more of your thoughts, go back to the reply box up above and we'll all reap from your thoughts and solutions next week.
You may be saying to yourself, "Now, why in the world is Leavitt talking poodle grooming on the MMM? How can this possibly relate to me and my home inspection business?" Hopefully it will give you a glimpse into fees and marketing that will show you the tips can be universal to all service businesses and CAN be implemented by you for greater return for your time.
My older sister, Susan, is a dog groomer. She is not just any dog groomer. She has been doing this for over 20 years, is as meticulous and expert as they come. She is also a dog trainer, dog breeder and, even more impressive, an American Kennel Club dog judge for several different breeds and classes of dogs. It is a difficult task to become an AKC dog judge and each breed requires its own stringent, time-consuming list of "must-do's" before you can qualify as a judge. She spends much of her weekends judging dog shows around the country and her weekdays running her dog grooming business. She has been a successful business woman for years. I am proud of her and what she has accomplished.
Last week I spent about an hour and half talking with her about her business and her fees. She was talking about having too much business, but not wanting to turn any of it away. She recently lost her assistant (her son) to another job opportunity and she now had to take on all of his duties as well as hers. The plus side was that she didn't have the extra salary to worry about, but the extra work was way more than she wanted to take on. She also mentioned to me that it irked her that she charged less than the PetSmart in town and their services were far inferior to her. She told me that when she was grooming a dog that she knew PetSmart got more money for, it just didn't sit well. But she had just raised her fees a month ago (a very small amount) and didn't want to offend any regular customers.
So we talked. I told her the first thing she had to do was raise her fees high enough so that she would lose 30% of her business. The gasp was audible on the other end. "What?!! Are you nuts?! Did you not understand my dilemma? I don't make too much money...I have too many dogs to groom. I like the amount of money just fine, thank you very much. I can't afford to lose 30% of my business." Are you with her so far? Are you thinking the same thing?
Let me explain.
There is such a thing as positioning yourself as the cheapest (fill in the blank) in town. Someone should be the cheapest in town. It should not be you. Let someone with less experience and less brains be the one who works hard for less money. If you have the training, credentials and product to be the best, then sell yourself as the best. This is the hardest lesson to learn in business. It was so difficult for me to start raising my fees. It was uncomfortable on the phone when I heard the audible gasps. It was difficult to spit out the higher fee quote. But I had to believe in my fees and believe my report and expertise were worth every penny.
When I first started it was tough to quote over $200 because the existing marketplace topped out at $185. Then we crossed the $300 barrier and just saying $335, $365 or $385 made me shake in my shoes. Those were fee quotes for the larger homes, yet the majority of my quoting was still in the $200 range of which I was quite comfortable with. Earlier this year, we crossed the $400 line with most of our quotes being in the $300 range. This means that much of my business is in the mid $300's.
Please keep in mind that we have basements, so our square footages are double most of yours if you live in slab and crawl space markets.
Add $50 for crawl spaces, of which most of the under 1400 square ft homes in our area are and you have got yourself a good, over $300 fee every time you walk out the door. Most of my fellow inspectors are very satisfied with the $235 fee that I loved 5 years ago...... I'll give them another 5 years and they will also climb to the minimal $300 fee of the Appraisers..... Time will tell.
I lost some business along the way. Some of that business I was glad to lose...the cheap, old, cruddy homes with tons of reportable conditions that made my hands cramp from all the typing being bought by people who didn't understand the responsibility of being a homeowner. You know the people...they have been renting and calling their landlords to repair and replace anything that goes wrong and now they own a home and who can they get to pay for their repairs and replace their broken appliances? (They would like it to be either you or their real estate agent....but not them.)
Part of the challenge of having higher fees is trying to get across to the client in a short period of time what sets you apart from the cheaper inspector. Why ARE you more money? It is something you have to rehearse over and over in your mind what your answer will be when someone asks you that. You need to be able to succinctly describe the difference between your high quality inspection and what they will receive from others without bashing anyone. My wife uses the analogy of TVs. Home inspections are not all alike. It is not like you are going out to buy a Mitsubishi 27" color, picture-in-picture TV and now you are calling around to all the stores and asking what they charge for the exact same TV. It is like calling up stores and saying how much is a TV? (with no specific type) and one place quoting $99 (for a 9" black & white TV) and the next place quotes you $299 (for 13" color TV) and you call another place and they say $899 (for the 27" color, pip TV). And you're thinking, I can get a TV for $99 or $899....I think I'll spend $99. Then you go down and see the TV is a 9" black & white TV and that isn't what you had in mind at all.
I tell people there are all different types of home inspections. You need to find an inspector and report that fits your expectations. If all you want is a 9" black & white TV that works, then spend $99 and be happy. But if you are expecting a lot more features, then you will be greatly disappointed with your $99 purchase.
Now, back to my sister and dog grooming. After we talked about these concepts for awhile, the little light went on in her head and she got it. "But what about my regular customers? I want to reward them for coming in on a regular basis and for being my customers for so long." So we devised a special client card that she will give out to those clients that she has been doing business with for years. The card will be good until the end of the year and it will ease them into the higher fees.
Let me go back to the "raise your fees until you lose 30% of your business" part. You have to remember that although you are losing some actual work time, you will not be losing that much money because YOU HAVE RAISED YOUR FEES. I don't want to get in trouble about fixing fees, so let me stick with the dog grooming business. My sister raised her fees 15% and also made different weight categories. (10 lbs and under, 11-20 lbs., etc.) Bigger dogs=higher fees. This was also a new concept for her. She hadn't done this to this degree before. She had two weight categories, but there were really just two fees.... Big Dog and Small Dog. She also decided to add deluxe services and basic services so that people could choose the degree of grooming they wanted for their loving pets. More work for her = higher fee for grooming. Let's say she does 8 dogs a day/ 5 days = 40 dogs a week. She used to charge between $22 - $26 per dog. Gross amount = $880 to $1040 per week. Now she loses 30% and only does 28 dogs a week, only does 7 dogs a day plus takes a day off for fun, and can earn between $730 to $1120 per week. (She earns a lot more for the bigger dog than she used to and that helps make up the difference). So at first, her weekly take may go down some, but she will be doing a lot less work for almost the same pay. Eventually, and it doesn't take that long, she will be back up to doing 40 dogs again and being too busy. Then she will be taking in anywhere from $1140 to $1800 per week, depending on the size of dogs. That's when I say, "It's time to raise your fees again!"
SIDE NOTE: Susan only grooms in the mornings 5 days a week. She wants to gross thousand dollars per week and then she wants to spend the rest of each week doing what she really loves such as riding her horses through the countryside. She is 9 years older than me and I hope that I can settle in on that approach to the work week someday soon.
This is how I also increased my per inspection gross. I changed the square footage requirements to smaller categories. I dropped my smallest home to 900 sq. ft and below. I rarely get homes that small. But if anyone asks, my base fee stayed the same. Your home is how big? Bigger home = bigger fee. I used to have pretty big categories for square footage. It was easier to quote off the top of my head and I didn't have to gulp before quoting such high fees. But then I realized I was only cheating myself and working too hard for not enough money. When times are slow, it is more difficult to not book every inspection. You want every inspection, but that is not feasible. When you have no inspections booked yet or just a few, you may be tempted to drop your fees. Don't. Stick to your principles. You offer a high quality inspection, you have been trained and certified by the best, your report is superior to others...you deserve the higher fee for your service. Let that inspection go. Others will call. I promise.
PS....... It was extremely satisfying last week to receive a phone call from Susan to say that our little talk increased her revenue for the week by $100.00. She was thrilled.
What is your approach to setting your fees???
Your Name:Phone:State:
Privacy, maybe?? We seem to all come across some very strange installations. Future finish work in the crawl space?? Interesting. Jim Corbin - Bow, WA
Silly!! That is where the sewer line is. (clean-out). Reggie Ayres
Michael: In a conversation with a Realtor who owns one of the units in this 4-plex(after our last e mail on this subject), he told me that several of the previous owners got together and hired a maintenance person to complete repairs needed to the building. It was going to take him several weeks to a month to complete the repairs. He didn't have a place to live, pitched a tent on a small storage platform and installed the toilet for his own use while he was working & living at the property. Bill Bergstedt -S. Lake Tahoe, CA
Shelly was perusing my huge amount of unread e-mails (I can't catch up) and she realized that I failed to share the following info on the "Sucker Lot" we discussed a month or so ago.......
The Pacific Northwest is known for its accumulation of water and "rain" so one would think the builders are also aware of this. Sadly they are not. I find new homes that are purchased by the elderly as their "last home" and "downsized" for the ease of upkeep they require. I found two recently that fit the "sucker lot" description. Both lots were at the base of a known drainage hillside and had no provision for picking up the drainage before settling into the known low spot in the crawl space. The crawl spaces were not even graded but still had the mounds of earth piled where they had dug out for the lateral footings. The lawsuit cost the builder as even his lawyer was on the side of the purchasers. The contractor did not even pain the LP siding, which he got stuck for also...but, that is another story. The latest water story happened last week. I inspected a home 8 years old and noted a hole in the crawl where the contractor had dug under the footing to pass through the sewer line to the street. No backfill; just left the pile of dirt and the hole. I also noted that there was a distinct water level line on the visqueen and that the earth beneath the footing had fallen away leaving no support to the footing for about 4 feet. Sure looked like water entry to me. I recommended a contractor to evaluate and repair to prevent further erosion condition. I also recommended a sump pump with a drainage system at that end of the crawl to that low spot to pick up and discharge collected water. I was called back to reinspect the repairs. (In the interveening time, we had a good few days of steady rain) The hole was filled in and new visqueen was spread. I entered throught the crawl space opening and found 4" of water at that end all the way to the backfilled area. No sump pump had been placed. I advised the agent that the sump pump had not been placed and that water had accumulated. They admitted to a "hoped for least investment" approach instead of the right way. It ended up that the investment was more than if done correct in the first place. Contractors know the issues, yet still try to get around them. The elderly and first time buyers seem to get stuck the most. Oh well, another story from the inspection world we each participate in. Good inspecting. Have a great day! Jim Corbin - Bow, WA
Right after reading Walter Jower's Sucker Lot article, a State of Utah employee comes up to me on a break from a mold seminar I attended here in Salt Lake City. She begins to relate this experience..... "My husband and I are considering the purchase of a home up in Jeremy Ranch (an exclusive place near Park City, Utah). This home sits at the bottom of a valley-type neighborhood........." BINGO!!! This is the "Walter" scenario..... The home is 4 years old and the basement flooded the first winter, but it has not had water entry since that first winter. The builder added a french drain and corrected the grading. It must also be a great home because the Builder's son has lived in it until now and it seems to be very well completed.
I then asked her the questions Walter wrote about. Is this home the lowest in the valley? Does this home sit lower than the street? Do you think that it is a good thing or a bad thing that the Builder's son has been in the home?
I told her that I have a friend who just wrote a newspaper article about her plight known as "Being the sucker to buy the sucker lot." She couldn't believe that I told her she was a Sucker..... When I told her that the Builder's son probably lived there because they had yet to find the Sucker.... Well, she was happily insulted. I confirmed every inner prompting that she had resisted until our conversation. I then went on to quote Walter's description of the Sucker Lot scenario and it all rang true. I then told her that I had no idea if hers was the sucker lot, but that I believed that she would go back with her husband to re-evaluate their possible purchase decision and see if this was the case.... She graciously thanked me and Walter's words rang true for her..... Great story, Walter!
Bill Schwahn shared this story with us last week about sagging roof sheathing. The following are your responses:
Michael, One of the inspections I did today was a real experience. I viewed the roof from the street and noticed a roof deflection. As I stepped onto the roof from the ladder, I almost put my foot through the roof. I continued up the roof and it felt uneven, then in the middle of the field, I almost fell through the roof again. At that point, I went to the ridge of the roof and tried to figure a way to get off of the roof without falling through. During the Attic portion of the inspection, I found an area of the roof sheathing that was approximately 12 feet by 40 feet where the roof sheathing was completely delaminated and sagging into the attic. There was fungal growths on an area approximately 15 feet by 45 feet. The owner had insulated the attic with fiberglass batts and had stuffed all of the soffit vents with insulation. There were only 2 attic vents on a 1600 sq. ft. single level home. Ice damming was part of the culprit as some of the insulation was still wet in the attic. This home was built in 1966. Good Inspecting-- Don't Fall In! Bill Schwahn - MT
The ones that I have seen are too thin for the span. When I bought my home some 10 years ago, the "harvey homeowner" repairs, etc. were never good. The roof sheathing was, in places, 1/4" plywood, others 1/2" plywood...but, never 5/8" or 3/4". Sag, yes it did. Now it does not. Moisture from inadequate ventilation also weakened the material. Jim Corbin- Bow, WA
I did an inspection yesterday (May 17, 2001) - Same thing! When I mounted the roof, I too almost went through. The inspection only lasted 15 minutes. Unsatisfactory roof, chimney, ventilation and heavy black mold and plywood delamination in the attic. More people should read my CD, "Scary Stories, Part I, From the Attic". http://www.ronhungarter.com - Ron Hungarter - Larksville, PA
Thanks for the reminder of your Scary Attic information. Those who attended last year's AII Annual Meeting will remember Ron's "Scary Stories From The Attic" presentation. It was excellent.
I am seeing new construction that has 7/16" OSB @ 24" OC. With dimensional comp shingles. The deflection when walking on it is incredible (I am 190lbs.) What is going to happen when the second or third layer is installed? Oh well, keeps people working in the future. -Reggie Ayres
Please include your name or I don't know who it is from...
Jon Gudnason has a wonderful little photo archive showing a home that obviously needed the repairs that go along with a signed-off Building Permit. This is an underview of a home. Yes, those are floor joists and a support beam....What would you report from this view of the home???
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