December 16, 2002

GOOOOOD MORNING, A.I.I.....

It's a great day here in Orem, Utah! Most of you are aware that times have been a little difficult for my immediate family. Any free time has found me trying to catch up on loose ends. A good neighbor friend of mine came up to me a week ago and said "Michael, I know that you have been busy, but I would love to come over next Saturday and help you get your Christmas lights up." He went on to share that they missed not seeing our lights up this year. He was right, I had been negligent and really had no good excuse. My family loves the joy that the colored lights bring. My friend's promptings made me step back and rearrange my priorities to get my lights up.

Putting up lights at our house requires the placement of the stars on the tops of our two large pine trees. Every year these trees get taller and it is all I can do to get to the top of my 26 feet extension ladder and reach as high as possible. It takes one person at the bottom securing the ladder while the tall fool (me) gets the chance to climb to the highest heights without breaking their neck in the process.

It feels so good right now to be able to walk outside and see the house and tall trees all lit up. The colored lights has helped our family to feel the spirit of the season. I certainly appreciate the love and friendship of the MMM readers. You have all been wonderful to our family and Shelly has been responding to the great amount of prayers offered on her behalf. We hope that you are being taken care of this holiday season.

As for the cold weather, it has finally hit northern Utah. By Tuesday we should be covered with snow. I don't look forward to this thought, but it has been a long time coming. We have been lucky to have a relaxed winter so far. I compare our moderate winter with the ice storm film footage that I was watching on the TV last week from the east coast.

ERRORS & OMISSION INSURANCE

Can you please share with us some details about your errors & omission insurance and your general liability insurance. Inspectors nationwide have been hit hard this year with skyrocketing rates. Can you please tell us some of the details of your policies? Who is your provider? What are your rates? How are your rates different from last year? What limits of coverage do you have? What other companies did you pursue when making your E&O purchase decision? Do you have your general liability combined with your E&O. If not, who are you using for general liability? How much is it and what are the coverage limits?

Your Name: City, State: B1

Please provide your full name or else we will not know who the response is from.

INSPECTION FEES

DO YOU HAVE AN ADDED CRAWL SPACE FEE? WILL YOU BE RAISING YOUR FEES WITH THE TURN OF THE NEW YEAR?

I do have an added crawl fee $35.00 Yes, I will be raising fees in the new year. Bob Kille - Sonoita, AZ

Crawl spaces are the rule here and I generally do 10 - 14+ a week. Inasmuch as crawl spaces are the norm, there is no added fee. My fee structure has been based upon structures up to 2500 sq feet, however, I plan to reduce the square footage/minimum fee figure and adjust my prices upward for square footages over 2000. This also raises an interesting question: I have heard from more than one person here that raising ones fees also seems to increase business, which makes absolutely no sense to me, but nevertheless, I plan to move forward with fee restructuring. Larry Stamp - Olympia, WA

I have VERY few crawl spaces here in St. Louis, MO area, but when I do get them, I charge an additional $25 - Scott Moore - Hillsboro, MO

Not at this time, but I will be raising my Professional Fee for stand alone Structural Pest and Dry Rot inspections. Dennis Riordon - Springfield, Or

We've established what we think is an appropriate fee for a complete home inspection, including crawl space. We then offer a 10% discount if a home has no crawler, using the marketing theory that it's better to subtract than add fees for services whenever possible. Sandy Hartman - Seattle, WA

Fees are such a personal issue and my discussion here is not meant to influence or sway you to raise, lower, or conform to a fee standard that might indicate some huge conspiracy to set fees across the nation. Instead, it is meant to open up a typically taboo topic that really needs to be discussed more, yet the fear of the FTC generally keeps everybody hush hush.

I had a great conversation with a Washington state inspector this week who is in quite a predicament. I felt it okay to talk about his situation because I have spent time walking in similar shoes. What happens when everybody in your market loves you and have you chasing around trying to complete as many as 55 inspections in a month? The challenges that one faces with this overburdened workload is incredible and it is hard to be clear thinking when in the midst of the mayhem.

If you have never been faced with the high class "problem" of too much work and not enough time, then be careful what you pray for. There is a huge stroke of ego involved with an overbooked schedule and it can happen within a week. All of the marketing and the office presentations suddenly pay off and you can find yourself unprepared for the success that you worked for so long.

In my discussion with this inspector and there were some key points that every inspector must consider, but in todays segment we will focus in on one important aspect. What is your positioning of fees amongst the other inspectors in your area?

On a scale of 1 to 10 with ten being the highest, where do you fit in the scale? Are you the bottom feeder at the 1 to 3 range? Are your the newbie trying to grab marketshare in the 4 to 6 range? Are you the middle of the road inspector with the 7 to 9 range? Or do you see yourself as the Top Dog with the big 10 fees?

Understanding where your fees are structured may require some phone calling to other firms in the area. Knowing where you have positioned yourself can then allow you to further evaluate whether or not your objectives are being met. It can also determine the caliber of client that you will be chasing after. It may also reflect the service that you are providing verses the time invested. Obviously the pencil and checklist inspectors have considerably less hardware, software and technical time invested in an inspection. Therefore, they may not be able to command higher fees.

It does not take much effort to be a bottom feeder. All you have to do is the bare minimum of everything. Along with being a bottom feeder comes the headaches of "Price Shopper" clients and agents that expect more and want to pay less. Not only do they want it cheap, but they need it now. They have very little patience and if you are not careful they will put you out of business with their unreal expectations and are really not worth the headache.

Newbie's generally "price" cut the competition in an attempt to grab market share. We have heard about the Pillar to Post franchisees that are required, uh I mean encouraged, to give out 500 FREE inspection coupons to the local agents in the first 6 months of business. This is an attempt to get an agent to use them and then get paid inspections the next time. What agent does not like FREE things? How would you like to be the newly invested and trained $30,000 to $60,000 franchisee that has to perform 500 FREE inspections. This start-up process on their part can temporarily devastate the marketplace for the middle of the road inspectors. If you have this going on in your area, be patient. Their success rate is very low and as in the case of our local franchisee, he was out of business in 6 months.

The laughing out loud Pillar to Post story came from my fellow Pillar to Post inspector friends out of northern Utah. They stopped giving away the inspections coupons after about 50 free ones. They turned sour on the subject when they had an agent who told his out of state clients that they were could give him the check for the inspection and then he would pay the inspector. To save a hassle they should just make out the check directly to the agent. Then the agent used the free coupon to cover the inspection expense.

Newbie inspectors must be careful not to set their fees too low. This can make the future fee increases difficult once they get established. When I started out I opted to give coupons that when used placed me at the same level as the other inspectors, but when it expired found the agents continuing to use me at $50 more than the next highest inspector in town. It worked well for me, but I doubt that the coupon made that much difference. I believe that the real difference came when I decided to get a flier in each agents hand every week. It took a lot of effort, but they quickly learned who I was and that made all the difference.

Middle of the road fee inspectors have the hardest time because they are competing against other good inspectors for business. This is where marketing can pay off in big dividends. Selling your strengths and bulletproofing your weaknesses are also key features of success in this range. The ability to close a phone caller is important and can make the big difference between a booked schedule and a hit or miss schedule. All of that phone closing can wear you out, so be prepared for high usage cell phone bills if you book your own inspections (which most of us do).

The "Top Dogs" have life the best, if they truly are the top dogs. If they are the best and offer the most complete reports, along with the best onsite demeanor, then they can command much higher fees. They will be able to better pick and choose their inspections and make more money doing it. They also must constantly be aware of the local industry because to remain top dog you must stay ahead of the pack.

So what are you on a scale of 1 to 10? What drawbacks do you encounter with your fees set as they are? What kind of clientele do you provide services for most of the time? If you had your choice to set your fees right now, would they be different than they currently are? Does your market lock you into your fee structure or are you able to call the shots. And finally, if you had 55 inspections a month and could step away for a moment and set a new plan of attack on your fee structure, then what would you advise for yourself???

SYSTEM FAILURE & BACK-UPS

Do you have a computer success or failure story to share???

Whenever I have a computer challenge, I don't spend much time trying to fix it myself. If it's with my Ipaq, I call Compaq tech support - they have generally been good. For other things, I call my local computer consultant. Most of the time I can describe what is happening, and he can solve the "problem" over the phone. When I bought a new computer, I took both the old and new ones in to him, and he transferred all the software and files, spent time on the phone with Compaq resolving something, re-organized the hard drive on my old machine, moved my CD-RW drive to my new machine, and gave me both computers back running perfectly for a $175.00 fee. I would have spent many hours trying to do what he did myself, and would probably end up taking it to him anyway after doing something incorrectly, making an even bigger mess for him to fix. I can easily come out way ahead by spending my time on marketing by business and doing inspections rather than trying to fix computer "problems". Gary Holzbauer - Junction City, OR

Scott Moore is a newer participant here in the MMM and he offers some great advice.......

As a recommendation, get a good backup program, like PowerQuest DriveImage from http://www.powerquest.com/driveimage/ and when you get your computer running and the software installed, MAKE A FULL SYSTEM BACKUP. This way, you can always go back where you know it was working well.. Scott Moore - Hillsboro, MO

Reggie Ayres could have really used that advice. His all too common tear jerking sob story reads as follows......

Michael, I got up at my usual 3 am to start my work day (that's when I do the report writing ), and found that my C Partition was GONE! Dead! No help with my boot disc, no manual boot, nada! My ability to complete my work by the promised time was gone. My 3D program, reports, files, everything was gone. I instantly called my good friend who helps me with my setup and computer issues.( He designs circuit boards ). After checking the computer, he played TAPS and we headed for the local warehouse to buy a new hard drive. When we left, I had 120 Gig drive, AMD 2.7 processor, newest ASUS Motherboard, New Sound Card,and G-Force 3 Video Card. Plus a few other frills. $837.00. Fortunately he had all the software or knew where to download from to replace all the essentials. Twelve hours later, He had me up and running better than I could imagine. And I now have two backup systems that automatically back up daily and weekly to my wife's computer, which has identical 3D program ( networked ). Both machines run XP. This set-up is awesome! We now have a firewall ( router too ) plus virus detection, all the latest drivers, tweaks, etc.

I am so fortunate to have a friend who is so computer wise and willing to spend the hours it takes to properly set-up. This happened Thursday morning and I was able to deliver four reports Monday morning as promised. Dan took my dead hard drive and managed to extract some data, but nearly a years worth of reports were lost.

Now, I can go to our other machine and do exactly the same tasks as I do with MY Computer, They are mirrored. I thought I had enough protection before, but somehow I got bit and lost everything during the night. Moral of the story...Back-up often and put it somewhere else. Like Brent and Michael do, Get the Best equipment money can buy and use it! Hey Brent, do they have virus sniffin dogs too??

Another new thing, I can now print both sides of report pages. I figure that I will recoup my latest expenditure (paper cost savings ), after about three thousand jobs!! LOL. Reggie Ayres - Medford, OR

Now I realize that Reggie's story sounds like it will never happen to the rest of us, but I hope to shake you up just a bit. The fact is that hard drive crashes happen and rarely do they give you any notice. When they occur, then you are potentially out of business unless you have previously taken the precautions mentioned above. Please answer the following questions....

1) When is the last time you backed up your inspection folder on your hard drive? What would you do if you lost your 3D files?
2) What source of back-up do you use?
3) When do you back-up?
4) If you computer crashed today, would you have a copy of every inspection report file?
5) If your hard drive crashed, how much would it be worth to you to have all of the data extracted after the fact? Have you ever had to pay for data extraction?

How do you back-up you data files on your computer? I can't tell you the number of times inspectors have called me to see if I archived their custom report forms. This amazes me because your report forms are your livelihood. I would think that you would have them backed up on a disk stored in a fireproof safe. Don't delay this very important part of computer usership....... Back up your files today!!!

WHAT TOOL DO YOU WANT FOR CHRISTMAS?

Each year we get the opportunity to dream of a wonderful new tool waiting for us under the Christmas tree. And although we may not get it due to other priorities, many of us still spend time in the bathroom perusing the catalogues. For some it might be a computer or periphial. For others it is a moisture meter or high tech outlet tester. And for others it might be anti-virus protection or a new hard drive back-up system. What tool would you love to receive this year?

DO YOU PRINT ON SITE???

I only print fingernails in my reports but I burn a copy of all pictures that I take on site and give it to my customer on site I also save my report in PDF and put that on the cd. I am the only one around here offer this service and the customers love it. Mark S. Connely - Freeport, IL

I print my reports onsite upon request. A lot of realtors in my area figure having to wait 2-3 hours for an inspection to be completed is enough and they dont want to wait around for the finished report. I have taken to printing a summary page onsite and then sending them the report with photographs by email if they have a cable email system not a phone line email because 3d reports are to big in some cases. I beleive 3d is coming out with a program that you can print a report directly from your handheld. I use a IPAQ 3835. If they want to wait around for a report they have the option of pictures at that time,or to speed it up no pictures. I have taken to printing out a CD label with the customers name and placing it on a CDR. Then downlaoding my report to a pdf and then copy it to a disc. It takes about 1 minute for a 30+ page report and the pictures on the CD are amazing. This also allows the realtor to make as many copies as they want and the CD looks very professional with the clients name on the label. I do this all onsite with a laptop and I have a portable printer or I bring along an Epson C80 color printer. The epson does a 30 page report with pictures in about 8 minutes.Again I offer this service only upon request, and I do not get that many requests. Gordon Cohen - St Petersburg, Fl

December 16, 2002

ERRORS & OMISSION INSURANCE

Your Name: City, State: B1

Please provide your full name or else we will not know who the response is from.

INSPECTION FEES

SYSTEM FAILURE & BACK-UPS

Do you have a computer success or failure story to share???

WHAT TOOL DO YOU WANT FOR CHRISTMAS?

DO YOU PRINT ON SITE???

PHOTO CHALLENGE #133 RESPONSES

PHOTO CHALLENGE #134

Is this acceptable? What would you report?

QUOTABLE QUOTE: "Things turn out the best for people who make the best out of the way things turn out." John Wooden

The Most Qualified Inspector in Northern Utah!

[Michael Leavitt's Home Page | Back Issues of the MMM | Current Issue of the MMM]

Copyright; 2002 * Michael Leavitt & Co * 1145 N. Main St. * Orem, UT 84057 * 801-225-8020

December 16, 2002

ERRORS & OMISSION INSURANCE

Your Name: City, State: B1 Please provide your full name or else we will not know who the response is from.

INSPECTION FEES

SYSTEM FAILURE & BACK-UPS

Do you have a computer success or failure story to share???

WHAT TOOL DO YOU WANT FOR CHRISTMAS?

DO YOU PRINT ON SITE???

PHOTO CHALLENGE #133 RESPONSES

PHOTO CHALLENGE #134

Is this acceptable? What would you report?

QUOTABLE QUOTE: "Things turn out the best for people who make the best out of the way things turn out." John Wooden

The Most Qualified Inspector in Northern Utah!

[Michael Leavitt's Home Page | Back Issues of the MMM | Current Issue of the MMM]

Copyright; 2002 * Michael Leavitt & Co * 1145 N. Main St. * Orem, UT 84057 * 801-225-8020

Your Name: City, State: B1

Please provide your full name or else we will not know who the response is from.