Do you want to start a home inspection business? If YES, here is a complete guide to starting a home inspection business with NO money and no experience.
Okay, so we have provided you an in-depth sample home inspection business plan template. We also took it further by analyzing and drafting a sample home inspection marketing plan backed up by actionable guerrilla marketing ideas for home inspection businesses. In this article, we will be considering all the requirements for starting a home inspection business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Home Inspection Business?
Have you ever wondered how immigrants or people who intend to relocate to a new city go about securing accommodation? In this era, you can be in Africa and have a home inspection team help you carry out all the necessary inspections before paying and moving into a new apartment somewhere in Canada, the United States or any country of the world.
This goes to show that there is indeed a need for home inspection companies in the United States. The first step you need to take if you want to start your own home inspection business is to enroll in the American Home Inspectors Training Institute. Record shows that this institute has helped loads of entrepreneurs in starting and expanding their home inspection businesses.
One good thing about the home inspection business is that you can actually start the business with low startup capital and from your home if you have successfully undergone the required training and have gotten the professional certifications and licenses.
But no matter the type of business you choose to start, before launching the business, you should ensure that you carry out your due diligence as it relates to market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your home inspection business, it will not take you long before you secure enough clients and start smiling to the bank.
If indeed you want to start your own home inspection business, all you need to do is read this article and you will be well informed and equipped. You can start your home inspection business from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes nationally recognized.
Starting a Home Inspection Business – A Complete Guide
- Industry Overview
The home inspection office is a niche idea in the Building Inspection industry and firms in this industry basically perform inspection on buildings. When home inspection representatives inspect a building, they evaluate all aspects of its structure and component systems, and they prepare a report on the physical condition of the property. These reports are written for buyers or others involved in real estate transactions. Please note that aside from home inspection companies, building inspection services are also included in this industry.
If you are a close watcher of the building inspection industry you will agree that the demand for building inspection services will get a boost from the economic recovery over the next five years. Despite the fact the weak housing market has hit industry businesses hard, the reinforcement of housing and rising number of existing home sales will contribute to growth.
Mortgage lending rates will continue to remain tight and hamper revenue; however, the industry is poised for a recovery. Experts projected that the building inspection industry recovery will be driven by improvements in employment and per capita disposable income.
The Bureau of Labor Statistics (United States of America) projects an 11.1 percent job growth for the real estate industry between 2012 and 2022, which is about as fast as average. During that time, an additional 38,000 jobs will opened up in the industry. Any home inspection company that is well equipped and positioned will sure rake in huge revenues from this industry within this period.
The building inspection industry is indeed a large industry and pretty much active in countries such as United States of America, United Kingdom, Germany, France, Italy, Holland, Switzerland, Australia and Canada. Statistics has it that in the United States of America alone, there are about 24,209 registered and licensed building inspection companies scattered all across the United States responsible for employing about 36,989 and the industry rakes in a whooping sum of $3 billion annually. The industry is projected to grow at 4.4 percent annual growth within 2012 and 2017. It is important to state that there are no establishments in this industry that has a lion market share.
A recent report published by IBISWORLD shows that in 2016, operators in the building inspector industry are expected to spend about $0.08 in capital investment for every $1.00 spent on wages, indicating a low level of capital intensity.
Given the industry’s service-based nature, labor makes up the majority of expenses. This is especially true for non – employers, who make up the majority of enterprises. In such companies, the inspector pockets all the revenue minus the cost of doing business, thus there is a huge labor expense.
The bulk of this work is visual, although inspectors may use equipment such as tape measures, surveying instruments, electrical metering devices and concrete strength testing equipment to complete various stages of an inspection.
Some of the factors that encourage entrepreneurs to start their own home inspection company could be that the business is a thriving and profitable business and an aspiring entrepreneur can successfully launch the business from the comfort of his or her home.
The building cum home inspection industry is highly regulated in the United States of America and anyone who aspires to start a home inspection company must apply and obtain a license before they can legally operate in the industry.
Starting a Home Inspection Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who hire the services of home inspection companies cut across all households, businesses and players in the real estate industry hence the demographic composition for a home inspection business is all encompassing. The truth is that when it comes to the home inspection business, there is indeed a wide range of available customers.
It should also include families who are interested in acquiring a decent and well renovated home, corporate organizations who are interested in acquiring their own properties and foreign investors who are interested in owning homes or properties in the United States of America amongst others.
List of Niche ideas Within the Home Inspection Business That You Can Specialize in
It is safe to say that there is no niche area in the home inspection line of business because home inspection business is a niche idea in the building inspection industry. On the other hand, a home inspection company may decide to specialize on any of the under listed;
- Inspecting and reporting on the structural attributes of a building
- Reporting on and evaluating the component systems of a building (electrical, fire, roofing and plumbing)
- Assessing compliance with building, electrical, plumbing and fire codes
- Evaluating building plans and permits
- Studying and assessing the soil composition and attributes of where the building is located
- Reviewing and approving plans that meet building codes, local ordinances and zoning regulations
- Issuing violation notices and stop-work orders until building in violation is compliant
- Keeping daily logs, including photographs taken during inspection
- Real estate consultancy and advisory services
The Level of Competition in the Home Inspection Business
The competition that exists in the home inspection line of business goes beyond competition amongst home inspection businesses in your location; you are expected to compete with other businesses in the real estate industry who are also offering home and building inspection services. So, it will be right to say the competition in the home inspection line of business is tough.
In actual sense, no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services properly, you will always make headway in the industry. Just ensure you having a good knowledge of inspection processes, ability to attract local support/patronage, your workforce can carry out thorough home inspection and give detailed reports to your clients, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But there are several home inspection companies and other players in the real estate industry that also carry out home inspection services scattered all around the United States. So, if you choose to start your own home inspection business in the United States of America, you will definitely meet stiffer competitions amongst players in the building cum home inspection industry. Besides, there are larger home inspection companies that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading home inspection companies in the United States of America and in the globe;
- House Call Home Inspection
- USA Home Inspections Services
- Spectrum USA Inc.
- HouseMaster Home Inspections of Central Indiana
- ValueGuard Philadelphia Home Inspections
- Home Check Home Inspections
- USA Building Inspections Inc
- AmeriSpec Home Inspection Service
- A B Home Inspections, Inc.
- The Home Inspection Company
- A Buyer’s Choice Home Inspections
- Reassurance Home Inspection LLC
- Lead Inspectors USA
- Axium Inspections, LLC
- Capitol Hill Home Inspection, LLC
- Precision Home Inspection of America, Inc
- Southern Exposure USA Inc
- Centurion Home Inspection Inc.
- Mold Test USA of Colorado Springs
- Cotecna Inspection Inc
If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Home inspection business is not a green business as you will come across several home inspection companies and other players in the real estate industry that also carry out home inspection when you drive through town, search through directories and browse through the internet.
So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the required amount needed in renting an office space where you are expected to open your home inspection business and also the cost to successfully run the business.
Starting Your Home Inspection Business from Scratch vs Buying a Franchise
If you are looking towards starting a home inspection company, you would have to start from the very scratch because you can hardly get a franchise of a home inspection company to buy. It is a business that is open to all and sundry especially if you have undergone the required training.
Starting a home inspection company from the scratch is less stressful when compared to other small scale businesses which usually require detailed groundwork before launching the business. With a home inspection company, you should just try as much as possible to get the right employees, build business relationship with key stakeholders and then leverage on every marketing tools within your disposal especially the internet to market your services.
Please note that most of the big and successful home inspection companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Possible Threats and Challenges You Will Face When Starting a Home Inspection Business
If you decide to start your own home inspection business today, one of the major challenges you are likely going to face is the presence of well – established home inspection companies and other players in the real estate industry that also carry out home inspection services. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in a bad shape, home inspection companies usually struggle to maintain their old customers or even welcome new customers. So also, unfavorable government policies can also hamper the growth of your home inspection business. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
Starting a Home Inspection Business – Legal Matters
- Best legal entity to use for this type of business
When considering starting a home inspection business, the legal entity you choose will go a long way to determine how big the business can grow; some home inspection companies design their business for neighborhood market, some for city wide market, while others for national market via franchising.
Generally, you have the option of either choosing a general partnership, limited liability company or even a sole proprietorship for a home inspection business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale home inspection business especially if you are just starting out with a moderate startup capital in a small neighborhood and carrying out selected home inspection services.
But if your intention is to grow the business and have offices and corporate clients all across key cities in the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your home inspection business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your home inspection business with the ability to sell franchise and having offices and corporate clients all across the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your home inspection business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
Catchy Business Name ideas Suitable for a Home Inspection Company
You will agree that when choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own home inspection business, here are some catchy names that you can choose from;
- Hedge Classy® Home Inspection Company
- Merseyside® Home Inspection Services, LLC
- Pent House© Home Inspection Services, Inc.
- Trace® Home Inspection Company, Inc.
- Expert Inspectors™ Home Inspection Company, Inc.
- Team Excel™ Home Inspection Company, Inc.
- Packer House© Home Inspection Company, Inc.
- Heritage Linage® Home Inspection Company, LLC
- Vintage Group© Home Inspection Company, Inc.
- Jeremy Tinoco© Home Inspection Company, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your home inspection company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own home inspection business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers compensation
- Property/Building Insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own home inspection business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Is Professional Certification Needed to Run a Home Inspection Business?
Aside from the results you produce as it relates to inspection homes and submitting detailed reports, professional certification is one of the main reasons why some home inspection companies stand out. If you want to make an impact in the building inspection industry, you should work towards acquiring all the needed certifications in your area of specialization.
Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market. These are some of the certifications you can work towards achieving if you want to run your own home inspection company;
- ICC Building Inspector Certification
- Building Inspection and Certification | Construction | SGS
- Degree or Diploma in Estate Management or Related Courses
Please note that you cannot successfully run a home inspection company in the United States and in most countries of the world without acquiring professional certifications and business license even if you have adequate experience cum background in the home inspection cum real estate industry.
List of Legal Documents You Need to Run a Home Inspection Business
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own home inspection business in the United States of America;
- Certificate of Incorporation
- Business License (Building Inspection License)
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Contract Document
- Employee Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
Financing Your Home Inspection Business
If you have plans to start a home inspection service on a small scale and basically operating from your home or from a shared office, then you may not have any need to source for startup capital. But if you have plans to start the business with a big bang, then you may have need to go source for funds.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your home inspection business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Source for soft loans from your family members and your friends
Choosing a Suitable Location for a Home Inspection Business
In business, it cannot be overemphasized that the location you chose to start your business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where there are high real estate activities and household with the required purchasing power and lifestyle.
Before choosing a location for your home inspection business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
Starting a Home Inspection Business – Technical and Manpower Details
On the average, there are no special technology or equipment needed to run a home inspection company but you will definitely need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of an office facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard home inspection company with plans to have corporate clients all across major cities in the United States of America, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Building Inspectors, Sales and Marketing, Accountant, and Customer Service Executive. On the average, you will need a minimum of 3 to 6 key staff members to run a small – scale but standard home inspection company.
The Business Services Process Involved in the Home Inspection Business
On the average, the way home inspection companies work varies from one company to another company, but ideally, a home inspection company is expected to first and foremost build a robust company profile before biding for home inspection contracts from top clients/corporate organizations; it will give them edge amongst their competitors.
When a client contacts home inspection company to help them inspect a home, they agree on a price and what is expected of them. The next step is for the home inspection company to deploy professional home inspectors to carry out the job and once the inspection is concluded, a detailed report is prepared and handed over to the client in order for them to make an informed decision before purchasing the home.
It is important to state that a home inspection company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated home inspection business process is not cast on stone.
Starting a Home Inspection Business – The Marketing Plan
- Marketing ideas and Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a home inspection business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for building inspection industry. People and organizations will hire your services if they know that they are going to get value for their money.
As a matter of fact, your marketing strategy will center on attention to details, reliability, swiftness, safety, pricing, thoroughness, and above all excellent customer service. You should ensure that whenever your customers hire your services, they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your home inspection business;
- Introduce your home inspection company by sending introductory letters alongside your brochure to households, corporate organizations, small scale businesses, medium scale businesses and other key stake holders throughout the city where your home inspection company is located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your services
- Engage in roadshows in targeted business communities from time to time to promote your home inspection business
- Join local home inspection business associations for industry trends and tips
- Join local chambers of commerce and industry with the aim of marketing your services
- Advertise your business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Factors That Will Help You Get the Right Product Pricing
One key strategy that will help you offer your home inspection services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
Possible Competitive Strategies for Winning your Competitors
The availability of competent and reliable home inspectors under your payroll, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base and ensure that your inspection reports are top notch and trendy. Over and above, ensure that your organization is well positioned, key members of your team are highly reliable and competent and can favorably compete with the some of the best in the home inspection industry.
Strategies to Boost Your Home Inspection Business Brand Awareness and Create Your Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity.
If your intention of starting a home inspection business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening offices all across key cities in the United States and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your home inspection business;
- Place adverts on both print (newspapers and real estate magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your home inspection business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted residential communities to create awareness of your home inspection business
- Distribute your fliers and handbills in target areas
- List your home inspection company in local directories
- Advertise your home inspection company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your home inspection company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo