Sixty percent of new home inspectors never get off the ground. Surprised? That estimate aligns with many experienced professionals in the industry from educators to home inspection business owners. The problem isn’t that the industry is too difficult or unfair. It’s that people entering the industry don’t always have a realistic idea about what it’s really like.
If sixty percent fail, then forty percent take off. What do they know that you might not? Here are 4 things they either avoided altogether or they conquered along the way.
#4: Liability Claims and No Insurance
What’s a surefire way to close up shop before you really get off the ground? Go into the one inspection industry with little or no insurance. According to a Working RE interview with Millionaire Inspector Community president, Mike Crow, all that it takes is one major claim without insufficient insurance to sink a fledgling home inspection business.
Home inspectors need two kinds of insurance: liability coverage and errors and omissions coverage. Liability protects you against claims if you cause damage on the job. If you drop a ladder off the front porch and it lands on the homeowner’s Jaguar, you’re covered. Errors and omissions or E&O protect you against a lawsuit if you overlook a defect. If you miss a major structural defect that costs the buyer a pretty penny, E&O saves the day. Without insurance, you’ll come out of pocket.
#3: Lack of Business Skills & Education
Just because you know your stuff about homes doesn’t mean you know business. There’s a lot more to home inspecting than inspecting homes. In some ways, the office side of the job is more time-consuming and demanding than the work that inspectors do in the field.
Thirty-year home inspecting veteran, Dan Bowers, tells Working RE that many home inspectors go under because they aren’t prepared to build a business from the ground up. Without business skills, your business won’t grow. You might also have difficulty keeping track of expenses and taxes.
#2: Not Enough Money to Sustain You in the Early Days
As with any new business, you need capital to sustain you through the leanest early days. Without it, you’ll spend up all of your savings. In many cases, that’s enough to encourage home inspectors to throw in the towel.
Bowers explains that too many inspectors are “under-capitalized.” If you quit your job and dive into a home inspection business without the capital to sustain you until clients start rolling in more regularly, you may find yourself back on the job hunt. Your new business might never really have a chance to develop.
#1: Underestimating the Importance of Marketing
Crow tells Working RE, “80 percent of inspectors who fail do so because of poor marketing.” If you don’t know how to make the phone ring, clients won’t come and your business will wither on the vine. If you can make the phone ring, he says, “you can overcome just about everything else.”
Marketing needs to be consistent and inspectors should be persistent. Your new business isn’t like a glider that can fly once it’s off the ground. It’s more like a prop plane that requires active participation. Successes are great but consistent marketing keeps business rolling in. Slack off and so will your workload.
Home inspecting entails much more than performing inspections and filling out reports. Your business is first and foremost a business. You need at least some capital, business skills and marketing savvy to make it really work.
Fortunately, ICA School gives students a strong and solid foundation. Unlike many home inspecting educational programs, ours includes business, law, and marketing. If you’re thinking about becoming a home inspector, go into it with your eyes open. Success is possible for every student. The key is approaching it like a real business because that’s exactly what it is.
Enroll now with ICA School and launch your new career.