Posted by: Kaplan Real Estate Education
Updated: January 15, 2019
There are a number of revenue and expense considerations that a home inspector must be aware of and take into consideration when creating a home inspection business plan. Whether you are a seasoned home inspector or new to the home inspection industry, take the time to consider these questions.
1. How many inspections will you be doing each year?
You should expect somewhere between 1 and 100 in your first year.
2. How much will you be able to charge per inspection?
A good guide would be $100 plus 10 cents per finished square foot house size. You should compare this to your local home inspection competition.
3. What are your start-up costs?
An estimate would be 15% of your 1st year projected sales. Most full time inspectors would shoot for $30,000 is first year sales resulting in $4,500 in startup costs. A good portion of that cost would go towards marketing your business to realtors.
4. What kind of reporting system can you afford?
Inspectors will need reporting systems either written forms or a software system. You should always purchase the best system you can afford. This is what your customers will remember you by. The quality of your report will fast become your best marketing tool. Learn more about our home inspection reporting forms options, we offer the industries best home inspection print forms as well as home inspection software for the tech-savy inspector.
In other words, after you have paid all your expenses how much will be left for your salary and profit. This will vary greatly from inspector to inspector, but most one person inspection companies try to keep these expenses below 30% of sales. That means if 1st year sales are $30,000, you would keep approximately $21,000.
The 3 Key Components to Success in Home Inspection
- You must have a good business plan and the ability to execute it.
- You must have the technical knowledge and skills to do a professional grade inspection.
- You must be able to complete the inspection and accurately communicate your findings to your customer.
To understand what it takes to set up and run a successful home inspection business we have additional resources available such as 'Starting a Home Inspection Business, What is the Financial Opportunity?' and another helpful article '3 Questions to Ask Yourself Before Starting a Home Inspection Career'.
To learn more about becoming a home inspector in your state, simply select your state from the list on the home inspection training landing page.