Get better clients. If we stop to think about it, this simple three-word sentence should be the ultimate goal for anyone running a small business. Better clients offer many different benefits for the small business owner. Better clients are easier to deal with in our business. Better clients force us to produce a better product. But, arguably the most important reason for working with better clients is that they are willing to pay more to get that better product.
For professional home inspectors, unless we’re willing to branch out and start hiring employees (which may or may not be a good decision for us), we are limited to the number of home inspections we can do every day. There’s only so many hours of daylight each day. Depending on how big a territory we serve, what type of houses we inspect and how thorough of an inspection we perform, most of us are limited to doing 2 or 3 inspections in a day. So, as a small business owner, we’re faced with a problem. We’d like to increase our revenue, but we’re running a race against the clock. Eventually we all must face the fact that we can only create so much revenue from our business.
This revelation can be quite disheartening and leaves us with very few options to earn more money. If we’re committed to remaining a one-man (or one-woman) show, there are a limited number of things that we can do to accomplish this task. The main way that we can grow our overall revenue is to increase the revenue from each individual inspection.
Basically, there are only two ways to boost our per-inspection revenue. The first would be to increase the number of services that we offer to our clients. In theory, offering more options for our clients to choose from can provide us with more opportunities to earn revenue, but there can be some obstacles to taking this route. The more things we’re doing on each individual inspection, the more time we’re going to be spending at each house. If each inspection is taking us longer to complete, this could lead us to reduce the number of open inspection slots available each day. Offering more services also means that we’re purchasing extra equipment, going through additional training (to learn how to operate our new equipment) and increasing our overall liability, as we’re now adding more chances that something could go wrong.
It can be argued that a better way to increase our per-inspection revenue would be to increase the price that we charge for our services. But be warned, this approach is not without its own problems; least of which is that we’re not the only home inspector to choose from in our market. Increasing our prices always comes with the risk that we can price ourselves out of the market. All things being equal, a customer is not going to pay more money for the exact same product. So, without making it blatantly obvious that there’s a benefit to choosing our services over our competitors, it can be difficult to increase our prices in a competitive marketplace.
The question then becomes, how do we provide additional benefit to our clients that would motivate them to pay more for our services?
In order for us to increase our price, we need to do a thorough examination of our client base to find out exactly what type of customer we’re attracting. Just as there are varying levels of quality among home inspectors, there are different sorts of clients available for us to serve. If we’re attracting a base-level client, one that’s not looking for a thorough inspection, but simply getting an inspection because their real estate agent told them they had to, it’s going to be hard for us to increase our prices. A base-level home buyer will quickly move to a cheaper inspector, as they have no sense of the value of a quality home inspection and could care less about how thorough a job we do.
If we’re committed to charging more for our inspections, we must look to increase the value of our product, and in turn, strive to increase the quality of our clients. It may seem like a pipe dream, especially to the inspectors who are used to dealing with base-level clients, but higher-end home inspection customers do exist.
If you’ve been operating as a home inspector for more than a few minutes, you’re well aware that’s there are different levels of quality among real estate agents. Some agents are simply looking for their commission check at the closing, while other agents actually have their clients’ best interests in mind. Conversely, some home buyers are simply looking to check the box that a home inspection was performed, while others are looking for a quality inspection that will enable them to make a more informed purchasing decision.
It seems that when you deal with base-level clients and agents, you tend to have more problems than when you’re doing business with higher-end clients and agents. Base-level customers have no appreciation for the job we do, and therefore have no problem complaining about any little perceived slight.
Those who spend the least and ask for the most before ordering will do the same after the sale.
Timothy Ferriss
Higher-end clients and real estate agents seem to have more appreciation for the job we do as professional home inspectors and are much more appreciative when they receive a quality product. As a result, these clients tend to be more understanding when things go wrong with their house.
So, the question then becomes, how do we increase the quality of our agents and clients? The obvious answer to this question involves first increasing the quality of the product that we offer. We can’t simply announce that we’re going to start working with better quality agents and clients while still offering the same base-line product that we’ve always provided. In order to up the level of our customers, we’ve got to up the level of our product.
How we increase the quality of our inspection is entirely up to us but offering the best product that we can is an essential part of increasing the quality of our client base. If we want more income, and we’d like to have fewer problems in our business and we’d love to be able to enjoy our job much more than we currently do, the answer seems fairly simple.
Be the best; it’s the only market that’s not crowded.
George Whalin
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Thanks, Joe
