National Property Inspections, Inc



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“ALL ROADS LEAD TO ROME”

You have undoubtedly heard this centuries-old expression. In Roman times, all roads were built to lead back to the Capitol. Thus, no matter where one started or which road they took, they would end up in Rome. As every business owner soon learns, there is only one road to “profit” and that is through sales and revenue growth. All that follows is to help you grow a bigger and better inspection business and in turn, earn more profit.

STEPS TO SUCCESS

Welcome and thank you for becoming a part of NPI/GPI. By becoming one of our franchisees you have expressed the desire and commitment to build a successful inspection business. Your two weeks in Omaha was the first step and it is exciting to know our business relationship is just beginning.

National Property Inspections, Inc.’s goals for assisting you are consistent with the six steps you must take to become successful:

• To teach you the business of property inspection

• To provide you with inspection training and ongoing support

• To teach you how to find and keep loyal customers

• To teach you how to find and keep loyal employees

• To teach you how to grow your business

• To teach you how to earn a profit

Take a moment and reflect upon some of the successful small business owners in your community. They most likely work hard, earn a good living, have offices, have a number of employees, have repeat customers, have a good reputation, etc. Make this pledge and issue yourself this challenge: “If they can do it, I can do it.”

Most of those business owners did not have the training, support and coaching behind them that you now have. For over 20 years, we have considered ourselves a family. We care about your success. As an independently owned and operated business you are in business for yourself, but you are not by yourself. National Property Inspections, Inc. is here to guide you, support you, and share with you the things it takes to build a successful inspection business. Though even with our help, you must ultimately build your own business. We can never do as much for you as you can do for yourself.

ONE PLAYER CAN SCORE POINTS. IT TAKES A TEAM TO WIN

It is possible to operate your franchise and to earn a measured living operating alone. However; operating alone leads to lost opportunities, makes it more difficult to round out your business, leads to less free time with your family and makes it very difficult to build a business that can be “sold” when you retire or otherwise leave the business. Working alone builds an upside down pyramid and requires a sustained balancing act.

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Your NPI/GPI franchise affords you the opportunity to offer numerous inspection services to a diversified client base. This is an opportunity to build an inspection business and not intended to be a “one-man” operation. We are here to coach you along the way and are excited to watch you grow your business.

There is more than one way to do anything, including building an inspections business. You may wish to incorporate many of your ideas into your business planning. Please feel free to do that, though we encourage you not to stray too far from the path we know to be proven.

RESOURCES AVAILABLE TO YOU

You are now acquainted with the Omaha staff, with each person’s job responsibilities and how they might assist you. Please feel free to call upon them. On your NPI/GPI Web site you can access our “Forum.” There you will find an outline for a business plan, information about bankers and business loans, and information about finding, hiring and compensating employees. You will also find information about how to build value and prepare your business for eventual sale. You can post questions and/or otherwise communicate with other franchisees on the Forum. Please utilize this resource.

A MENTAL PICTURES IS WORTH A THOUSAND WORDS (DOLLARS)

Building a business begins with a vision. The following visual exercise helps demonstrate all the things that must be done to build a successful inspection business. It also shows why it’s extremely difficult to do all of the things necessary by yourself.

Imagine a 100 foot piece of rope lying on the floor in front of you. Let the rope symbolize your business. Imagine grasping the rope with both hands in the middle, at either end or anywhere in between. Now extend the rope up over your head. No matter where you grasp the rope, most of it will still be lying on the floor. In short, you can not lift all the rope alone.

Now imagine every few feet of that rope represents an ongoing task that must be done and done well to build a successful inspection business: sales, performing inspections, customer contact and follow up, seeking new opportunities, confirming appointments, returning phone calls, maintaining Web site content, depositing

checks, paying bills, record keeping, etc. No matter how tall you are, you can not “lift” all those tasks by yourself.

Lastly, imagine three or four people holding the ends and middle of the rope. A few people can hold a 100, 200 or even 300 foot piece of rope and none of the “tasks” hit the floor. This demonstrates the point that you can earn some income working alone, but you can not build a business alone.

GRAVITY: SYMBOLIC AND REAL

Gravity is real and ever present. Your rope will lie on the floor indefinitely unless you make the effort to lift it. If you do lift it and inadvertently let it go, it will drop back to the floor.

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Symbolic gravity is just as real, ever present and much harder to overcome. The forces pushing down on your financial well being (rope) are numerous:

• Federal, state, provincial and sales taxes

• Mortgage payments, car payments, credit card payments

• Expenses for food, clothing, medical expenses

• Competitors, changing circumstances, fatigue, etc.

As you can visualize, there are a lot of forces pushing down on your “rope” as you try to build your business. Understanding a problem is the first step to solving it. As you start to build your business, your rope will rise from the floor.

GOOD INTENTIONS ARE NOT ENOUGH

To accomplish your goals, you must put things in perspective. Good intentions will not build a successful inspection business:

• “I hope to start my sales and marketing next month.”

• “I might hire an inspector in a few months.”

“Hope” and “might” are nothing more than wishful thinking. Neither means much and is not likely to become a reality unless you change your perspective.

INTENTIONS REALIZED

If your intentions are to become reality, change your perspective to:

• “I have started my sales and marketing campaigns…”

• “I will hire my first inspector by the end of June, 200_...”

• This is how I will find that inspector...”

• “This is what I am looking for in an inspector…”

• “This is how I will train that inspector…”

• “This is how I will utilize that inspector…”

• “This is how I will compensate that inspector…”

• “This is how much gross profit I expect to earn from that inspector…”

All the above have a lot more meaning and are much more likely to become a reality.

Determination and vision aside, it does not help to work hard on the wrong things and at the wrong time. A thoroughly planned and well executed business strategy is a key to your success. Success can come quicker if you do not make the same mistakes most business owners make.

Competition

At some primal level we are born to compete. Go to a NASCAR race, a football game or hockey match and you will see thousands of fans who paid to be there. And there will be millions more watching on TV. Why? We enjoy the competition. We enjoy watching our children compete in anything from sports to school work. Why to we have “Spelling Bees?” It’s for the competition. We have our pets compete in horse shows, dog shows, etc.

We also compete against ourselves: Runners strive to continually shave a few seconds off their time; swimmers want to do one more lap, at the gym people try and do one more rep on the bench press, etc. Competition is part of our nature. Whether or not the words are actually spoken; we want to be bigger and better than our competition. This is not about being arrogant or egotistical. It’s about the personal satisfaction.

In this race called life, we have no choice about when the race begins. We are already in it. We compete in life everyday…we should not be afraid to compete in business everyday. Strive to be bigger and better than your competition.

Lesson Learned The Hard Way

Most small business owners tend to repeat the same seven “rope-dropping” mistakes. Pointing them out now should help you avoid making the same mistakes:

The business owner tries to find and hire someone just like their self. There is only one you; you will not find another. That does not mean you can not find great employees. It is better to hire someone that complements you and rounds out your skills and experiences. There is an old business adage that says, “You do what you do best, and hire someone to do the rest.” You will find that sage advice.

Most business owners try to hire too cheap. This is arguably the biggest mistake of all. You can not find or expect to keep great employees if you do not pay them well. How much help will an employee be to you if they can not afford a reliable car to drive to work? How negatively does it reflect upon your company if your inspector shows up in a very old, rusted, muffler-less truck? How much productive work will you get from an employee that is overly stressed about the rent or how to buy food?

You can structure their compensation in such a way that they have an opportunity to earn more. In short, the more the company earns, the more they earn. (We have information about finding employees and Excel spreadsheets for calculating compensation on our Forum.)

Most business owners hire too quickly. At first they are reluctant to hire at all. They wait until they are very busy and in desperate need of help. They do not take the time necessary to seek out and consider numerous candidates. The business owner considers hiring the person or persons that happens to call the business owner. Seldom does the business owner initiate the call or actively seek out an employee. When they consider hiring, they do not take the time necessary to get to know each candidate or to fully explain the job, the company, or the tasks the employee is expected to perform.

Because of the sense of urgency, the business owner generally hires the first person that will accept the position at the too-low salary. This is not a formula for success.

Most small business owners fail to properly train their employees. Many hire an employee one week, give them very little training, and consider firing them the very next week. Why? “They are just not catching on.” This is not an employee issue. This is a training issue.

Good employees are first screened by looking for the right attitude and the right aptitude. Beyond that, good employees are not found, they are created. Create good employees by: providing proper training, providing helpful and encouraging feedback and creating an opportunity for them to grow along with the position

(compensate them accordingly). Create good employees by becoming a good boss. Create a good place for them to work.

Your employees can not perform well unless they understand their positions, what’s expected of them, the company and the inspection industry. As their employer, you must provide them with good training and help them develop the skills they will need to help you build your inspection business.

The proper way to train employees is time-tested and scientifically proven:

• Tell them how to do it

• Show them how to do it

• Let them do it

• Watch the results

• Patiently correct their mistakes and give them encouraging feedback

• Recognize them when they do a good job

If you do find and train a good employee, all is for naught if you never give the employee the freedom to do the job. No employee likes to have someone constantly looking over his/her shoulder and constantly second guessing them. Giving an employee conflicting instructions such as, “This is your department and you are fully responsible for all your decisions… but check with me first,” will very quickly lead to an ineffective employee and stymied growth and profitability for your company.

Most small business owners think of employees as an expense rather than an asset. If employees are doing their jobs, they are paying you. As you read on you will see that an office manager/administrative assistant, an inspector, an inspector helper or a sales and marketing person all more than pay for themselves. They are all assets paying you. You are not paying them. (Use our Excel spreadsheets for calculating the benefits of having employees. You will see this to be true.)

Many business owners feel that “No one can do things as well as I can.” Perhaps you are your greatest employee. There is still only one of you. Even great quarterbacks, in order to win, must have a great offensive line, running backs and wide receivers. Further, he needs a great defense to contain the other team’s quarterback. Chances are the quarterback is only great at being a quarterback.

Growing a successful inspection business entails bringing on a staff. If you continue to do everything by yourself, it will eventually lead to burn out, you will earn less money and the business will be less enjoyable.

GROWING A SUCCESSFUL INSPECTION BUSINESS

Your NPI/GPI franchise affords you the opportunity to build a well-rounded, non-seasonal and recession resistant business. This begins with understanding the business you are in. This means understanding when, why and what type of inspections a bank or insurance company might need. This means understanding what clients and what type of inspections CPA’s or real estate attorneys might refer to you. This means understanding the other types of inspections you might provide, who needs them, when and why (e.g. expert witness testimony.) Once you understand what clients need, you will better understand how to approach the decision makers and show them you know how to help solve their problems. In doing so, you will likely see more repeat business from them.

Building a successful inspection business also means understanding how the overall economy relates to you your business:

• What does it mean when interest rates go up or down?

• What does it mean when there are more or fewer houses on the market?

• What does it mean when sellers are receiving multiple offers?

• What does it mean when commercial vacancy rates are up or down?

• What does it mean if energy audits become mandatory?

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As you now know, there are easily 20 or more inspection related services that you might provide. The more you know about each of those services and the more of those services you can provide, the more successful you will be. In addition to the inspections you might offer now, National Property Inspections, Inc. is constantly looking for new and additional opportunities, as you should also be doing in your individual market.

A sound business strategy is to grow and to diversify your business. This means to grow both vertically and laterally. An example of growing vertically is for your company to perform more of a given type of inspection, for example, more home inspections. An example of growing laterally is to continually add additional types of inspection services, such as energy evaluations, infra red scans, etc.

Growth aside, the importance of rounding out your business can not be over emphasized. A suggested initial target for rounding out your business would be: 1/3 of your income from residential inspections, 1/3 from commercial inspections, 1/3 from field service and specialty inspections (radon, WETT, septic, energy evaluations, infra red scans, etc.)

The advantage to you of building a well diversified business is:

• It increases the number of repeat customers

• It allows for more and sustained growth

• It increases your profitability

• It increases the overall value of your business

• Growth in pride and personal satisfaction for a job well done

• It provides more free time to spend with your family.

TIME MANAGEMENT

A lost or missing camera can be replaced…time lost can not. Time is your most important commodity and needs to be managed carefully. If you constantly feel rushed or as though important things are not getting done, it likely means you are not managing your time well or you are simply trying to do too much by yourself. This can quickly lead to fatigue, stress or not capitalizing on opportunities.

As you hire employees, assign them some of the tasks you have been doing. As you grow, you need to free yourself to where you are working on the business and not in the business. An important daily exercise is to find a quiet spot and spend 10 to 15 uninterrupted minutes simply thinking about your business: what you are working on, what you need to work on, etc. For consistency sake, we suggest you do this at either the beginning of or end of each day. If you can not find the time or are too fatigued, you certainly need help and/or better allocation of your time.

As your business grows, the suggested allocation of your time in the long-term is:

• 1/3 of your time on sales, marketing and seeking new opportunities

• 1/3 on customer service

• 1/3 finding and training good employees

BUILDING A BUSINESS IS A PROCESS

As you mortar each brick in place, they start to form a wall. Each planned step you take and each process you put in place begins to form your inspection business. Building an inspection business is a multi-step process. Take a quick assessment of where you are at present:

• You have researched the inspection industry

• You have chosen to be part of NPI/GPI and are now part of something bigger

• You have had your initial training in Omaha

• You have a support staff in Omaha to assist and guide you

• You have the knowledge and experience of the other franchisees to draw from

• You have learned about numerous and various inspection opportunities

• You have learned where and how to find customers

• You have now completed your “To Do List” upon returning from Omaha

What is your next step?

• We suggest the next step be to hire your first employee and to hire this first employee within 30 to 60 days of returning from Omaha.

Without the first employee, you can quickly get too busy to grow your business. Once the first employee is fully trained, give them some of the tasks you have been doing. This enables you to concentrate on customer service, seeking new customers and finding and training the next employee.

YOUR FIRST EMPLOYEE

In the property inspection business, we strongly suggest your first employee be an administrative assistant/office manager. In many ways, running the office is the hardest and most important part of growing your business.

Here is a partial list of the important tasks an administrative assistant/office manager can do for you:

• Seek out and sign you up with countless field service companies

• Accept and schedule assignments

• “Up-sale” additional/add on inspections

• “Map” daily route in the most time efficient manner

• Find and book sales presentation opportunities

• Find and book continuing education opportunities at agent’s offices

• Accompany you on presentations

• Perform some field service inspections for you

• Assign and track field service inspections, supervise subcontractors, etc.

• Track and schedule retrieval of radon monitors

• Track and pay or collect payments from subcontractors

• E-mail your monthly newsletter to list of contacts

• Update your Web site

• Compile databases of Builders, Realtors, CPA’s, Bankers and Mortgage companies, etc.

For more information on hiring an administrative assistant/office manager, refer to “Administrative Assistant” on page 18.

TIME TO HIRE THE SECOND EMPLOYEE: WHO’S NEXT?

The next logical hire would be either:

• An inspector helper to assist you, or to assist the inspector(s) you hire

• An inspector(s)

• Someone to perform field service inspections (Does not need technical skills)

• A marketing/sales person

We will make suggestions for when and why to hire in the following paragraphs.

Inspector Helper

We encourage you to build a well rounded business and to hire inspectors with varying skill sets. For the sake of the following example we will focus on home inspections. An experienced inspector can perform three home inspections in a single day. Though profitable, that can be a long and tiring day. Is it possible for an inspector to perform five or more home inspections in a single day: not only earning more money, but also being less tired? Yes it is.

As you will soon learn, there is a considerable amount of time and effort involved in meeting the client, getting the pre-inspection agreement signed, getting your tools, ladders, etc. from your truck, gaining access to the roof or attic, starting the dishwasher, etc.. There is also time involved in putting away your tools and tidying up after yourself at the end of the inspection. And of course, there is considerable time and effort involved in writing the report. All the aforementioned can easily add 45 minutes to one hour to the inspection.

A good inspector helper can save you the same 45 minutes to one hour by doing those tasks for you. In writing the report for example, wear headsets and tell the inspector helper what to type while you, or the inspector you hire, perform the inspection. By the time you are finished with the inspection, the inspection report will be typed and ready for delivery. Further, imagine the efficient use of your time by having your inspector helper drive to the next inspection while you return phone calls, e-mail, etc.

As the saying goes, time is money. Consider the above scenario: If an experienced inspector can perform three home inspections per day at an average of 2 ½ hours per inspection, that is 7 ½ hours. If the average cost per inspection is $350, the gross profit is $1,050 for the day. (Don’t forget the fatigue factor of working alone.) If an inspector helper saves 1 hour per inspection, the average inspection time will be 1 ½ hours. Five inspections per day multiplied by 1 ½ hours each equals 7 ½ hours. Five inspections multiplied by $350 is a gross profit of $1,750 for the day.

Here is a quick recap: An experienced inspector worked alone and grossed $1,050 for the day. Or this same inspector worked with a helper and grossed $1,750 for the day. If you paid an inspector helper $200 for the day, that leaves you a gross profit of $1,550, which is an additional gross profit of $500 per day. This is a perfect example of how employees pay you, you do not pay them.

Quick question: If you paid an inspector helper $200.00 per day ($52,000 annually) and they did not have to drive their own vehicle, etc., would you have any difficulty in finding good helpers? Not likely.

For more information on hiring an inspector helper, refer to “Inspector Helper” on page 21.

Hiring an Inspector(s)

One of the primary reasons franchisees have given for not hiring inspectors is, “I don’t want to train a competitor.” That could be true for any business: an insurance agency, a carpet cleaning business, lawn care, etc. If everyone felt that way, no business would ever hire anyone and no business would ever grow. Rest assured, National Property Inspections, Inc. does not want you to train a competitor either.

Before we continue, let’s discuss the concern of creating a competitor. First you should consider there are a lot of people who do not want the “headaches” of running a business and do not enjoy sales, marketing, etc. Many people like steady hours and a steady paycheck.

For you to have trained a competitor, the connotation is that this employee/competitor left your business. Let’s start with the basics. In most cases, people do not leave companies, they leave bosses. If you provide the following things, they have no reason to leave:

• A good opportunity

• Good training

• Good feedback

• Good income potential

• A good work environment

• Perhaps, most importantly, make sure you are a good boss

Even if you enjoy doing inspections yourself, you will still need help. Every inspection you turn down because you were too busy, too tired, you were sick or on vacation, is money lost. It also greatly increases the chances that the client will call your competitor, and not you, the next time. Your client might discover something they did not know before, such as, “Hey, Joe Competitor is a nice guy and got the job done. Let’s refer him next time.” This can lead to a slow death for your business.

Every additional inspection that your hired inspector performs puts money in your pocket. If you charge $350 for a home inspection and you pay your inspector one half of the fee ($175), that is a gross profit of $175 for each additional home inspection performed.

If the inspector works alone and performs three home inspections for the day, that is a gross profit to you of $525. If the inspector has a helper and you pay the helper $40 per inspection, the gross profit per inspection is $135. As a team, if they perform five home inspections for the day, the gross profit to you is $675. (Note: Once again both the inspector and the inspector helper paid you. You did not pay them.)

For more information on hiring an inspector, refer to “Hiring an Inspector(s)” on page 24.

Marketing vs. Sales

There is an adage that says, “There are only two times when you need a marketing and sales staff: when you need more business and when you don’t.” Imagine you own an auto body repair shop and you have no cars to work on…you need more sales. Imagine you have 20 damaged cars sitting in your lot waiting to be repaired. Unless additional cars come in while those 20 cars are repaired, you will soon and effectively be out of business...Thus, even with a parking lot full of damaged cars, you need more sales. Your Sales efforts must be ongoing.

Before we discuss hiring a marketing or sales person, let us first make the distinction between marketing and sales. Many business owners use the terms “marketing” and “sales” interchangeably. However; they are two very different things and each must be thoroughly understood and equally balanced to build a successful business.

Marketing is all the things you do to raise the profile of your company. Marketing is what you do to reach and persuade perspective clients or referral sources to utilize your services. Marketing incidentally includes/encompasses advertising.

National Property Inspections, Inc. has outlined a marketing plan for you. This is one we know to be proven, well-reasoned and time-tested. You may wish to tweak it, but in any case it must be implemented and consistently worked to be effective.

Here are 10 examples of marketing as it relates to an inspection business:

• Getting the word out about NPI/GPI and the services it provides

• Creating a perception of your company: its long history, nationwide network, great technical support, onsite report, free limited warranty, etc.

• Showing customers you care about them through flexible scheduling, providing information and materials they can use, easy to contact, willing to answer questions

• Establishing a professional Web site

• Establishing a “Google” ad words campaign

• Putting signage on your vehicle

• E-mailing your monthly newsletter to your client list

• Sponsoring a hole and displaying a banner at an agent’s golf outing

• A direct mail campaign, such as our Builders warrant mailings

• Having someone distribute flyers, promotional items e.g., note pads and pens

The above listed 10 marketing strategies begin the process but does not book the inspection or secure the referral source. Imagine receiving this phone call, “I was just looking at your Web site. I see that you do commercial inspections. My partners and I are buying an office building and need an inspection”….or, “My wife and I are buying a house and our agent gave us the names of five inspectors to call…” At this point, your marketing campaign has done its job. It got your phone to ring. Now you must use your sales skills to book the inspection. Every day, thousands of businesses receive similar calls and do not close the sale. The owners or their employees lack sales skills.

“Sales” is asking for business: if you don’t ask, you don’t get. The NPI/GPI sales effort is based upon relationship building. You are not asking your referral sources to purchase anything, sign anything or commit to anything. You are simply asking for the opportunity to introduce your services and to earn their business. You are simply asking for the opportunity to supply them with the information they need and therefore solve some of their problems. That makes your sales effort much easier than someone’s that involves selling products, leasing equipment or signing long-term contracts.

The sales process consists of interpersonal interaction, such as the above mentioned phone call. Sales are mainly one-on-one meetings. Here are some additional examples of sales as they pertain to your inspection business:

• Calling agents, bankers, real estate attorneys, etc., and asking for appointments

• Walking into businesses unannounced and asking to speak to someone

• Going to networking meetings, introducing oneself and asking for referrals

• Completing an inspection and asking your client to pass your card along

• Asking someone you know, or do not know, to introduce you to a potential client

• Anything that engages you and your potential client or referral sources on a personal level and not at a distance

• Follow up and follow through

Most new business owners have never been directly involved in sales. Some mistakenly believe a successful marketing campaign is all that is needed. That is not the case. Every company needs a sales staff and some on-going sales training. Remember the example of the phone call above. Whoever answers your phone must be able to “close the sale” or book the inspection. That person needs some sales skills/sales training.

Many business owners are pleasantly surprised to learn they enjoy sales. In any case, either you or someone you hire must pick up the sales torch or your business will die a slow death.

Market Positioning

Before your marketing/sales representative embarks upon their quest, ask yourself:

• Why should someone use your company?

• Should customers pay more to use your company?

• How do you differ from your competitors?

• Does your company have the best inspectors?

• Does your company provide the best service?

• Is your company large enough and flexible enough to work customers in on short notice?

• Are you giving customers a reason to use your services?

Once you answer the above seven questions, you can decide where you wish to position your company within the industry. There are generally three ways to position your company:

• Quality: Rolls Royce or Mercedes Benz are examples of premium automobiles

• Service: Geico Insurance consistently ranks high is customer service and satisfaction

• Lowest price: Wal-Mart and Big Lots compete on lowest price

You, your sales staff and all your employees should clearly understand where you have positioned your company. National Property Inspections, Inc. suggests you never compete on lowest price. We suggest you position yourself to compete on best service and best quality.

If you wish to charge more, you must give your customers more or give them something extra. In terms of service, you can give more by:

• Delivering onsite reports

• Explaining your inspection report

• Explaining features about the property (heat pumps, for example)

• Answering questions

Give them extra value by:

• Including helpful photos and suggestions for improvements, repairs, etc.

• Offering the free limited warranty

• Providing useful information about some component of the property, such as information about commercial chillers or membrane roofs.

Hiring a Marketing/Sales Person

A lot of the things your company does will raise its profile (marketing). And every employee should receive some basic sales training (how to book and up-sale the inspection or ask for referrals). But even though these things help the sales and marketing effort, you must still have someone whose primary responsibility is sales

and marketing. There must be someone actively promoting your business, making face-to-face contacts, asking for referrals and seeking new inspection related opportunities. This must be done on an ongoing basis or your company will have limited growth and profitability.

As with all employees, take the time and effort to seek out and interview numerous potential candidates to fill your sales/marketing position. Explain your company, the services you provide, the industry, the contacts they need to make and the people they need to call upon. Anyone can e-mail your newsletter or distribute flyers, pens, scratchpads, etc. Make sure this person understands their duties includes cold calling, networking and actively seeking and asking for referrals. They must be actively seeking new inspection related contacts and opportunities.

Some NPI/GPI franchisees enjoy doing their own sales and marketing. Many feel it is a lot more fun than climbing ladders. However; there is a cautionary note about you doing all of your company’s sales and marketing. Even if you enjoy it, you must first make sure you devote enough time and effort to sales to make your efforts a success.

You can hire someone to do your sales/marketing on a full or part-time basis. A full-time basis is always better. However; a good sales person that makes a concerted effort 9 a.m. to 3 p.m. daily can make a big difference in your business. A competent sales person working part time should generate enough business to keep a number of inspectors busy. There lies the opportunity to grow your business and increase your profitability.

As shown above, a good sales/marketing person pays you, you do not pay them. How you might structure his/her compensation warrants consideration. We do not suggest a straight hourly wage. This can take away the incentive to make cold calls, etc. We do not suggest compensation based solely on commission. It takes time to make contacts and for those contacts to start paying off. Your sales person should not have to wait to start earning some income.

We suggest an hourly wage of $10 to $12 per hour, plus a modest fee for every sales presentation they make, networking meeting they attend, etc. Much of their compensation should come from commissions. We suggest you pay him/her commission on the “increase” in business you see after they come on board.

You will need to factor in the gas they burn, lunches they might buy, etc. This can be factored into the commission rate and/or reimbursed separately. We suggest you reimburse them separately via an expense account. This helps verify how many luncheon meetings they had, and that they don’t keep taking the same people to lunch, etc.

Training a Marketing/Sales Person

Just as you must train your inspectors, you must also train your sales staff. Many small business owners feel that if a sales person knows how to sell, either by phone or dropping in unannounced, there is no training necessary: “Here are your new business cards and some brochures…go for it.” This is not effective.

In addition to sales skills, a sales person must:

• Understand how much you want to grow

• Know the sales and volume targets for each facet of the business

• Understand your vision for the company

• Understand your company’s history

• Know what makes your company different

• Know the skills, experience and training of your inspectors

• Be familiar with different inspection services you provide

• Know how you compare to your competitors

• Be familiar with your pricing structure and how it compares to the industry

• Understand how you currently generate business

• Understand from whom you currently receive referrals

• Be expected to make a specified number of new contacts each month

* If your sales person does not have the aforementioned information, it is unlikely you will hit your sales or profit goals.

What Sales Are Not

Before we list specific tasks for your sales person to perform, take a moment to consider what sales are not:

• Sales is not waiting for the phone to ring

• Sales is not leaving a single phone message and hoping someone will call back

• Sales is not e-mailing someone a brochure and price list, hoping they will call

• Sales is not giving customers the lowest price hoping they will call

Tasks for a Sales Person

A sales strategy is generating a sufficient number of inspections/opportunities to maintain your sales revenue goals. Establish revenue goals and a minimum number of contacts, personal visits, etc. for all the various inspection related services your company provides.

Specific sales tasks would include:

• Proactively contacting existing and prior customers and asking for referrals

• Proactively contacting by phone and in person, a targeted list of potential customers

• Spending face time with customers and potential customers

• Asking for the business a second, third or fourth time

• Promptly following up on every lead

• Attending open houses and asking for referrals

• Attending Board of Realtor meetings and asking for referrals

• Attending weekly networking groups (BNI, etc.) and asking for referrals

• Asking existing contacts to make introductions to targeted people

• Contacting/negotiating referral arrangements and referrals fees with subcontractors

• Asking friends, neighbors, relatives or other business contacts to help arrange meetings or introductions

• Periodically going to see and thank customers

• Inviting customers for coffee, to lunch, ball games, etc.

Require a weekly sales activity report. This weekly report should include details of the past weeks activities and a brief description of the following week’s planned activities. Once each month, this activity report should include charts/graphs, etc. that depicts actual sales (inspections) growth compared to targeted growth, by type of inspection.

For more information on hiring a marketing/sales representative, refer to “Marketing/Sales Rep” on page 27.

CUSTOMER RETENTION

Customer retention is the lifeblood of a service business. You must have a base of loyal customers that continually refer you business. Showing up on time, being professional and courteous, doing a good inspection, promptly returning phone calls, etc., are all givens. People like to work with those they know, like and trust. How do you build like and trust?

Let’s first address the client that appears to be a “one-time” customer. Suppose someone found your Web site, happened to notice the signage on your truck or discovered you through some other random means. Further suppose they have you inspect an office building they plan to occupy for 20 years.

After the inspection, why invest any more time or effort with this customer?

• Because they have friends, neighbors and relatives that might be buying properties or could utilize your services

• Because at some future date they might buy a second location

• Because at some point they may need an energy audit

• Because at some point they may need consultation or problems solving, etc.

This client would not necessitate a high level of contact but some, perhaps every six months to a year. For example, perhaps in your inspection report you noted their flat roof was in marginal condition and nearing its design life. Perhaps one year after the inspection you send them some useful information on membrane roofs, or you simply stop in to say hello. You may discover they are rapidly outgrowing the building and will be looking for another, etc.

Your core group of ongoing referral sources might include:

• Real estate attorneys

• Mortgage Bankers

• Agents

• Investors

• CPA’s

• Insurance Companies

• Relocation Companies

• Members of your BNI or other networking groups

• Field service companies

• Arbitration, mediation and expert witness services

*Prior customers pass along your name and number, though are not considered ongoing.

The aforementioned 10 categories of referral sources could represent dozens of individuals. Most small business owners soon take their referral sources for granted. Once they get busy, they simply feel they don’t have the time. Know this: Someone else is soliciting these same people. You best make the time.

Granted, it takes a concerted effort to stay in contact with dozens of individuals and to somehow thank them. However; it’s absolutely necessary to build loyalty and long-term relationships. As the owner you must be directly involved in this process, though you can use your sales and marketing staff to help.

What are the essential elements of building loyalty and establishing long-term working relationships between you and your referral sources?

• First know, if you want to keep your customers go seen them every six to eight weeks

• Trust and loyalty are built over time and primarily face to face

• If referral sources are in another state, phone calls allow for some interpersonal interaction

• Building trust is helped along with frequency of contact...out of sight…out of mind

• Trust and loyalty start with a sincere “thank you” phone call or written note

• Trust and loyalty building starts with a sincere effort to try and solve some of their problems

• Trust and loyalty start with supplying them with information or materials they might use

HIRING CONSIDERATIONS AND RAMPING UP

Appreciate and make a concerted effort to keep all your ongoing referral sources. If your sales and marketing staff are doing their job, you should keep adding to the list. Thus, you business will grow.

A competent sales and marketing person should generate enough business to keep a number of inspectors busy. Thus, be prepared to hire additional inspectors and inspector helpers to keep up with the increase in business. And as mentioned above seek out these individuals before you actually need them. Never hire in haste.

EMPLOYEE RETENTION

Finding, training and keeping good employees are essential. As a matter of pride, it is sometimes hard for business owners to understand employees do not leave companies. They leave bosses and they leave situations. Learn to be a good boss. Provide them with a good opportunity and a good place to work. Let them know they are appreciated.

A fundamental mistake many small business owners make is to label their employees “subcontractors.” If you control this person’s work schedule, how they do their job, etc., they will likely meet the definition of “employee” and should be treated accordingly. Ask your CPA or attorney for guidance in this area.

The reasons business owners give for wanting to consider these individuals “subcontractors” and not “employees” are:

• “I don’t want the hassle of withholding taxes.”

• “I don’t want the added expense of work-comp insurance.”

• “I don’t want to pay for his/her vacations.”

• “I don’t want to pay unemployment, etc., if I let them go.”

Perhaps without realizing it, here are the unspoken words you are saying to these individuals:

• “You are not my employee, but I expect you to represent NPI/GPI and not yourself.”

• “You are not my employee, but you can not compete with me now or later.”

• “I want you to work hard and help me build my business.”

• “I expect your undying loyalty.”

• “Should you discover additional inspection opportunities, turn them over to me.”

• “I do not think enough of you to call you my employee and I want to be able to cut you loose in a heart beat if things don’t work out.”

Reflect on the above for a moment. How much loyalty would you feel and how hard would you work to help this person build their business? If you want good employees you have to treat them with respect and dignity. Let them know how much you appreciate them. Good employees are assets not liabilities.

WORKING WITH SUBCONTRACTORS

There are valid circumstances for working with subcontractors. This is not to be confused with the above referenced. For example, if you have the opportunity to inspect a commercial building and it has a large and complicated HVAC system, you should subcontract that portion of the inspection.

Any area in which you or your employees lack the expertise, you could subcontract to someone professional and reliable. It is appropriate to ask for a referral fee. Requesting a 10 percent to 20 percent referral fee would not be unreasonable. Or simply marking up their fees by 10 percent to 20 percent would not be unreasonable.

Working with professional subcontractors (check their references, insurance, etc.) allows you to offer more services and to offer “one-stop” shopping. Here’s a quick list of potential inspections to be subcontracted, if you or your inspectors can not perform them:

• Commercial: electrical, plumbing, roofing, HVAC inspections

• Infrared scans

• Radon testing

• Termite inspections

• Pool inspections

• Energy Audits

It is best to establish good and long term working relationships with subcontractors. Do not look for the cheapest subcontractor every time the occasion arises. If you expect long-term loyalty, you must give the same.

AN OFFICE

An office gives a business an identity. It raises the aura of professionalism and removes the inherent limitations for growth associated with working from one’s home. It is a professional environment in which to hold meetings with your staff, to provide training, etc.

Consider weekly meetings with your staff essential. Share with them the company’s goals, how close you are to meeting those goals, how they can each help, etc. Let them know you are a team and everyone’s best effort is needed and appreciated.

A small office in an executive suite is sufficient and is an excellent choice. A space of 10 feet by 15 feet could be big enough to start. Here are several advantages of locating your office in an executive suite:

• It’s an automatic form of advertising

• You will get acquainted with a lot of other small business owners

• Their clients (coming and going) will automatically see you trucks, signage, etc.

• These offices are inexpensive

• They offer short term leases

• If you need more space, you simply relocate within the same building

• It gives you and your employees the mental distinction between “work” and “home”

• If you want to be a business you need to look and act like one

NPI/GPI’S ANNUAL MEETNIG IN OMAHA

Attending NPI/GPI’s Annual Meeting each November is very important in attaining your sales and growth strategies. Although you will talk to Omaha on an ongoing basis and you can communicate with other franchisees through the “Forum,” there is no way to capture the excitement and enthusiasm of all the other franchisees that are also building theirs businesses, without your being there. Besides the meeting, the agenda and the various speakers, much is learned from associating with the other franchisees. Don’t miss the opportunity to learn from them. And please do not deny them the opportunity to meet and learn from you. You have friends and share a kinship with other franchisees all across the U.S. and Canada. Indirectly, you all depend on and benefit from each other.

ADDED INCENTIVE TO GROW

National Property Inspections, Inc. wants to see you grow and prosper. Admittedly, we depend on royalties and the more you earn, the more we earn. Above and beyond that, we take great pride in watching your accomplishments and the sooner you exceed $100,000 in revenues in a given year, the sooner your royalty percentage drops to 6 percent for the remainder of that year. That is an added incentive for you, and though a temporary reduction in earnings for us, it can be a matter of pride for both of us. We hope to see you paying that 6 percent royalty sooner and sooner each year.

WHY A BUSINESS GROWS: ITS UNSEEN NATURE

We have given you numerous and proven strategies for how to grow your business. It is also crucial to understand the powerful, intrinsic and unseen nature of why a business grows. To maximize your success, you must understand and fully appreciate these “unseen aspects” of your inspection business.

We suggest home inspections be only a part of your well-rounded business. However; for ease of example, we will use home inspection to illustrate the following point. Imagine your business did two additional home inspections on any given day. What is the value of doing those two additional inspections? Collecting the additional inspection fees? Yes, of course the fees are great. However; there is a much bigger “unseen” and “intangible value” in performing those two inspections:

• Meeting two additional buyers

• Meeting two additional sellers

• Working with two additional buyer’s agents

• Working with two additional seller’s agents

• Two additional sets of neighbors (saw your truck and took note)

• Two additional bankers/title insurance companies might have seen your report

Note how many people you might come in contact with during each additional inspection. Some of those people will use you again and/or refer you to friends, neighbors, relatives, etc. The value of those future inspections exceeds the value of the inspection you just performed. In banking this is called “compounding.” In economics, it is called the “multiplier effect.” This is one of the fundamental reasons why the firms that do more inspections, do more inspections. This is one of the fundamental reasons why a multi-inspector firm is a multi-inspector firm. Growing your business, above and beyond any additional profits you might earn, is a sound and necessary business strategy.

If they can do it, you can do it.

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DECIDING ON YOUR FIRST EMPLOYEE

In many ways, running your office is the hardest and most important part of growing your business. A well run office makes a business a business and is the key to your success.

We strongly encourage you to hire an administrative assistant/office manager as your first employee and to do so within thirty to sixty after returning from Omaha. What follows is a partial list of the tasks this person could perform, the benefits derived and how you might wish to compensate this person.

The benefits of having an administrative assistant/office manager:

• Can seek out and sign up with countless field service companies (companies& resume on web)

• Can accept and schedule assignments

• Will book numerous inspections that you would have lost because you could not get back to the people in time

• Can call the day before and confirm appointments

• Can map daily route in most time efficient manner

• Can invoice, upload and forward field service inspections

• Can up-sell add on services: radon, termite, pool, etc.

• Can find and book sales presentation opportunities

• Can find and book continuing education opportunities at agents’ offices

• Can perform some field service assignments

• Can assign and track field service inspections, done by employees or subcontractors

• Can make deposits, pay bills, etc. (Credit card info on forum, can add logos onto his site)

• Can call and collect accounts receivables

• Can track and retrieve radon monitors, etc.

• Can track and collect or pay subcontractors

• Can organize open houses and “Survival Kits”(ride along to organize, encourage him and take notes)

• Can accompany you on presentations (car wash tickets, collect bus. Cards before & draw for winner)

• Can send thank you cards (handwritten personal notes make a statement)

• Can send out the monthly newsletter (on web, enter e-mail, arrives personalized, ready to forward)

• Can explain pre-inspection agreement/scope of inspection (prelisting promo ideas & tools on web)

• Can send holiday cards (can order through NPI)

• Can look for competitive quotes for auto insurance, E & O insurance, etc.(more info on web forum)

• Can field your calls (for sick days, vacations, etc.)

• Can compile database of builders, agents, CPA’s, bankers, mortgage companies, etc.

• Can track sales and marketing data: What’s working, what’s not, new home warranty mailings, etc.

• Can update/post coupons to Web site, encourage customers to log on and “review” your service

• Can order your supplies, business cards, etc. ( or )

• Can help look for and screen inspectors, inspector helpers, sales and marketing person

• Can help you find competent subcontractors

• Can blog or track blogs for you (Luke’s tips on net networking are available in web library)

• Gate keeper to help protect your time

• Can give you more free time to be with your family

How to find an administrative assistant

An administrative assistant or office manager has traditionally been one of the easier positions to fill. This position will naturally appeal to a lot of people. This position will be especially appealing to moms wanting to work 9 a.m. to 3 p.m. daily. And those hours could be well suited for your needs.

A limited amount of advertising should generate plenty of interest in the position. Further, make some inquires with friends, neighbors and relatives. This should also generate a lot of interest in the position.

In any case, consider numerous candidates. Interview them more than once. Check their resume, work experience and references. Make sure they fully understand your business, the tasks you will ask them to perform, how they will be compensated, etc.

How to compensate an administrative assistant

• Straight salary of $12 to $15 per hour (dependent on area)

• Hourly plus a fee for every presentation booked

• Hourly plus a fee for every add on inspection sold

• Hourly plus a fee for every field service inspection they schedule for you, do themselves or schedule with a subcontractor

• Hourly plus fee for new business they secure

Scenario #1:

Cost for administrative assistant:

30 hours per week @ $12 per hour = $360.00

A 2 to 3 hour home inspection = $375.00

Would you be willing to invest 2 to 3 hours of your time performing a home inspection if it paid for an executive assistant who worked 30 hours per week? This is a tremendous payback for a small investment of time.

Scenario #2:

This administrative assistant/office manager will certainly book inspections that you would have lost because you could not get back to the people in time. Booking one extra inspection per week pays for them.

Scenario #3:

If this person up-sells additional or “add-on inspections” they have paid for themselves

Scenario #4:

If this person schedules an employee or subcontractor that performs 40 to 50 drive-by inspections a day (at a profit of $2 each), they pay for themselves.

SUMMARY

The above four scenarios shows how this person does in fact, pay for themselves. Any additional tasks they

perform for you are arguably free!

Tools/NPI Resources

Some of the NPI/GPI resources this person might utilize include:

• Tracking tools

• Call sheets

• Personalized flyers

• Track networking events

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An inspector helper is an important position to fill. He/she can save you or your inspector(s) time and effort. And as the following scenarios clearly show, they more than pay for themselves.

WHERE TO FIND A HELPER

An inspector helper can be male or female and of any working age. And since they do not need a great deal of construction related experience, they are easier to find. You can advertise the job opening in the paper, post it on job forums or ask your friends, neighbors and relatives for names. You might also post the opening at various colleges. Many college students work two or more days a week.

In any case, interview more than one candidate. Get to know them and check their references. Make sure they understand your company and the tasks they will be asked to compete, their compensation, etc.

REQUIRED SKILLS

An inspector helper does not need a lot of technical experience. The things you will have them do can be leaned very quickly. An inspector helper does need the right attitude, a professional appearance, be energetic and enthusiastic. Beyond that, if you take the time to train them, they will very quickly be an asset to your company.

TASKS PERFORMED

The actual tasks you have this individual perform can be expanded upon or changed as the daily schedule might require. What follows are merely suggestions and refer mostly to home inspections for ease of example.

Before the inspection, the helper can:

• Get the tools, ladders, drop cloths, etc. from the truck

• Set up the ladders, gain access to the roof, attic and/or crawl space

• Remove electrical and furnace access panels for inspection

• Start dishwasher

During the inspection, you or your inspector may also ask the helper to perform some or all of the following:

• Test ceiling fans

• Test lights, outlets, GFCI’s

• Open windows to check operation, condition of screens, etc.

• Run water in all fixtures and check flow, pressure and for leaks

* The biggest contribution could be to have the helper type the inspection report while the inspector performs the inspection. This is easily facilitated by both the helper and inspector wearing headsets and the helper types while the inspector talks. Conversely, the helper can use the inspection report form and inspection software as a tool to guide the inspector through the inspection. This facilitates a thorough and efficient inspection with very little backtracking or double checking.

AFTER THE INSPECTION

While you or your inspector is visiting with the clients, explaining the report or answering their questions, the helper could be:

• Replacing electrical and furnace access panels

• Closing access to attic and or crawl space

• Tidying up after the inspection

• Returning tools, ladders, etc. to the truck

ADDITIONAL TASKS/BENEFITS

The inspector helper can also provide these additional or bonus tasks:

• Drive to the next inspection allowing you or your inspector to return phone calls, email, etc.

• Perform various field service inspections by themselves

• Provide assistance during winterizations, property preservation, lock changes, etc.

• Track and retrieve radon monitors, etc.

• Accompany you during marketing/presentations (so your company does not look like “a one-man operation”)

• Explain pre-inspection agreement, scope of inspection

• Field calls (for sick days, vacations, etc.)

HOW TO COMPENSATE AN INSPECTOR HELPER

• Straight salary is not recommended, however if it is your desire to pay a helper hourly, we suggest a rate of at least $18 to $20/hour (dependent on area)

• An hourly rate of approximately $10/hour plus $20 for each home inspection in which they assist

• No hourly and a straight commission of $40 for each home inspection in which they assist

• An hourly rate of approximately $10/hour plus a percentage (25 percent to 50 percent) of each field service inspection they complete

COMPENSATION SCENARIOS 1-4:

Because of the added effort and gained efficiency (time saved), assume the inspector helper allowed you or your inspector to perform two additional home inspections per day at an average fee of $350. (Additional revenue for the day is $700)

Additional revenue for the day $700.00

Pay helper for 8 hours @ $20 per hour $160.00-

Additional gross profit for the day $540.00

Additional revenue for the day $700.00

Pay helper for 8 hours @ $10 per hour $ 80.00-

Pay helper $20 for each additional home inspection $ 40.00-

Additional gross profit for the day $ 580.00

Additional revenue for the day $700.00

Pay helper for two additional home inspections @ $40 each $200.00

(plus the three others for the day 5 total)

Additional gross profit for the day due to helpers efforts $500.00

Additional revenue for the day with helper doing all

field service. (40 field service @ $12 each) $480.00

Pay helper for 8 hours @ $10 per hour $ 80.00

Pay helper half of field service fees (they use their car and gas) $ 240.00

Additional gross profit for the day due to helpers efforts $160.00

SUMMARY

The above four scenarios show how an inspector helper more than pays for themselves. They pay you, you do not pay them. We suggest you begin your search and hire the first one within 60 to 90 days of returning from Omaha.

[pic] Hopefully you enjoy doing some inspections yourself. Even so, you will need the help of other professional and well trained property inspectors. There is a limit to how many inspection you can do, even with a helper. And if you do have a helper, and you are sick or on vacation; will you ask your helper to stay home and not get paid? Chances are he/she will not stay with you long under those circumstances.

Working alone, consider how many inspections and how much revenue will be lost because you were sick, on vacation, too busy, too tired or too slow to get back to someone. More importantly, imagine the long term impact of one of your loyal referral sources being forced to use one of your competitors and then discovering they like working with that competitor. It is just good business to have other fully-trained inspectors on staff.

As a business owner and long-term, you are more valuable working on the business and not in the business.

WHERE TO FIND AN INSPECTOR(S)

As with all employees, we suggest you consider numerous possible candidates before you choose and not to wait until you are so busy that you are tempted to hire the first candidate you find. We suggest you begin the search early.

There are numerous possible ways to find candidates:

• Networking among your business and personal contacts

• The people working counter sales at: electrical, plumbing, and HVAC supply houses

• The counter sales people at lumber yards

• New home builders and remodelers

• Architectural and engineering firms

• Employees working at Home Depot, Lowes, etc.

• Firemen and Policemen (many have small contracting businesses on the side)

• High school shop teachers (most are/were contractors)

• Mechanical contractors or framing contractors

• Advertising in the paper or posting the position online are also options

• Competitor’s inspector? (*Approaching a competitor’s inspector and trying to solicit them away would be considered bad form. However; if one of the competitor’s inspectors hears about your opening and approaches you, then it would not be bad form to consider them. Perhaps they are simply not happy and/or are not treated well where they are. And perhaps they did not sign a non-compete agreement. If you should consider this inspector, check them out thoroughly. Just because they are working as an inspector does not mean they are trained, professional, hard-working, etc.*)

TRAINING AN INSPECTOR

You have the option of hiring experienced inspectors or finding and training your own. Should you decide to train your own, there are a number of options:

• You may send them to Omaha for training

• You may have them ride with you, and you spend the time necessary to train them

• There are numerous correspondence courses available

• There are numerous training courses and “exams” online

• There are various related training courses available through community colleges

• There are sometimes inspection training facilities locally

• You could consider a combination of the above

In any case, set out and require your inspectors to obtain a certain amount of “continuing education” each year.

* We suggest you require your inspector(s) to pay for the cost of training, and then allow them the opportunity to earn gradual reimbursement based on certain timelines and production levels.

Back to choosing inspectors for a moment, interview more than one candidate. Get to know them and check their references. Make sure they understand your company and the tasks they will be asked to compete, their compensation, etc.

REQUIRED SKILLS

An “inspector helper” or someone doing field service inspections does not need a lot of technical expertise. However; inspectors do. As your company grows, perhaps your inspectors can specialize and become home inspectors, commercial inspectors, energy auditors, perform infrared scans or other specialized inspections. In the mean time, you need inspectors with fairly broad based knowledge. But in any case, neither you nor your inspectors should undertake inspections in which you are not trained or experienced. Those inspections should be subcontracted to a qualified subcontractor and your company then earns a referral fee.

TASKS PERFORMED

The actual tasks you have your inspector(s) perform can be expanded upon or changed as the daily schedule might require. In previous examples, we have suggested that in doing home inspections your inspector will be much more productive, and it will be much more profitable for your company, if they work with an inspector helper. If you have not done so, please reread those examples.

THE FINANCIAL BENEFITS OF HIRING AN INSPECTOR(S)

We previously discussed how inspectors more than pay for themselves. The financial benefits of having inspector(s) can be measured. The added stress of working alone, earning less money, the time away from your family and all the lost contacts and lost opportunities (because you were too busy) can not be measured. However; these are the things that can make the difference between achieving success or not.

HOW TO COMPENSATE AN INSPECTOR(S)

Your inspector(s) should do various types of inspections. They may have different skill sets, different levels of experience, etc. Thus, their compensation and rate of pay should be adjusted accordingly. What follows are merely examples, adjust the rates and fees as you so wish. For ease of example, the following examples will deal mostly with home inspections:

• Straight salary is not recommended. However; if you desire to pay an inspector hourly, we suggest a rate of at least $40 to $50 per hour (dependent on area and experience)

• An hourly rate of approximately $15/hour plus $125 for each home inspection they perform (alone or with a helper)

• No hourly and a straight commission of 50 percent of the inspection fee (Average of $350 divided by half equals $175) for each home inspection they perform (alone or with a helper)

• Hourly rate of approximately $15 per hour plus a percentage (50 percent) of each field service inspection they complete

INSPECTORS’ VEHICLES

As the inspector should make a professional appearance, so should their vehicles. Their vehicles should be clean, safe, rust free and have the professional NPI/GPI signage displayed.

Though you may offer to reimburse certain vehicle related expenses, the use of their vehicle(s) is generally paid for out of the fees the inspectors earn. In short, they supply the vehicle, gas, etc. (We suggest you offer to pay for the professional signage. That works to your advantage in any number of ways.)

COMPENSATION SCENARIOS 1-5

We have previously demonstrated how your inspectors generate additional revenue (profit) for your company. We have also demonstrated how, working with an “inspector helper,” they become more productive and generate additional income for your company. For ease of example, the following compensation scenarios reflect an “inspector” working alone.

Perform three home inspections a day @ $350 each $1050.00

Pay inspector half of fee. Three inspections @ $175 $525.00-

Gross profit for the day $525.00

Perform three home inspections a day @ $350 $1050.00

Pay inspector for 8 hours @ $50 per hour $ 400.00-

Gross profit for the day $ 580.00

Perform three home inspections a day @ $350 $1050.00

Pay inspector 8 hours @ $15 each $ 120.00

Pay inspector three inspections @ $125 each $ 375.00

Gross profit for the day $ 555.00

Inspector performs a commercial or/specialized inspections

For the day $1,200.00

Pay inspector 8 hours @ $15 $ 120.00

Pay inspector half of the fee $ 600.00

Gross profit for the day $ 480.00

Inspector performs field service (40 field service)

Inspections for the day @ $12 each $480.00

Pay inspector for 8 hours @ $15 per hour $ 120.00

Pay inspector half of field service fees (they use their car and gas) $ 240.00

Gross profit for the day $120.00

SUMMARY

Again, the above five scenarios demonstrate how an inspector(s) pays you. We suggest you begin your search and hire your first inspector within 60 to 90 days of returning from Omaha.

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There is one certainty is business. Nothing happens until someone sells something. Selling expensive phone systems, consulting contracts or long-term leases are not easy. “Sales” that involve getting someone to write a check, sign a contract or make a long-term commitment are difficult indeed.

AN INSPECTION COMPANY’S MARKETING/SALES EFFORTS

Fortunately your marketing/sales efforts do not involve asking anyone to write a check, sign a contract or make long-term commitments. Therefore by comparison, your marketing and sales efforts are much easier to pursue and much easier to affect.

Without over simplifying, your sales efforts involve:

• Making new acquaintances

• Persuading those acquaintances to use/refer your services

• Staying in touch with new and old acquaintances

• Building long-term trust and loyalty

• Seeking new opportunities

Because your “sales efforts” are not as difficult as some, it makes finding someone to fill your marketing and sales position easier. It also makes the training of that person easier as well.

IDENTIFYING YOUR MARKETING/SALES PERSON

As the business owner you may enjoy marketing/sales and we encourage you to be involved. However; as we cautioned elsewhere, since you need to concentrate on several aspects of the business, it may be better to consider hiring a marketing/sales representative. As with the other employees, they will more than pay for themselves.

This person can me male or female and of most ages. Should you consider a part-time marketing/sales employee, we suggest they work no less than 9 a.m. to 3 p.m. Monday through Friday.

Some of the traits this person should posses are:

• Personable and articulate

• Self-assured (always some rejection in sales)

• Can think on their feet

• Goal-oriented

• Professional appearance (to include the vehicle they drive)

• Curious and inquisitive (understands your business and the client’s)

• A problem solver

Please review our Forum for further information concerning interview techniques, sample interview questions, etc. Make sure this person fully understands the job, what will be expected of them, who they are to call on, etc. Then ask this person, “Do you want this job?” If they answer, “It sounds like fun” or “I think I would be good at it,” do not hire this person. What you need to hear is, “Yes, I want this job.”

FINDING AND CHECKING THE BACKGROUND OF A MARKETING/SALES REPRESENTATIVE

This person could be an agent, mortgage banker, a working mom, someone in insurance sales or simply a person with the right attitude and aptitude.

A limited amount of advertising should generate plenty of interest in the position. This can be in the local paper, online, etc. Make additional inquiries with your network of friends, neighbors and relatives. Describe the person you are looking for and the tasks they will be performing. Your personal contacts may have names to pass along. And of course repeat the exercise with your network of business contacts.

Consider numerous candidates and interview them more than once. Initial impressions change. Verify their resume and work experience.

Narrow your choice down to two or three candidates. If possible, talk to their references in person. First describe the position and the tasks involved. Then say this: “This is a very important decision for me. Would you hire this person for this job?” Listening carefully to their words, and if possible reading their body language, can help assure you choose the best candidate.

TRAINING A MARKETING/SALES REPRESENTATIVE

Even if this person has sales experience, do not send them into the field or have them make any solicitation calls for at least a week. They should spend this time with you, your inspectors and your administrative assistant.

They need to better understand:

• The nature and history of your business

• The types of inspection services you offer (let them ride with inspectors)

• The fees that you charge and how they compare with your competitors

• Where you have positioned your company within the market place

• How you are different from your competitors

• Where you presently get business

• How much you wish to grow

• The training and experience of your inspectors

• Who they are expected to call upon, and those individuals respective needs

• Review your Web site in order to compare it with competitor’s sites, etc.

• How many cold calls, by phone and in person, they are expected to make a week

• How many networking groups they are to join, how many lunches they are to buy, etc.

• Their pay and compensation structure, and how achieving certain goals can increase their pay

A week is a short time and thus their training and feedback should be ongoing. To feel a kinship with you, your business, and your other employees, your marketing and sales representative needs to spend time with you collectively.

THE REFERRAL SOURCES THEY ARE TO CALL UPON

Hopefully you and/or your administrative assistant/office manager have already built a data base of your referral sources past and preset. Working with your marketing/sales representative can also build a list of targeted referral sources. They would include:

• Real estate attorneys

• Bankers

• Agents

• Investors

• Relocation companies

• Property Managers

• Field service companies

• Arbitration and mediation services (for expert witness services)

• Targeted subcontractors for referring inspections and collecting referral fees

• New sources and opportunities

TASKS PERFORMED BY MARKETING/SALES REPRESENTATIVE

Your marketing/sales representative can spend some time emailing your monthly newsletter, dropping off flyers, scratch pads, etc. However; they should understand most of their job is to have personal interaction with past, present and future referral sources. This is done by:

• Phone

• In person

• Cold calling

• Attending networking meetings and asking for referrals

• Buying occasional lunches

• Inviting referrals sources to ball games, etc.

• Attending your weekly staff meeting

TRACKING/MEASURE THEIR PERFORMANCE

You as the business owner should set realistic goals and time lines for growing your business by type of inspection service. Set a targeted number of contacts by phone and in person, your sales representative is to make each week, how many lunches they are to buy, how many breakfast meetings they should arrange, how many networking meetings they should attend, etc. As the business owner, it is important that you also attend some of these meetings, luncheons, etc.

As mentioned elsewhere, we suggest you strive to build a well-rounded business. A mid-term target is to receive your business from numerous referral sources: past, present and new. Also, your mid-term revenue targets might be as follows: 1/3 of your revenue from residential inspections, 1/3 from commercial inspections, and 1/3 from field service and specialty inspections.

We suggest your sales representative submit a weekly activity report, recapping the past weeks events, and touch upon the next week’s planned activities. In addition, we suggest you and/or your marketing/sales representative track and chart your sales goals and discuss them at your weekly employee meetings

COMPENSATING A MARKETING/SALES REPRESENATIVE

We do not recommend paying your marketing/sales representative a straight hourly wage. This would be a disincentive to making cold calls. Likewise, we do not recommend you pay them straight commission. It takes time and effort to establish new contacts and for those contacts to start paying off.

We suggest your marketing/sales representative be compensated with some combination of the following:

• An hourly compensation of $10 to $14 per hour (depending on area)

• A good faith $2 to $5 for each cold call (by phone) made in which an appointment to meet was set

• A good faith $10 to $20 for each cold call made in person in which an actual “contact” occurred with a potential referral source

• A good faith $10 to $15 for each follow up meeting with a potential referral source which occurred as a result of a previously placed phone call (cold call)

• A good faith $5 to $10 for each networking meeting attended

• A percentage of the “increase” in business you see from their efforts (4 percent to 6 percent)

• Reimbursement of lunches purchased, ball game tickets, etc.

• Some type of “bonus” incentive**

As previously mentioned, a good marketing/sales representative should more than pay for themselves, and should keep a number of inspectors busy.

Payment Scenario # 1:

Establish goals for the “increase” in business you wish to see from this individual effort’s, how fast you want to grow and if they are to work full-time, part-time, etc. The following are merely examples. Thus, insert your own numbers and forecasts in the following scenarios:

Projected “increase” in annual sales: $250,000 to $400,000

• Hourly wage (9 a.m. to 3 p.m., Monday through Friday) @ $10 = $300

• Cold calls by phone, appointment set 5 @ $5 = $25

• Cold call in person, contact established 4 @ $15 = $60

• Follow up meeting as a result of previous phone contact 2 @ $15 = $30

• Network meetings attended 2 @ $10 = $20

• Weekly “increase” in business due to their efforts 4 percent @ $5,000 = $ 200

➢ Total weekly compensation paid $635

Additional weekly revenue generated $5,000

Less weekly compensation paid to marketing/sales rep. $635

Net weekly sales revenue after paying marketing/sales rep $4,365

Payment Scenario # 2:

Use different rates for compensation and different estimated sales growth from Scenario # 1 above. The following are examples. Once again, insert your own numbers and forecasts in the following scenario.

Projected “increase” in annual sales: $300,000 to $500,000

• Hourly wage (9 a.m. to 3 p.m., Monday through Friday) @ $12= $360.00

• Cold call by phone, appointment set 10 @ $5.00= $ 50.00

• Cold call in person, contact established 5 @ $20.00= $100.00

• Network meetings attended 3 @ $15.00= $ 45.00

• Weekly “increase” in business due to their efforts 5 percent @ $7,500.00= $ 375.00

• Total weekly compensation paid $930.00

Additional weekly revenue generated $7,500.00

Less weekly compensation paid to marketing/sales rep. $930.00

Net weekly sales revenue after paying marketing/sales rep $6,570.00

SUMMARY

As the above scenarios show, a good marketing/sales representative could earn approximately $50,000 annually, working part-time. This possibility should appeal to a lot of people. Further, as the scenarios show they more than pay for themselves and they should keep a number of inspectors busy. Best of all, they are paying you, you are not paying them.

Lastly, we suggest you implement an ambitious though attainable sales “bonus” program. They more they earn, the more you earn.

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