Often touted as the number one key to a company’s success, business plans can help woo banks, secure start-up capital and break into certain home inspection franchises, but do inspectors who run one or two-person companies need them? That depends say veteran inspectors. Here are two seasoned inspectors’ take on writing a business plan.
Rennard Clayton says that his business plan is the reason his company got off the ground. Before starting A+ Inspection Services in Allentown, Pennsylvania nine years ago, Clayton spent four months part-time creating an approximately 15-page plan that outlined estimated salary, expenses and a solid strategy for gaining new business.
“Since I was starting a new venture, I definitely needed something to guide me,” says Clayton. “…Researching the industry was important to me because it helped me set realistic expectations for a salary, decide how much I should spend on marketing, research and talk to other inspectors about their businesses.”
For new inspectors, crunching numbers on how much inspection business exists in your area, what other inspectors are charging, what auxiliary services they’re providing and how you can connect with new clients is invaluable, especially in a housing market that’s still bouncing back. Clayton adds that writing a business plan is especially important in the home inspection industry because work is seasonal.
“A lot of [home inspectors] don’t write a plan because the start-up costs for this industry are minimal,” Clayton explains. “What they [frequently] don’t understand is that there’s a lot of down time during the slower markets. You have to plan for that.”
Clayton says that even nine years after launching the business, he still revisits his original business plan every year to tweak his marketing budgets, analyze his goals and make sure he’s set to tackle the upcoming year.
“It’s easy to get complacent with the home inspection industry because you’re frequently using the same real estate agents and folks over the years. If you don’t continue to go out and meet new people, you can find that your business is [stagnant],” he says. “A plan keeps you on track. It keeps you moving in the right direction.”
For Peter Calabrese, owner of Metroplex Home Inspections, LLC. in Plano, Texas, didn’t feel that it made sense to write a business plan ten years ago when he started his home inspection company.
“The [cost of] education to be a home inspector is through the roof so the last thing on my plate was a business plan. There was no money to do it,” he says. “…It’s nice to have [a business plan], but I’ve operated for along time without it. If you do good, quality work, you really don’t need one.”
While Calabrese didn’t write a formal business plan, he did conduct significant research on what the competitors were charging, what services they were offering and how to conduct a quality inspection before opening his company. His business took off and within two years, he was taking more inspection requests than he could handle.
“Maybe around year three to year five, I should have put a plan in place but I was so busy inspecting that it fell to the back burner,” he says. “…If you’re thinking about adding someone [to the payroll] or asking a bank for funding for additional equipment or vehicles, that’s when a plan would be nice…If you’re going to add people or go after the big companies, you’d better have a plan in place.”
Calabrese says that he doesn’t regret skipping out on a business plan because his company has stayed small. He says that for one-person operations, plans have their limitations. Time could be better spent actually digging up clients.
“There’s nothing out there, business plan wise, that’s going to get you in front of a realtor,” he adds. “If you don’t go out and meet realtors, if you don’t go network, no business plan under the sun is going to be able to do that for you.”