Robert, the biggest problems I encountered in starting up were that I followed some bad advice regarding pricing. You will hear lots of different opinions on this - all I can give you is my own experience.
I set my prices slightly above the average inspection price in the area when starting. That immediately threw me into competition with a pool of inspectors who could talk the game better than I could (naturally - they each had at least 3 years in the business). I had a good pitch, but not good enough, and I hadn’t done enough inspections to be flawless in my delivery. It was very slow going.
Then, I thought about what the potential clients I got were asking me the most: “How Much?” In thinking about it, I realized that there is a sizable number of people who price shop. The number of price shoppers is huge compared to the “boutique” shoppers who innately equate price with quality.
Guerrilla Marketing recently used a stat that 17% of all people will buy the lowest priced anything, based solely on price if all other aspects seem comparable. The number who will purchase the highest priced whatever (equating price with quality) was less than 1%. So, I set an aggressive price point in the lower end of typical pricing for my area (throwing out the lowballers - guys who were WAY below the norm, the $199 crowd).
Business steadily grew each and every month.
You will see (from the flames that are about to be posted) that pricing is a passionate and personal choice. The most typical counter to this approach is “you get what you pay for” or “you charge what you are worth.”
Both are false, and guilty of standard flaws in logic. The first would indicate that you must always pay more to get more. This is clearly not true. You don’t go to the most expensive gas station in town, do you? When products are equivilent, the lower priced one will be purchased more frequently and represents the better value. (Everyone says they do “the best” job, and you have a limited time to make tyour pitch on the phone, so unless you can identify specific add-ons like Thermal Imaging that a competitor is offering as part of a standard inspection, they are all likley to be deemed equivilent).
The second response (charge what you are worth) is nice rhetoric, but ignores that you are in a competitive market, and starting at a disadvantage. If you can’t sell experience like the more established guys, you need a hook to build market presence. Price can be a bigger and more effective hook than experience. Each inspection you perform introduces you to 4 potnetial sources of future business: The buyer, the seller, the buyer’s Agent, and the listin Agent. Each of these are now people who can send business your way if they are impressed by your work. Every inspection you perform geometrically grows your potential for future business. So, for those who “won’t start their truck for less than $XXX” they not only earn $0 for the day (instead of $25 less than they inisist they are worth), they lose out on 4 potnetial referral sources.
Pricing is powerful stuff. Research it. Evaluate your costs so you know what you need to make. And set your prices where you think they will best serve your business.
