Hi everyone, I have recently been certified through InterNACHI, and have been looking into starting my own home inspection company. I was wondering if anybody had any tips or insights on any prerequisites that should be done before doing my first inspection, such when to file as an LLC, or any other tax/legal requirements. Also, is it looked down upon for a new inspector to start his/her own business before gaining extensive experience in the field working for somebody else? Any advice is much appreciated!
Field training, for me, was essential (thank you, Sir Roy Lewis). Talk to a CPA about llc, s-corp, sole proprietorship, etc… Attorney to look over your agreements. A business course could be helpful, if you’ve never been self employed. Insurance, marketing, further study, the list goes on…
The first thing you should do is check to see if you’re required to be licensed in the state you plan to inspect in. If not, I would recommend an inspection course, the one I took many years ago had information on and courses about setting up an inspection business and getting a CPA is IMO the only way to go, how to advertise and get business, how to perform an inspection and form and build a process to follow, courses on structure, mechanicals, plumbing, electric, report writing, etc.
The actual process of inspecting houses for compensation IMO should be done only after you have everything else in place, education and knowledge on what you’re doing, business set up, E&O insurance, report writing software, etc. For me it took me 6 months and 18K to get my business up and running over 18 years ago.
After you’re set and ready do a couple of practice inspections on your house and friends houses to get set up and form an idea of how you want it to flow.
Write a business plan. More than 50% of all small businesses fail within five years. More than 20% fail within their first year. Survival rates of those who prepare a well thought out comprehensive business plan are double that of those who don’t.
Read through various inspector forums and you will see inspectors asking how much they should charge for inspections and questions about things such as marketing after they have already started doing inspections. Those questions are a dead giveaway that the inspector didn’t prepare a proper business plan.
Some small business owners only write a plan when they are seeking funding. You should make a plan even if no one other than you ever looks at it.
Preparing a comprehensive business plan forces you to think through all aspects of your business. If you have never prepared a business plan, it would be worthwhile to take a class. Community colleges and universities often offer classes in preparing a business plan through their continuing education departments.
There’s nothing wrong with going to forums to get ideas, but you need to talk professionals such as lawyers and accountants when deciding on a business structure. Talk to insurance professionals about insurance. Identify your target market and how you will fit within that market. Develop an advertising strategy. Decide what kinds of inspections you want to do and which you don’t want to do.
A good business plan isn’t something etched in stone. It’s a living document that should be revisited often and revised as needed as your business matures and grows.
