Build Your Business the Right Way: Focus on the Future

It is always an honor to write for the ASHI Reporter. Over the past 17 years, I have watched it progress and improve every year and all of us as home inspectors and ASHI members have benefited. Those of you who have followed my articles over these past 10 years of contributing know my focus has been on business development. Many members are more technically savvy than I am, but few have focused on the business of home inspection as I have.

Build a prosperous, survivable company

InspectionWorld, our annual conference, is a terrific medium, if used properly, to learn to build a prosperous and survivable home inspection company. Courses have been offered over the years in budgeting, insurance matters, finance and credit, business equipment, marketing, Internet development, and other business subjects. InspectionWorld, besides enhancing technical skills, also enhances the key elements of home inspecting:

1. inspect right,
2. report well,
3. communicate succinctly, and
4. satisfy the needs of your client.

Focusing solely on business, of these key elements, the fourth element, satisfying the needs of our clients, enables us to grow our businesses. The other three elements enable us to keep our businesses. Shawn Carr, of Carson Dunlop, presented a truly outstanding business primer course at InspectionWorld 2005 in Austin, Texas, titled Growing Your Business the Easy Way. He reminded every attendee that there are only three ways to grow our incomes:

1. raise prices,
2. do more work, and
3. offer more services.

Of these three, offering more services is actually the easiest way to increase our gross revenues as home inspectors. Depending on the business cycle, raising prices may not be possible and, if possible, is always scary. Doing more work, for the busy inspector, may also be problematic. There are only 24 hours a day, and three of those are required for sleep.

From bare-bones to infrared

Years ago, our profession was initially barebones home inspecting. But over the years, opportunities presented themselves in other avenues, such as offering expert court testimony, structural consulting and environmental testing. In 1996, President George Bush Sr. and HUD Secretary Jack Kemp pushed through Congress Title X, lead-based paint poison prevention laws, after President Bush’s dog became lead-paint poisoned during White House renovations. Of course, the fact that children throughout the country were also being poisoned by lead paint may have had some impact on Congress.

Lead-paint testing became an opportunity that many home inspectors added to their repertoire.

Homebuyers had other needs besides understanding the lead-based paint condition of their new homes. Radon, septic system inspections and water-quality testing were important aspects of purchasing a home and many home inspectors added these areas of expertise to their offerings.

More recently, as prices of infrared cameras have become more affordable, infrared camera studies of homes have become a new frontier for home inspectors. Suddenly, “visual and accessible” inspections have become more sophisticated. Cameras with flexible necks make areas behind walls penetrable and infrared cameras, looking for temperature differentials, permit inspectors to understand conditions that are totally inaccessible.

Asking the right question

But what is ahead? Tony Robbins and Chet Holmes, two well-known management experts, explain that to get superior answers, it is necessary first to ask the right questions. Home inspectors over the years have asked, “What is the condition of this component?” The focus has been from component to component during an inspection and, in fact, always will be the starting point. However, the question home inspectors should be asking is: “How do these components interact within the overall structure of the home to serve the occupants?”

This question arises when the focus shifts from component inspection to energy utilization by the home. For the past three years, a new area of expertise has developed, known as “Energy Auditing,” which is the study of how the property utilizes, wastes and/or conserves energy. The driving force here is the national priority to reduce energy use, eliminate purchase of foreign oil and to become as energy efficient as possible.

Energy-efficiency industry blooming

The energy-efficiency industry is currently blooming on a national scale. Where federal action is lacking, local jurisdictions and states, together with utility companies, are filling the void. On the federal level, the mandatory cessation of manufacturing of incandescent bulbs in 2014 will change lighting forever, with the switch to CFL and LED bulbs. On the city level, several cities have mandated energy audits with residential sale transactions. Austin and San Francisco lead the way, with the states of Maine and Nevada taking some action in this direction. The next several years will see a continuation of this trend, and home inspectors in these areas should be reading the tea leaves now.

Other initiatives by both local jurisdictions and public utilities are encouraging voluntary action by offering property owners financial incentives to improve the energy performance of their homes. In Montgomery County, Maryland, the electric utility PEPCO will pay $300 of the $400 total audit fee and the owner can get a combination of incentives from PEPCO, Maryland Energy Administration and the county to reimburse 70 percent of the cost of energy improvements. Other states such as Virginia, New Jersey and Pennsylvania have created incentive programs.

There is a message to home inspectors from this trend. The message screams opportunity, opportunity and opportunity! Have you heard the joke about the Irishman praying to the good Lord to win the lottery? After several weeks of failure, God becomes aggravated, visits O’Connor and screams, “O’Connor, meet me half way, buy a ticket.”

Earn two major certifications

Now is clearly the time, if a home inspector has not become proficient in the energy-audit industry, to do so. ASHI is making this possible at InspectionWorld Phoenix by arranging for the Home Energy Team Institute to offer its combination RESNET/BPI certification course in residential energy auditing. The three-day pre-conference course and the online studies offered before the course commences permit each attendee to learn hands-on what energy auditing is all about, take both RESNET written exam and BPI written and field exam leading to both organization’s energy-auditing certifications. You will earn two major certifications.

To begin, become certified as a RESNET Home Energy Survey Professional (HESP). A HESP is credentialed to perform a walk-through assessment of a home’s general energy performance and make general recommendations for improvements or further analysis. Many utility company incentive programs and local municipalities are looking to pluck the low-hanging energy-upgrade fruit without the expense and complexity of comprehensive diagnostic audits and whole-house improvements. For example, the New York City Buildings Department has recognized the RESNET Energy Smart Contractor credential for the program’s general contractor license for 44 one-three family homes, and the Jacksonville Electric Authority is considering the HESP and EnergySmart Contractor credentials as a requirement for participating in programs planned for 2012.

The HESP training also is the first step to becoming a BPI Building Analyst or RESNET HERS Rater. At the same time, you also will earn the BPI Building Analyst certification, with the house-as-a system building science knowledge and an understanding of combustion zone-testing, work scope and prioritization of renovation work.

Certifications put you in the game

With these certifications, the home inspector is in the game. As the industry grows in your area, the business opportunities this new industry offers will become financial engines for enhanced revenue. Become the leader in your area. The person out front is the leader, and everyone else is playing catch-up from the rear. Take advantage of this easy way to become educated, experienced hands-on, certified and proficient in the next great frontier of property analysis.

P.S.
Do not miss InspectionWorld Phoenix this January at the Arizona Biltmore. ASHI is offering us an opportunity to visit one of the most exquisite resort properties in America. Designed by Frank Lloyd Wright, the resort saved his building-block forms and reused them for every new building, so the beautiful architecture is both unique and consistent throughout the resort. During my development career, I headed a development team with a financial institution for acquisition and tax-free bond financing of two garden apartment communities in Phoenix. On my family’s first visit, we stayed at the Arizona Biltmore and arrived after dark. The next morning, my wife opened the drapes of our room, viewed the landscape and exclaimed, “I have died and arrived in heaven.”
The Phoenix area is a wonderful vacation destination.

Christmas Eve day was my 3-year-old son’s first adventure with Santa Claus around the Arizona Biltmore pool, and he screamed from fear of the strange-looking giant in a red suit. Enjoy warm spring weather, eat at fine restaurants, visit Fifth Avenue for the outstanding art galleries, and go to Pinnacle Peak Steakhouse in the hills of Scottsdale, wearing your worst looking tie (you know, the one your wife, girlfriend and mother all hate) and your server will cut it off and staple it onto the wall for posterity. In short, providing an opportunity to stay at the Arizona Biltmore and visit Phoenix, Arizona, is a membership benefit present ASHI is giving us all and should not be missed. (Note: The preceding was an unpaid, but heartfelt advertisement.)