COVID-19, Recessions, and Home Inspections
With COVID-19 shutting down most of the country recently, and talk of an unprecedented 30% unemployment rate – a recession has become more real for us. News articles make it seem like the end of the world – but while a recession is a big event, it is also what is considered a normal (even necessary) part of the market cycle. Don’t get me wrong, no one looks forward to a recession this big, but I have survived in the inspection industry through “The Great Recession” and learned a lot about how to recession-proof a home inspection business. In fact, a recession can even help you grow your inspection business and even thrive (as strange as that might sound). So let’s get into it. But before we discuss strategy, let’s understand how a recession has a bearing on how we run our inspection businesses.
What a Recession Really Means for Home Inspection Businesses
When we hear the word “recession”, we all tend to cringe a bit. But a recession is not necessarily a bad thing for the home inspection industry – if you play your cards right. Instead of viewing a recession as a problem – view it as an opportunity. For instance, I carried one of the home inspection companies that I own through The Great
In my market area, there were about 400 licensed inspectors before the last recession (our State posts this information right on their website). After the recession though, there were about 185… That is a huge drop! Over half of the home inspectors in my area gave up and hung up their license. So advantage #1: less competition.
But for me, there were other benefits. First, inspectors were shy for years after that, so there were very few new inspectors for quite some time. – so advantage #2: no new competition for many years after the recession.
Then on top of that, when the market goes down, it tends to become a “buyer’s market”, which is good if you are a very thorough and skilled inspector. For instance, during a seller’s market, there may be 5 buyers for every house. During a seller’s market, buyers may wave their inspections, hire the cheapest inspector, or get whoever is available first so they can move on things. But things move slower in a buyer’s market. There may be 5 houses for every buyer, so the buyers tend to be choosier about their inspectors. buyers and agents who didn’t like how thorough I was before the recession were now calling me to get me on the books because I am
So don’t view a recession as a problem to overcome, but an opportunity to grow, improve your business, and increase your worth in your profession. But let’s talk strategy now. Besides the information above, how can you “recession-proof” your home inspection business?
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How to Recession-Proof Your Home Inspection Company
Below are some of the most important lessons I learned about recession-proofing a home inspection company. I am going
1: Market More – Not Less
One of the first things that a lot of home inspectors do when a recession starts is to turn off their marketing or pull back on it. They do this to save money during tight times, but that is counterintuitive. You should INCREASE your marketing, not decrease it. I will give you two good examples of this.
During the last recession everyone turned off their Adwords, but I turned mine up and spent more money on it. So now I had almost no competition for Adwords and I had a great budget – so guess who got all the online work? Also, I never stopped doing office presentations, lunch and learn sessions, and more. Agents appreciated that I still came around – because other inspectors didn’t want to stop by or buy lunch or anything like that anymore. I built relationships there that are still around today.
Those are just 2 examples out of many. The point is, increase advertising, don’t decrease. You won’t see as much return on interest as you did before the recession a lot of the time, but the seeds of success take time to grow, and it will keep you thriving through a recession.
2: Expand Your Services
This one comes down to numbers. If there are 100 people needing a home inspector in your market, but 20 of them need a septic inspection, 5 need a
Work at expanding your services now. We all have reasons for not adding services – added liability, we don’t want to dig holes and smell the septic tank, the pool course is too long, or whatever it happens to be. But adding services allows you to capture more leads – whether or not there is a recession.
Whatever services you add on, be sure to be qualified and well trained before offering those services to clients.
3: Do More Seller Inspections
When the market is slow, sellers will do anything to make their homes seem more appealing to a buyer. Pre-listing inspections are a great way to do this. The extra nice part is that every seller is an opportunity to do a buyer-side inspection for them as well. So get out there and market pre-listing inspections.
4: Work More than You Want To
I hate saying this because I am of the mentality that you should control your business and you shouldn’t work yourself to death – as that negates all the benefits of owning your own business. But if you do 8 inspections a week now, and the market drops by half, you will be left with 4 inspections a week hypothetically. So sit down and figure out how many inspections you need to do per week and then increase that by whatever is doable.
Obviously, those are just rough numbers, but the point is if you are doing the bare minimum of inspections now, you will likely be under the bare minimum during a recession. So work a little bit more than you want to now, so you can keep afloat later on.
5: Have a Side Gig Ready
This one is simple – get a side gig. Have a contractor buddy? Talk to him about doing some side work. Have a particular skill? Get it ready to use it. I say this because as we mentioned before, over 200 inspectors dropped out of my market area – but why? Why give up a good business because it got slow? Instead, supplement that business until things pick up. Below are some side gigs that a lot of inspectors I know are doing now in preparation:
- Radon mitigation
- Pest control
- Handyman work
- Field inspections
- Cleaning services
You don’t have to pick from that list, but do you see a common theme? low overhead (for the most part) and something that won’t interfere with scheduling home inspections. You don’t want to take a side gig that will make you have to turn down inspections when they come in.
6: Don’t Panic When Things Get Slow
So many people panic. Panicking doesn’t change a situation, it just changes how you address it. An inspector I know panicked once when things got slow for a few months, so he went and found a new job, shut everything down, and told everyone he was out of business… but then when things picked up, he talked about how much he regretted it.
Recessions happen, so don’t panic. If you can hold it together, you will likely be able to make it through fine.
7: Be the Best
We talked about this above, but it’s worth mentioning again. When a recession happens, it typically becomes a “buyer’s market”. With more houses than buyers, buyers become more cautious, take their time, and research inspectors more before they hire them. If you are highly skilled and qualified, you will be their top pick. Low-ballers and fast inspectors don’t do as well in a buyer’s market.
8: Don’t Give Up
Those who stick around are the ones who come out on top. Don’t get discouraged, but adapt. If I did it, then you can too. If you do make it through, your company will be better and busier than ever. So don’t give up.
Recessions come and go every so many
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