The Importance of Business Succession Planning
ByJulija A.
March 21,2022
Business planning is an essential part of success, but people often forget that it doesn’t end once your enterprise starts doing well. It can be easy to forget about a succession plan when your business is thriving, but it’s in your best interest not to. In this guide, we’ll talk about all the benefits of such a plan and present a checklist that will guide you through the process of business succession planning.
What’s a Business Succession Plan?
A business succession plan is a step-by-step set of instructions on procedures and processes detailing how your business will continue to function if an entrepreneur, business owner, or even a key employee leaves.
It answers questions like who will take over the affairs of the business, how long this succession will take, and which operating processes and procedures will be maintained or changed.
Business owners can create a business succession plan in a number of ways, including engaging the professional services of someone who handles these types of events exclusively.
Who Should Create a Succession Plan?
Entrepreneurs or business owners should always do succession planning for their businesses. A succession plan is mainly considered in the context of a business being sold or the owner retiring. Still, there are other scenarios where a company succession plan can be useful, such as in the event of sickness or untimely death. In a way, you can think of this plan as a sort of a testament for a business, ensuring its best interests are carried out, regardless of what happens.
When Should You Create a Succession Plan?
Just as creating a will is dependent on several factors, making a succession plan needs to consider various business factors, so you can’t rush its creation. That said, the sooner you have at least an outline ready, the better for your business.
Succession plans require a lot of time and effort. This is why many businesses plan for succession well in advance, and business transition planning takes place long before there’s a buyer ready or disaster strikes. Succession plans are contingency plans and should be taken as a way forward for any event in which dramatic changes to the business will occur.
Why Is a Succession Plan Important?
Here are some essential benefits of creating succession plans:
It Protects the Future of Your Business
Bad things can happen to any enterprise, no matter how careful the people running it are. Employees leave, business owners become unable to run their companies, the market becomes hostile, and so forth. How then do you safeguard your business operations from any of these often unforeseen circumstances? That’s where a succession plan comes in. Just like we have various types of insurance to give us cover from mishaps, a succession plan is an insurance policy for your business’s continuity.
It Aids in Identifying the Most Qualified People in Your Company
One of the most important benefits of succession plans is that they allow business owners to see which employees are best suited for the transition. This is a key aspect of succession planning for business owners and plays a key role in the continued success of the company’s operations.
With a succession plan, you get to see which of your employees are most qualified as future leaders. It also helps to narrow down which positions within the company are most critical for its success. It can also shed light on potential vulnerabilities, helping identify and remedy them.
For example, If there are no employees suitable for leadership roles within your organization, you would know to look externally early on. In the same vein, business succession planning is a process that could lead to increased employee retention and motivation, as it lets hardworking members in the organization know that their efforts have been noticed and encourages others to do better.
It Helps Create a Training and Development Structure
Building on the previous point, another benefit of succession planning is fostering an environment friendly to training and development. One other positive thing about identifying leadership prospects is picking out competency gaps and filling them by training your staff.
Professional development can come in many forms, such as mentoring, coaching, giving staff increased responsibilities or even job shadowing. Some positions may require employees to head back to school for further education or certification.
This early tapping on successors puts you and your business ahead of the curve, giving everyone enough time to prepare and build the skills or experience needed in leadership and other roles. It’s an excellent method to consider even before you start thinking about how to transfer business ownership to someone else down the line. It’s also an excellent way to let employees know you are willing to invest in them.
It Maintains the Brand Identity of Your Business
Succession planning helps identify employees that can keep the torch burning within the company and helps ensure that a brand identity built over several years doesn’t get thrown out the door when there’s a change in power. Even when there’s a new boss around, succession plans help ensure nothing crucial changes.
It Puts Extra Eyes on the Job
Succession planning is a company-wide exercise, meaning that you can have junior managers and veteran staff working together on the same tasks. This can help wring out any weaknesses and further finetune processes and operations.
Resources for Succession Planning
Now that we’ve covered why succession plans are essential let’s touch on what resources can aid the process of making one. A business succession planning template is a great way to start getting all your business affairs in order and prepare for the future.
You may need help, and a great place to turn to is your accounting firm. Note, however, that this only applies if they are experienced in succession planning. There are other factors to consider, such as the size of your business and the complexity of its operations. How urgent you need the succession plan is also a consideration. You can choose to hire an accounting firm or bring in temporary professional services (free accounting tools are also an option, but most don’t offer succession planning features).
Here are some succession planning resources you can look to:
PwC
PricewaterhouseCoopers is widely known as one of the Big Four in the accounting industry (alongside KPMG, EY, and Deloitte). The company has an extensive background in succession planning and is a great fit for small businesses as it mainly focuses on smaller privately-owned enterprises.
SCORE
SCORE’s well-developed guide on business succession planning is a fantastic resource. SCORE is one of the largest networks in the world, providing small businesses with access to mentoring. The best part is that as a small business owner, you can ask to be paired with a mentor that’s a perfect match (these business mentors volunteer their assistance). It’s an option you should seriously consider if you require help with succession planning.
Local Accountant
If a local accountant is experienced with succession planning, then they’re a good option to consider as well. You can ask around your network for contacts, try to use your local Chamber of Commerce, any business support groups you know about, or just search for a certified public accountant in the American Institute of Certified Public Accountants directory.
Steps To Creating a Succession Plan
Succession plans can be tough to work on. However, there are some steps you can take to make it easier and create a better succession plan template. Let’s go over them:
Succession Timeline
Succession plans can be split into two types: an exit succession plan and a death-or-accident succession plan. The former covers the transfer of ownership at a specific date, while the latter deals with the event of owner death or disability.
An accident plan can be considered at any time but exit plans should be written when retirement is close by or the owner wishes to leave the business. There should be a specific date in mind when the transfer would take place, and the plan should also indicate whether you would still be involved after the exit or want to be done with the business completely.
Determine Your Successor
Who takes the reins after the business owner’s departure? Many owners hand the reigns over to their families in business succession planning, and children often continue the family business. Sometimes, it is handed over to a business partner or one of its key employees. Other times, the business is outrightly bought by an outsider.
It’s a tough decision, but the successor must be someone that cares about the business and has similar values as the owner. Keeping it within the family is great, but you should bear in mind that most second-generation businesses have a high failure rate. That said, almost a quarter of small businesses fail because they don’t have the right team running the show. This just shows that succession planning is crucial in ensuring that the best people for the job inherit the key responsibilities.
Record and Formalize Your Standard Operating Procedures
Recording your SOPs for future reference is something that every small business owner should do daily. It is beneficial for employees and any future owners. They vary depending on the business, but most SOPs usually include:
- Org Chart
- Operations Manual
- IT Manual
- Employee Handbook
- Training Programs
- Skill Retention Strategies
- Performance Management
- Meeting AgendasEvaluate Your Business
There are many succession planning best practices, but one of the most essential is evaluating your business. How much is your business worth? You should have a rough idea about this at any stage of running your business. Don’t make the mistake of overvaluing your business, though, as it can lead to poor financial planning.
There are various ways to do it, too, from using a business valuation calculator to a professional appraiser. Some companies like Guidant Financial offer valuation services for businesses.
Handling the Finances of Your Succession Plan
Your succession plan must cover how someone will buy your business - by paying a lump sum, purchasing it in installments, using credit facilities, or some other option.
You should also have a buy-sell agreement, a legal document where the buyer agrees to an action that enables them to purchase your business. To draft this agreement, you’ll also need to meet with a legal professional, such as a business succession planning attorney.
Succession plans are typically funded in one of the following three ways:
- Life Insurance: usually more common in family successions. A policy taken out on the business owner can help finance the buyout of the business in the event of death or other events such as owner retirement or disability.
- Acquisition Loan: this is money borrowed from a bank to purchase a business. Typically, a buyer can get about 70% to 80% of the purchase price from a bank or the Small Business Administration (SBA).
- Seller Financing: or installment payments, occurs when the buyer pays for the business gradually after a down payment has been made, usually about 10% or higher.
Final Thoughts
One mistake many make is not reviewing their plans after they’ve been made. Succession planning in business is something that has to be reviewed regularly, and changes sometimes need to be made on the fly.
Succession planning deals with answering difficult questions and dealing with unexpected events. Who takes over, and how if the need arises? Will the new business owner handle things the same way as the old one did? Which employees and positions are essential, and which ones can the business go on without? With our template, answering these questions should be a lot easier. Don’t forget that you can always seek the advice and services of legal and financial experts that have experience in succession planning.
Frequently Asked Questions
How do I write a business succession plan?
Writing a business succession plan isn’t a walk in the park, but with our template that you can find in the article above, it should be a lot easier.
What is the importance of succession planning in a business?
Small business succession planning is essential for the following reasons:
- It safeguards your business
- It helps you identify the most qualified people in your company
- It helps to create a training and development structure
- Your business’s brand identity is maintained
- It puts extra eyes on the job.
What are the stages of succession planning?
There are five typical stages of business succession planning. They are:
- Succession timeline
- Choosing your successor
- Documenting standard operating procedures
- Evaluating your business
- Handling the finances of the succession plan.
About the author
Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.
More From Our Blog
Running a business is expensive, and entrepreneurs are always exploring ways to cut costs. And while some expenses are unavoidable, there are certain processes that you don’t have to spend money on.
For example, all LLCs or corporations are legally required to list a registered agent. When evaluating the most efficient and cost-effective way forward, many business owners ask a simple question: Can I be my own registered agent? The straightforward answer is yes, but it’s important to weigh the pros and cons of being your own agent.
What Is a Registered Agent?
Whether you’re setting up a limited liability company or a corporation, you’ll have to designate a registered agent. This is an individual or an entity tasked with handling all of the legal and government correspondence related to your business.
In other words, registered agents act as a channel through which the state can reach the owner(s) of every registered company. That’s the basic purpose of a registered agent. One scenario where this is especially important is when a business finds itself facing a lawsuit and needs to receive service of process documentation. A registered agent can also assist your business with everything, from legal services covering compliance requirements to mail forwarding.
Without a registered agent to act as a bridge between you and the state, you run the risk of missing filing deadlines or inadvertently failing to respond to lawsuits in a timely manner.
Should You Be Your Own Registered Agent?
We’ve established that it is impossible or rather illegal to run an LLC formation without a registered agent. So, should you become your business’s registered agent, or is it better to go with a professional service?
There are many different types of LLCs, but there is nothing in the law that stops you from becoming your own agent. Simply put, the owner of an LLC is legally permitted to act as a registered agent as long as the business is founded in the same state where the owner lives.
So, it all boils down to individual preferences. To help you make the right decision, here are some of the key advantages and disadvantages of serving as your business’s registered agent:
Pros of Being Your Own Registered Agent
It Helps Your Business Save Money
While employing the services of a professional registered agent isn’t the most expensive thing that your business will spend money on, you won’t be able to use those services free of charge. Serving as your own registered agent is the only sure way to avoid paying for the service. If you’re operating on a tight budget, you’ll certainly appreciate having the option to avoid this cost, which can typically go up to $300 per year.
It Can Be Very Convenient
When business owners are trying to figure out whether they should become their own agent, one of the critical factors to consider is how comfortable they are with this arrangement. If your daily routine already involves being at your business’s office during working hours, then being your own agent wouldn’t cause you any particular inconvenience.
Cons of Being Your Own Registered Agent
Always Be Present at the Physical Location
A major downside of being your business’s registered agent is that you have to be present at the physical location you list during all business hours, typically between 9 a.m. and 5 p.m. from Monday through Friday. This is the only way to ensure that you don’t miss any important and time-sensitive correspondence. Of course, you wouldn’t have to be there during federal holidays.
You Could Miss Important Deliveries
Circling back to an earlier point, it’s important to underscore the immense risk of missing deliveries of legal documents. Being constantly present at the listed location isn’t really possible from a practical standpoint. As such, stepping out for one moment at the wrong time can result in unnecessary inconveniences for your business.
Receiving a Lawsuit at Work
If your business is facing a lawsuit, then service of process documents will be sent to the listed address. Since you’re the business registered agent, you will be served the lawsuit at the relevant location. This can be embarrassing and undermine the credibility of your business if it happens in front of your employees or customers.
The Costs of Fighting Default
If you are not at the registered office when the process server shows up and you fail to receive the notice of the lawsuit on time, your business may face substantial costs for default judgments and lawyer fees. Ultimately, this defeats the purpose of trying to save money by being your own registered agent.
If You Use a Personal Address, It Becomes Public Record
If you are running a small business from your home, then being your own registered agent means your private home address becomes a public record. This can be a serious issue if you’re concerned about your privacy. And even if privacy isn’t your main concern, having both your business and personal affairs tied to the same address can become problematic after a while.
You Will Be Limited to Operating in One State
To become your own registered agent, you’ll need to show proof that you’re a resident in the state where your business operates. This limits your operations to the state that you’re registered in. Unless you’re willing to hire another registered agent, you won’t be able to expand and set up offices in other locations. Every state requires businesses to use a registered agent with a local address.
Should I Hire a Registered Agent Service?
After weighing the pros and cons, it’s clear that it isn’t advisable for business owners to become their own registered agents. This brings us to registered agent services.
First and foremost, hiring a professional service eliminates your exposure to all the aforementioned risks and downsides.
You can focus on running and growing your business, knowing that every legal document is being received and forwarded in a timely manner. When it comes to privacy, registered agents use their official business address, not yours. This means that sensitive information about your physical address is kept private. You also don’t need to make yourself available during working hours and can expand to as many states as you want.
When you're starting your business, it’s perfectly natural to ask: Can I be my own registered agent? But there are many reasons to consider professional registered agents instead of taking this burden onto yourself.
Keeping up with all the compliance requirements set by the state where you’re forming your business can be tasking. A registered agent service can be a big help with things like filing annual reports. The service keeps tabs on your due dates and informs you about approaching deadlines.
The only real downside to hiring a professional agent is the cost. Prices vary, depending on who’s offering the services, but you typically expect to spend around $100 annually.
Further Reading
White Label vs. Private Label: Differences Explained
Opening a Campground: A Step-by-Step Guide
How to Start a Meal Prep Business? A Step-by-Step Guide
Final Thoughts
Whether you choose to act as your own registered agent or go with a professional service is entirely up to you. It’s perfectly legal to do both, but the former isn’t always advisable.
The downsides can outweigh the cost-cutting attempts by small businesses that are operating on a tight budget. So be sure to take a step back and carefully review all your options before appointing yourself as a registered agent.
By Nemanja Vasiljevic ·
March 25,2022
If you love the idea of working in the great outdoors while also helping campers enjoy incredible vacations, opening a campground could be the perfect business opportunity for 2022 and beyond.
Campgrounds and RV parks in the US did take a hit at the start of the pandemic, but the industry has recovered well to jump from a value of $5.48bn in 2020 to $6.32 in 2021. The 2022 forecasts suggest that it will be back up to the pre-pandemic $7.88bn within the next two years, and you can capitalize on their big return by starting your own venture right now.
This guide to campground planning and regulations, as well as daily operations, will help turn that dream into a reality.
Starting a Campground - Why Do It?
There are plenty of reasons to start a campground. Before thinking about land acquisition or marketing efforts, though, you must first do some research.
There are over 4,300 campgrounds throughout the US, which instantly highlights that they appeal to many business owners. Some of the main reasons people decide to get into this industry are:
A better quality of life - when the bulk of your work is spent outdoors and supporting people in their leisurely activities, your mental and physical wellness can soar.
A huge demand - before the pandemic hit, there were over 78 million people camping in the US, and the number kept increasing each year. As the pandemic slowly fades out, we can expect more people than ever to embrace camping and outdoor activities.
Steady returns - while many people think of it as a seasonal business, popular campgrounds attract customers throughout the year.
Post-pandemic suitability - a lot of Americans are traveling domestically once again but are not yet ready for overseas travel. This can boost campground profit margins significantly.
Versatility - campground business owners can adapt many aspects of the venture, from plot size to on-site amenities to reflect their desires.
In short, starting your own campground is an enjoyable business model that puts you in control of your future. When you also consider the prospective financial rewards delivered by a huge potential client base, the appeal isn’t hard to appreciate.
How to Start a Campground
Campground businesses can be profitable, but you must enter the process with a winning strategy. Otherwise, you could experience delays, disruptions, and financial penalties. Following this simple 10 step guide will help you get your business off to a great start:
Step 1: Research Campground Operations
Knowing that you want to build a campground from scratch is a good starting point, but you also need to develop a clear vision of the site you wish to run. Are you looking to attract overnight RV drivers or provide the perfect destination for a camping vacation?
Stats show that six in ten Americans have a newly discovered love of nature, and you can embrace this through a wide range of RV park and campsite ideas. Some of the most popular choices include;
Motorhome only campground
Flyfishing campground
Senior citizens campground
Tent camping only campground
Rafting and watersports campground
Wildlife sanctuary campground
This is just a selection of the options at your disposal. Still, a clear understanding of developing an RV park in your mold can impact everything from profitability to your enjoyment of the work you’ll have to put in.
Step 2: Create a Business Plan
A detailed business plan is a document that can aid in finding funds, gaining the necessary campground licenses, and providing guidance in all aspects of business planning. It is a vital tool for opening a campground venture.
Business plan templates are readily available, including examples specific to this type of business venture. It can include mission statements, financial projections, design plans, and management strategies. Ultimately, it should answer key questions like:
What are the costs of starting the campground?
Who will you aim to sell campsites to?
How much will you charge per night?
What type of activities will you promote?
How many campsites per acre can you fit?
What will the business be called?
A good business plan will also detail logistical aspects, while further preparations will consider the logistical obstacles you may face before and after the launch.
Step 3: Focus on Funding
When working out how to start a trailer park or campground, finding funding will be one of the primary considerations. A $50k ballpark figure (plus any land acquisition costs) is probably accurate for a small LLC in this industry. However, a detailed business plan should provide a clearer insight. Either way, you must ensure that you have enough capital, as a lack of funding is the chief reason why so many startups (campgrounds or otherwise) fail.
Regardless of the cost to build a campground, you will want to consider the following funding options;
Personal funding from your savings
Traditional business bank loans
Investments from private investors
Crowdfunding opportunities
You’ll also need to factor in ongoing costs (we’ll discuss those later). If you can’t raise funds for buying a franchise or opening a campground of your own, the business won’t have a future.
Step 4: Register Your Business Entity
Before you start trading, you must register the business entity. Forming an LLC with minimal state LLC costs is the most prudent choice, not least because it protects you from personal damages should a visitor sue the company.
You will also need a registered agent service, but this is something all good LLC services will provide. Even if you’re looking at how to start a primitive campground that forgoes standard reservation campsites for remote options, letting your customers know that you are ready to open your doors to visitors is vital.
Other steps at this time include registering for taxes, opening a business bank account, and getting a company credit card.
Step 5: Obtain the Necessary Licenses
Licensing is probably one of the first issues you’ll research when looking at how to start an RV park, but it’s also very easy to overlook this once you have got the ball rolling. This industry employs over 50,000 workers and serves millions of guests annually. Sadly, businesses operating without the correct licenses can face huge fines and even closure.
The regulations for opening a campground can vary slightly in different parts of the country. However, you must be sure to comply with or obtain the following;
Federal business licensing requirements, including state permits
State permits and licenses to operate a campground business
A Release of Liability
A Certificate of Occupancy, which includes meeting zonal laws
Even when looking at foreclosed campgrounds or taking on an existing franchise, you must pay attention to the licensing requirements or face the consequences.
Step 6: Find a Location
The location of your campground is unquestionably one of the most significant features that can impact the level of planned bookings and passing trade from RV drivers that need a place to spend the night. For starters, land may cost significantly more or less than the national average of $12,000 per acre, depending on the state you are operating in and some other factors.
The location of your site will also determine, or at least influence a wide range of other related issues, such as:
What activities can be completed on the campground
Whether grants for starting a campground may be available
When you can expect the peak season to be
The demographics of your visitors
You may also find that the location will determine whether it’s possible to start a franchise or not.
Step 7: Build a Brand
Depending on your location, especially when situated between two popular tourist destinations, you may secure some overnight guests due to little more than geography. In most cases, though, establishing a brand that helps your site stand out from the crowd will be a crucial aspect of running your campground business well.
Your first goal is to ensure that you sell a good percentage of your available campsites frequently - don’t worry, even the most popular campgrounds aren’t 100% booked 365 days of the year. However, the strength of your brand may also allow you to charge more. This can be very important as RV camps charge an average of between $25 and $80 per campsite per night, although it is possible to fetch over $200.
Branding elements can range from the campground logo to deciding on your niche audience (families, senior citizens, etc.) Once you have a clear vision of the business you want to be, it’ll guide your web design, offline marketing, and general client interactions.
Step 8: Grow Your Team
Very few businesses can be managed with a single pair of hands. When you own a campground, getting a great team to support you will be essential for its success. With this in mind, knowing your EIN number and making the necessary preparations to legally hire workers will be essential.
You may require a variety of workers, including on-site employees and remote staff members as well as temporary contractors. Some examples include;
Admin staff, including receptionists and customer care teams
Maintenance teams for campsite facilities and amenities
Campground activity leaders, cleaners, and catering teams
Marketing and sales workers
Financial advisors and legal workers
Staffing is one of the most significant ongoing expenses for a campground owner, so this is a key aspect to consider. Besides, when you have confidence in the team, you can maintain a clear mindset.
Step 9: Focus on Amenities
Some permanent campsite ideas are as simple as focusing on the campsites themselves, with not much else on offer. However, most good ideas also rely on the amenities and organized on-site activities for making a profit. The theme of your campsite, as discussed earlier, will determine what works best. Ultimately, it’s about providing unforgettable experiences to your visitors.
Of course, this will impact the expenses, including garbage disposal, payroll, permit renewals, inventory, maintenance on camp vehicles, and more. Likewise, you may need to consider the cost of equipment you hire out (such as fishing equipment).
While some campers look to save as much money as they can while camping, many others will spend a good amount while at your site. If you strategically plan the amenities and how to maximize your earnings, your business will have much higher chances of success.
Step 10: Opening Time
Finally, with all the above steps completed, you will feel ready to open your doors to the public. You’ve registered the business and a real estate LLC while also preparing the campsites, branding elements, and so much more. It may take time before you start to see the percentage of occupied spaces increase, but you can temporarily lower your prices while establishing your company on the market.
Following this, you will need to consider the long-term management and ongoing expenses for a campground. By now, you will have everything in place to run a successful campground business.
Final Words
If opening a campground is a business venture you’ve considered for several years, now is the perfect time to do it. It’s a wholesome business that can improve people’s quality of life while earning you a pretty penny.
By Nemanja Vasiljevic ·
March 16,2022
If working in the real estate arena without becoming a realtor is something you’ve considered, the life of a house inspector could be the perfect solution. It is a job role enjoyed by over 30,000 North Americans, and there is still room for you to join the party.
So, how to become a home inspector? This guide will discuss why you may want to and talk about the procedure of becoming one. Let’s dig in.
Why Would You Want to Become a Home Inspector?
Before researching home inspector training or thinking about how you’ll spend your earnings, you must first consider why you’d want to take this career path. There are many reasons why you may wish to enter the real estate arena with a specific focus on inspecting and surveying houses. Here are some ideas to consider:
Around seven million homes are sold and purchased in the United States each year, and the majority need to be inspected. In other words, there’s a lot of work to be done, so job security is not really a problem.
Home inspectors are needed in every part of the country. A home inspector from California could move to Ohio or Florida and not have much trouble adjusting to the new job.
It’s a versatile job that you can tackle independently or by working for a company.
The building inspectors saw around a 10% increase in revenue in 2021 despite the COVID-19 pandemic, underlining its stability even in harsh times.
As a real estate inspector, you will have the opportunity to help people make their dreams of owning a home come true.
The work is very engaging and offers new challenges each day. It’s no wonder that it appeals to many people wanting a rewarding job that lets you build a successful career without having grueling entry requirements.
How to Become a Home Inspector in Six Easy Steps
Wanting to work in this environment is one thing but taking the proper steps to become a home inspector is entirely different. First and foremost, you should acknowledge that every property inspector must find their own path to success - not least because there are many variables to consider ranging from location to personal finances.
Still, if you follow the steps below, you’ll be off to a great start.
#1. Become a Skilled Home Inspector
As a property inspector, your clients need to have 100% trust in your ability to check the structure, plumbing, and electrical aspects of a home on their behalf. Therefore, completing the relevant home inspector training is essential for proving your capabilities and value, along with developing the necessary skills.
There are dozens of home inspector training courses that you can consider. The ultimate goal is to complete the EBPHI National Home Inspector Examinations, enabling you to gain memberships into organizations such as InterNACHI and earn your Professional Inspector CPI. Each state has its own process, so you should research home inspector qualifications by state. Even so, the fundamental features are the same, so future relocations are unlikely to disrupt your career.
So, how long does it take to become a home inspector? It depends if you want to commit your time fully to this or run it alongside another job until you’re ready to launch the new career. In most cases, you can expect to complete the process in 2-3 months. You should also take the time to find the right software for your home inspections and reporting.
#2. Decide Your Career Path
Completing the right home inspector course should open the door to several career paths. Home inspectors are classified as part of the construction industry by the Bureau of Labor, and many employers may be willing to hire you. According to Indeed, working for a company should yield a salary in the range of around $58,000.
Alternatively, you may find that starting a business is the way to go. Many qualified construction workers will establish their own small businesses and not necessarily need other people for a while. If you can provide a winning service to homebuyers or develop strong connections with landlords and agencies, you’ll be all but guaranteed a steady flow of well-paying work. Taking this approach could enable you to get started within a matter of weeks.
#3. Fund Your Career
Once you’ve gained your home inspector license, you’ll need to get some tools to be able to do your job properly. Thankfully, this is one line of work where you won’t need to make a significant initial outlay. The generic business costs (registrations, liability insurance, marketing materials like a website, etc.) won’t cost a fortune.
House inspector equipment will include a flashlight and an electrical tester for ground-fault circuit interrupter (GFCI) devices. However, you may also use moisture meters, infrared cameras, and tools that allow more comprehensive testing. A vehicle to get to properties and practical items like ladders and PPE safety equipment are also highly useful but not mandatory.
The exact costs will vary from one inspector to the next depending on the path they take and what items they already have. Funding can come from loans (even if you have bad credit), private investment, personal investment, crowdsourcing, soft loans, or grants for startups.
#4. Register the Business
Even if you’re looking to work for another company, it’s likely that you will be a contractor. As such, you’ll need to register yourself as a business. A sole proprietorship is also the best choice for many small businesses in this field, although an LLC may be selected too.
You will need to register a business name and check it against trademarks. At this time, you must also complete other admin tasks. Registering a checking account and your Employer Identification Number (if hiring a workforce) will be the next steps. If you haven’t completed a thorough business plan by now, you really should at this stage.
Your property inspector certification and business registrations will enable you to work, but you should also protect yourself and your business. Public liability insurance and E&O insurance for errors and omissions are all but mandatory, while non-disclosure agreements, copyrights, and trademarks will protect your intellectual property.
#5. Market Yourself
Marketing is one of the most important business skills of all, not least when working in a field that deals with huge financial assets like houses. As such, marketing skills are among the home inspector requirements you mustn’t overlook. If you are looking to work as an employee, you simply need to worry about promoting yourself. A good resume, cover letter, and references to confirm you know the industry will serve you well.
If starting a business, branding will be a lot easier for franchise owners as you can piggyback off the success of the parent company. When starting a business from scratch, though, you will have full control and be able to position yourself within the industry to target a specific niche - whether that’s a demographic or a property type.
Strong marketing tools will lead to smoother lead generation and conversion. A business website, strong logo, business cards, office signage, and PPC can work wonders. A blog or other content marketing streams can prove that you’re an authority in the field too. Professional marketing services can help people hear about you faster if you have the money, but you can also advertise yourself.
#6. Keep Providing a Quality Service
After completing the above steps, you will be ready to start your home inspection career. If you want to build and maintain success, though, there is only one way to do it: keep offering clients exceptional value.
With the right home inspection software or app, you can complete the home inspection process quickly and accurately. Meanwhile, cloud-computing software enables you to provide clear insights and updates throughout the process. Pricing your services in line with the average costs on the market is vital too. Do not undersell yourself, but don’t overvalue your work either, especially not when you’re just starting out.
The great news is that you only need to work with a small number of landlords, developers, or agents to keep your books filled. You may find that admin workers are needed too. As you gain more clients, taking on extra home inspectors may also become necessary.
Further Reading
How To Become an Appraiser
Small Business Banking
Small Business Checking Accounts
Final Words
Now that you know how to become a home inspector, you should have a far better idea of whether it’s the right career path. If it is, completing the right home inspector training alongside business registrations and client scouting should enable you to get started within a matter of weeks.
Thanks to the current state of the housing market, you’ll never be short of opportunities as a contractor or business owner. With the proper steps taken and the right mindset, a successful career is not that hard to achieve.
By Julija A. ·
March 15,2022
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