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Home Inspection Business Insights: Current Landscape and Future Trends
Episode 9223rd October 2023 • The Home Inspector Marketing Podcast • Mike Crow
00:00:00 00:26:07

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Davy sits down with Mike Crow to discuss what the home inspection business look like today. Mike touches on what the current demand is for a home inspection, how is that affected by the market, how inspection fees are changing and most importantly what you as a business owner can do to adapt for the future.

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Who is Mike Crow?

Mike Crow is a Marketing and Business Expert who has built and managed multiple 7-figure businesses, including two 7-figure inspection firms.

For the past 15 years, he's coached thousands of other inspection business owners and has personally helped 100+ companies grow to $1,000,000+ in annual revenue. He has also helped multiple single-inspector operations earn 6-figure annual revenues (some surpassing $300,000).

Mike can teach any entrepreneur how to systematize and market their business to achieve their personal and professional goals.

Transcripts

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Hi, this is Mike Crow and I run a home inspection business.

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In fact, I've run a couple of home inspection businesses.

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The true joy for me though, has been helping literally thousands of

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home inspectors build really solid home inspection business as well.

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We can help a single man operation be able to do over $300,000 a year,

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maybe all the way up to $400,000 a year as a single inspector operation.

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Even better for me is the 80 plus companies that we have helped

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be able to build million dollar home inspection businesses.

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I would like to help you be able to do the same thing.

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Hey, I'm Davy Tyburski.

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You may know me as America's Chief Profit Officer.

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And of course, today I have Mike Crow, the father of home inspector marketing.

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Today's topic is home inspection business.

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So we're going to dive into a few questions we've received and also in

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doing some research to really dive into the home inspection business in general.

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So Mike, I'm going to start with a simple question for you is, you

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know, what's the current demand for home inspections in the market?

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And what do you expect to see as far as growth or declines in the near future?

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These are great questions.

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Okay.

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You know, I've been at this since 1985, right?

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Oh, decades, decades, decades.

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Decades.

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And so when I first came into the home inspection business, you

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know, only about 20 percent of people Even new home inspections

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existed and probably 80 percent of those would get a home inspection.

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So, do your calculations based off of that.

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The good news nowadays is that almost everybody has heard about home inspections

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and probably 80 plus percent of them are getting home inspections as well.

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The demand for home inspections is a very interesting question because it really

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depends on the marketplace a little bit.

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It depends on, you know, if it's a really heavy seller's market.

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People are bypassing their inspection, and we see some people in the last several

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years, and we'll see it again in the future, where people are going, Oh, no,

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no, I, I, I, I will waive my inspection so I get a chance to live in this home, okay?

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80 plus percent of those people regret that, okay?

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And it's a, it's a very interesting thing.

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And then we get to the other side, where, you know, when it's a buyer's

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market, everybody's really thinking about the home inspection and getting it.

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And...

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When I was in the early 85s, 90s even, you know, the question was,

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do I get a home inspection or do I not get a home inspection?

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Nowadays, the question is...

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Who do I use for my home inspection?

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And why do I choose that person?

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So, the current demand for home inspections in the

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marketplace is really good.

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It's very solid.

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In any normal market, it's very good.

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It's very solid.

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80 plus percent of people are getting that.

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And I expect that to grow.

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I expect it to grow.

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And, honestly, I expect us to see, and we'll talk about this probably

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on another, another opportunity, but I expect inspectors to expand

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past just a home inspection for a buyer and other types of things.

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Maybe we'll get a chance to talk about it here in a little bit,

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but so it's very, very solid.

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And, you know, here's the coolest thing.

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Amazon isn't going to start selling home inspections tomorrow.

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Okay.

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Just like the, you know, I went on Amazon today and bought, and I looked at 10

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buyers and went, oh, that one, you know and maybe it's the cheapest, maybe it's

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the quickest, I don't know, whatever it is, but Amazon's not going to do that.

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And in the appraisal world, I was, I was listening to a guy the other day go, I'm

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in the appraisal business, I've been in the appraisal business for all these I'm

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still doing appraisals, but the appraisal business got basically federalized, okay?

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I mean, all of a sudden there was one way to get you know appraisals.

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I don't see that happening anytime soon in the home inspector market either.

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There's chances of it, but not likely.

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And so I think, I think we're in a great industry.

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We're in a great industry where we have the opportunity to really

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take this thing to the next level.

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As

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a matter of fact, Mike, you know, we, with our private coaching members that are part

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of our home inspector group you know, one of the things we researched recently

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was just approximately how many home inspectors are there in the United States

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and, you know, depending on where you look, it's somewhere between 28 and 32,

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000, but there are, there are significant amount of home inspectors out there.

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And one of the things like you talked about with our private group is,

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You've got to make yourself different.

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Marketing is a big component of that.

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So you don't want to be you know, thrown in to the 30, 000 ish that are out there,

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how do you make yourself different?

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And I know that's one of the things you've been teaching home inspectors

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for years of how do you do that?

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I have a second question for you.

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You ready for the follow up?

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You bet.

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You got it, man.

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So how does the current housing market affect the home inspection industry?

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And, and more importantly, how do you see that changing in the future?

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Because I, I've, you know, you and I've been friends for many, many years, way

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over 12, 13 years, whatever it's been.

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And I know you have this unique ability to like see around the corner.

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So share with our listeners today, what do you see changing in that?

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And again, how does the current housing market affect

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the home inspection industry?

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And then what do you see around

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the corner, Mike?

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Well, and, and if the housing market's just part of the of the scenario,

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it's the industry itself that's growing and changing as well that really

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affects a lot of a lot of people.

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So kind of like what I said, you know, if we're in a seller's

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market, less home inspections, okay?

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If we are in a downturn a recession, a depression even, there's

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probably less home inspections.

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Now, the great part of that is that it matters.

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But for the right guys, it doesn't matter that much.

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So, even if there's a recession, even if there's a depression, even

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if it's a seller's market we are still out there, we're still doing

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inspections, we're still growing.

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Now, in 2007 to 2010, 50 plus percent of home inspectors went out of business.

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Because of the recession, because the market slowed down,

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because of so many things.

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And the big part of that, of course, was that they didn't

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know how to market themselves.

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And as you said, they didn't know how to differentiate themselves.

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So again, people aren't thinking about, you know, whether they

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get an inspection or not.

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Most of them are going to go, yeah, we want to get an inspection.

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They're going, who do I get an inspection from?

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And it's kind of like, well, do I fly Southwest Airlines, you know, or do I

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fly American Airlines, or do I fly Delta?

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And sometimes it's just where you're located, right?

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But in the local marketplace, they're, well, a small marketplace is going to

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probably have five to ten inspectors, but in a marketplace like the Dallas Fort

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Worth area where I'm at, we have well over, you know, probably about 500 to

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1, 000 at any given time home inspectors.

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But the truth is, 80 percent of the business is done by 10 companies, okay?

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And one of the biggest changes in the industry has been companies that are

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growing and pulling on other inspectors and, and setting it up that direction.

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And then, of course, the marketing becomes the, the real big thing.

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One, one last interesting piece of this whole puzzle that inspectors

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need to make sure that they're keeping into consideration, and that

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is the fact that our business is very responsive to the time of year.

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So in June, I'm doing 10 percent of my business and in December,

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I'm doing 5 percent of my business.

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So you have to make sure that you have that all set up in your business to

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make sure that you can handle winter.

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And I go around and then people go, well, that sounds very Game of Thrones.

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I go, winter is coming, you know, you know, and I never even really got into

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the whole Game of Thrones thing or watched it much, but the saying was so big, you

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know, you know, it's kind of like the Godfather thing, you know, I'm going

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to make him an offer he can't refuse.

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You know, that sounds like the Godfather, right?

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But the bottom line is, the industry is in a good place right now, and the

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industry is going to grow, and the industry is going to continue to grow,

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I believe and for the right people.

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The people that really understand how to be responsive and ahead of

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the curve on what's coming in the economy and the industry itself.

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Perfect.

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Good.

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Well, as you know, with our group, right, our private group of home inspectors,

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we talk about the five F's, right?

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We got, we got family, we got faith, we got financial, we got fitness, we got fun.

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So, let's dive a little deeper on the financial side.

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I just looked at a few stats prior to setting up the podcast with

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you today, and like the median, or like, let's say, an average.

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wage for home inspectors, somewhere between 50, 000, 70, 000.

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And obviously the industry is expected to grow somewhere between 2 percent and 5%.

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But my specific question to you is this, in your decades of experience,

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you know, back when your dad started Texinspec all those years ago, what

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do you see the average inspection fee like today for a home inspection?

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And then I think again, same question, what else should home inspectors be

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doing around offering other services?

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Wow.

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Man, you, you are nailing the questions.

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You are nailing the

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questions.

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It's not me.

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These are the questions we receive every day.

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You know, when folks reach out to us to talk about our group

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and some of the other things.

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So these are great questions from potential members

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of our group.

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Well, and, and that, that explains why you're, you're so on track.

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Because, yeah, these are the kind of questions that we hear all the time when

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I go to conference after conference after conference to speak to people, you know.

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And the average home inspector used to be, by the way, that your

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average inspection was very low, and so the inspector didn't make that

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much, but our prices have gone up.

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We'll talk more about that here in a little bit, probably, but the average

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home inspector, you're absolutely correct, should make on the low side

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50, 000 and look, I, I have, I, I have Any, anywhere near from 15 to 20

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inspectors plus, depending on what time of year, depending on, you know, people

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that quit and join us and, and how many, with training and everything else.

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But our guys make anywhere from 50, a year working.

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For us.

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Think about that.

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That's working for us, okay?

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I talked with an inspector the other day that was in business for himself, and he's

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going, yeah, I'm doing pretty good, but I really need to grow the business now,

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I need to take it to the next whole level and he's doing about 100, 000 a year.

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Now, here's, here's the interesting point of that.

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He's doing about 100, 000 a year.

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Now subtract out his cost of doing business, right?

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That's what he's really making.

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So I think the neighborhood of somewhere between 000 is a reasonable

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figure for an inspector to be able to make coming into this business.

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And if you're working for somebody that whole industry now, That's one of the

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big changes is the whole industry now is going towards multi inspector firms.

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And so when, used to be when somebody was going through school, they're

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going, all right, so I need to do this and this and this and this

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to go into business for myself.

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Now what we see when people go through the school, they're going, okay, who's hiring?

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Alright?

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Complete shift.

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Complete shift inside of that.

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And then you have someone like me, that has that ability to see

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around the corner, you know, 10, 15, 20 years from now, that's

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running the business, the visionary.

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But we also have marketing people out there visiting

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offices and doing presentations.

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And we have people that are doing online marketing for us all the time.

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And then we are going after bigger contracts, you know so

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that we can pull in bunches of inspections, not just one or two.

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And so.

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There's so many good things happening in the industry for people.

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So yeah, I think an average inspector could easily make 50 to 75.

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Now, a business owner can easily make a lot more if he's willing to

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take the time to grow his business.

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And honestly, that's who we work with more than anybody else.

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We work with single man operations.

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And we've been able to take single man operations to 300,

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000 plus dollars per year.

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We call, I love to call those guys the Iron Man Inspector, right?

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And I didn't really expect that to happen, but some guys are just stubborn.

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They want to stay a single man operation their entire life, you know?

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And then, of course, we've helped over a hundred companies build

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million plus dollar inspections.

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A million, two million, three million, four million, and so forth.

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And there are some out there doing ten million dollars now.

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And at each one of those million dollar marks, it seems like there's a really

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sweet spot, especially for profit, and being the Chief Profit Officer,

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I knew you would appreciate that.

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So, simple formula, you know, 6 plus 2B plus 1 equals a million dollar home

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inspection business, and when you hit that spot, You don't have to do inspections

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yourself as much unless you want to and you get to take home a lot of profit as

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well, so, yeah, an inspector can make anywhere from 50, 000 to 75, 000 depending

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on who he's working for and if he wants to work for himself, he's still going

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to make about the same after you figure off his cost of doing business, but if

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you really want to grow your business past that to having two, three, four,

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five, six inspectors, you could do even, even better than that without having

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to do a single inspection yourself.

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Perfect.

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Perfect.

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We're about halfway halfway through, Mike.

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So a couple other quickies before I ask you the time to complete an inspection.

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I think it's important because we have so many more people that join our

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podcast and listen to kind of what you've established over all these years, but

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I want to make sure that folks that are relatively new to the podcast and new

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to Mike Crowe, That you know, Mike Crow obviously runs a home inspection business.

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So he's been there, done that, he's still doing it today.

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And actually, Texinspec is a prototype company.

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So when, when Mike is answering my questions that came from our members

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and other potential prospects that want to be part of our group, I understand

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he, he's not doing it off of theory.

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Concepts.

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He's answering these questions from his real business that does,

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you know, 3 million plus a year.

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So I want people to understand that, hey, this is not just a podcast

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where we're reading out of a book.

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No, these are real life examples from Mike's prototype company.

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So, Mike maybe in a minute or less, tell me the time it should

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take to complete an inspection.

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The time to take it to complete an inspection will vary on how

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many inspection types you're really doing for the inspection.

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See, most home inspectors are only doing a home inspection, right?

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Our company not only does the home inspection, but on average three

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other or three plus inspections at every inspection, right?

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And that's what I want you

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to dive into because I think a lot of the new folks entering

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the industry, they're like, well, I'm out to do a home inspection.

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But man, what you and the rest of the company has done is really

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expand beyond quote, What I would call the basic home inspection.

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So let's talk more about that and give some ideas to our listeners

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around that.

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And it's a great point because remember how we talked about,

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you know, an inspector could make somewhere between 75, 000.

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A big part of that difference is, you know, what else is he doing?

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So a lot of inspectors, of course, do radon, or swimming pool, and

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spray color, and termite inspections, and septic, and well, and sewer line

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inspections, and mold inspections.

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And that's just the, that's just the ones that come off the top of my head.

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And so every one of those takes a little bit of extra time during the inspection.

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But for just a good solid home inspection, and I, I would say

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probably 80 percent of our home inspections include the termite as well.

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So for the home and termite inspection we, me and my dad started

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calculating this back in the 80s, 90s.

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It's still very relevant today.

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We figure it's about an hour per thousand square feet with no less

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than an hour and a half, two hours.

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And so if it's a 4, 000 square foot home, we figure it's going to be

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about four to four and a half hours.

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Now we have developed our own system.

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And I love the fact that you pointed out we're running a prototype company

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because the guys that we coach, we allow them to come ride with us, see what

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we're doing without having to go join a franchise, you know, and pay thousands

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of dollars for that and then pay 10 percent out, you know per month of

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their gross revenue to somebody or pay a flat fee to some franchise that Keeps

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them from really expanding and doing all the things that are possible, but

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a thousand, about an hour per thousand square feet and for the home and termite

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inspection, plus about half an hour for us to produce the report on site and give

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it to the people right then and there.

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And, you know, our members, we hand them that report.

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It's a, it's a, it's a.

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It's a proprietary thing, but it's basically something I created 20

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years ago, 25 years ago, and we're still using that same system nowadays.

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And one of the things that most home inspectors make the mistake of is getting

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into way too of a complicated report.

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So for some guys out there, and it breaks my heart a little bit they go do the

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inspection and it takes them 2 or 3 hours, then they go home and it takes

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them 2 to 3 hours to do the report.

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Oh, that's, it's, it's just painful thinking about it.

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That goes against,

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that goes against our 5 Fs, right?

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Yeah,

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it does.

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Because they're, that, that's time they could spend with their family

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and heaven help them if they did two inspections that day, and even if

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they spent six or seven hours and they go home and have to spend another

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six or seven hours doing the report.

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In fact, one of the things that I.

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I used to have it happen all the time, and I'm sure it happens to Jonathan,

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my son now, who oversees our inspection business, is that about three months after

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we put an inspector in the field on his own and everything, we get a phone call.

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Hey, Mike, I'm sitting in the driveway, and I'm home, and I did

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two inspections today, and I just realized I'm home, and I'm done.

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You know, and I just want to tell you thank you, because when I was out

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there doing inspections on my own, you know, I would go spend, you know,

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three hours in inspection and, and then come home and spend another two

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hours, three hours on the report, and I don't have to do that anymore.

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I just want to tell you thank you.

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So, you know, how much time does it take to complete an inspection?

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Well, if you do it a systematized way, the way we built it it's pretty, pretty

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simple, straightforward and be careful, because Home inspectors in general love to

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spend way too much time on their report.

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And so that's one of the big things that we changed to make things a little

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easier for the guys that we coach.

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Perfect.

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Great,

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great, great feedback, Mike.

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And I'm sure the listeners are getting a lot out of the podcast.

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So the last question before we land the plane, it's really

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like a three part question.

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I'll try to combine it into one.

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So what are the significant changes in pricing?

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What are the significant changes you see coming in the home inspection

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business, sort of in general?

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And then the last part is, what should home inspectors

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be doing right now to adapt?

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So again, pricing changes, market changes in the business, and the last

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one is, what should the home inspectors listening to the podcast today do

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to adapt to those two situations?

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You know, and When I started working with home inspectors, especially those

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that own businesses, and especially those that have been in business they patterned

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their, their pricing structure off of what was done 30 years ago, or 20 years ago.

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They don't even realize that they're patterning it off of that.

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It's kind of like the, it's kind of like so many things.

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Most people don't realize that Romans decided how wide our roads would be.

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Okay, because of the way that they set up the chariots and the ruts and the road

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and everything, and then that went over to, you know, the, the wagons and that

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went over to the trains and that went over to the automobiles and that, and,

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and today our roads are so wide based off of something that happened then, right?

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And, and let's not say it was a bad thing, but we've improved a lot of

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that in the process, so immediately.

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One of the things that I talk to people is one, how to raise your prices,

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because most guys are undercharging.

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Almost everybody's undercharging.

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So we have a formula three times 90 times two where we, we go through

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the pieces of that on how to fix your formula, raise your prices.

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And then most of them are based off of blocks of square footage and

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and we immediately adjust the blocks of square footage per prices, which

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gives them an increase immediately.

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And then we teach them how to start raising their prices based off of

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what their marketing is and how their, their kill ratio is on the

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phone and do some things along that.

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And immediately, in fact.

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It's so funny because within less than three months, our

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coaching pays for itself.

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Our coaching pays for itself.

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Because once they've made that change on price and, and the blocks, and,

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and learning when to raise prices, and then learning how to add in some

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of those other inspection types that we talked about a minute ago their

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whole pricing structure changes.

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And, and it's not unusual for our guys to go...

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I'm making 100 more per inspection now than I used to.

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I'm making 150 or 200.

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We've seen some guys literally double their prices when they used to make 300.

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Now they're making 600.

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And it's not unusual for a thousand plus dollar inspections to roll.

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And even for our prototype company here and for our guys a lot of times.

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And so there's been a lot of good things along those lines.

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It's like the gift.

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It's like the gift that keeps on giving, Mr.

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Crow.

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It's the gift that keeps on giving.

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That's right.

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And one, one of the things though, that.

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You talked about the future and I want to make sure that you hear this.

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I want to make sure everybody hears this loud and clear is that for the

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last 15, 20 years or so, companies have decided that the information from

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the home buyers is so important that they're giving away the home inspections.

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So there are a series of companies out there, even right now, and

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there's a series of companies that have tried it and have failed so far.

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Somebody will figure it out eventually, and we need to be prepared when they do.

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I call this my what's next question.

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What's next, that if you don't see it coming, is that at some point,

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you may be doing home inspections.

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And somebody is going to start putting out a flyer going,

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Hey, home inspections for free.

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And how are you going to compete with that?

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If you don't know how to compete with that and how to understand that and

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how to build your business around that, you're, you're sunk, you're sunk.

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So we are teaching our coaching members.

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One of the biggest things about the home inspection business is that

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honestly, it is the first business.

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Okay.

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And then you want to add this business and add this business and add this

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business so that when this happens.

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You are actually in a position to do exactly the same thing if you have to

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because these other businesses will really be where you're making your money and

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doing different things down the line.

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Now, I honestly hope it never gets to the point where

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inspections are just free, okay?

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You know, there, there are automobile shops, right?

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Free oil change.

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It's free to get in.

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It's not free to get out.

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And, and so, but it could happen in our business.

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If somebody figures it out, somebody puts enough money behind it, they

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could literally, they could literally crater our company, implode our

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industry within two or three years.

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And if you're not prepared for that, you're, you're going

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to be in serious trouble.

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So there's ways to be prepared for that.

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That's one of the things we're coaching our guys on.

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So.

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The pricing is important.

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There's significant changes in the pricing.

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One, is our guys are making more right now.

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Let's take all that home.

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But let's also be prepared for when some idiot company comes in here and

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goes, Oh, we'll give that away for free so we can get to all of this.

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Okay?

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And we need to make sure we have that in place.

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Well, good.

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Well, Mike, I believe we're coming to the end of this episode, man.

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Always a blessing to have you share your wisdom with

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our home inspectors out there.

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And again, thanks for your, your listenership.

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Those of you that have tuned into the podcast.

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Again if you want to learn more about us, you can go to MikeCrowReturns.

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com.

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Obviously you can look around the description here and find our other

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links, but we'd love for you to join us at one of our upcoming meetings.

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So we can show you how we can serve you moving forward.

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So again, I'm David Tyburski, America's Chief Profit Officer

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here with my brother Mr.

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Mike Crow, the father of Home Inspector Marketing.

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And we look forward to seeing you very soon.

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So Mike, close us out, brother.

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Thank you so much.

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So everybody listening, remember, you know, around here in our, in

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our community, our village that we live by the five F's, okay?

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Family, faith, financial, fitness, and fun.

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And by the way, I could, I could list six more F's, but

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those are my high five, okay?

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Those are the ones that help us be able to every day kind of stay focused

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on what's important in our world.

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And don't forget the people you hang around, those are the people that

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are going to influence you the most.

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And it's one of the reasons I say be successful and be around

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those that are successful.

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You want to have better family, then hang around people that

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have better families, okay?

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You want to have better financial in your world, better, better finances, hang

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around people that understand finances.

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You want to be more faith driven, hang around people that are more

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faith driven, so forth and so on.

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It's so much fun watching the people Hang around in our circle

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to be able to take all of that to the whole next level as well.

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And like I say, be successful and be around those that are successful,

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because the more money we make, the more people we can help.

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So Davie, I want you to know, I love having a Chief Profit Officer that can

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help us get to that That bottom line and make sure that the bottom line is growing

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as well as the top line and everything.

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So thank you for your questions today.

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And thank you for the time that you put into helping, helping

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me help others in the process.

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Absolutely.

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We'll see you on the next podcast.

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Bye bye.

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