One of the biggest perks of being an independent home inspector is that you get to call all the shots. You make your own schedule, design your own marketing plans, and get to create your own ideal work-life balance.
But what happens when you have more customers than you can handle? It’s a real problem in some communities, which means you could find yourself in the position of turning away a real estate agent or homeowner simply because you don’t have the manpower to take on one more job.
If you find yourself turning away work and having a hard time leaving your schedule open for family time, hobbies, or just a day off now and then, the message is clear: It’s time to expand your home inspection business.
Finding great employees can be a huge challenge, especially since qualified home inspectors need the right training and licensure depending upon state laws. You might even want to hire someone with experience in the construction industry. When you’re looking to turn your sole proprietorship into a full-fledged multi-inspector firm, finding and attracting the best talent can be a challenge.
Here’s what you need to know to do it right.
Step one: Make sure your business is ready to hire
If up until this point you have been operating as a single home inspector and taking calls and appointments solo, chances are your business model is pretty simple. Operating as a sole proprietor is certainly a simple way to go when it comes to doing taxes for your business, but hiring employees means you’ll need to get all your ducks in a row to keep things legal.
Get an employer identification number
The good news is that, from a tax perspective, you can keep your home inspection business a sole proprietorship and still hire employees. To do this, you’ll need to obtain an employer identification number (EIN) for your business. The EIN helps the IRS track your business and what you’re paying the inspectors you hire. If you’ve just been using your own social security number to do your taxes up to this point, don’t worry — getting an EIN is pretty easy. Just fill out the online form at the IRS website, and they’ll send you a unique EIN that you can use for your business forever. The EIN serves an important function to keep your personal social security number off of employee paperwork, so this is a crucial step before hiring anyone.
Consider becoming an LLC
If you’re operating as a sole proprietor but are planning to hire an employee or two, you may wish to consider changing your business entity to a limited liability company (LLC). An LLC is a legal business entity that is separate from your personal finances. That is, the business makes money and takes on any liability, and you would pay yourself and your employees a salary from a business account.
That does require some extra steps, including setting up a business bank account and payroll system to cut yourself a check. But the big advantage for an inspection business that operates as an LLC is right in the name: limited liability. If you get sued as a sole proprietor, your personal assets could be on the line, since the law sees no difference between you and your business. If you get sued as an LLC, the risk is to the company, and your personal assets (house, car, retirement savings) are off limits.
Hiring employees means that you’re putting your seal of approval on their work, and there’s a lot of trust involved. For many home inspection business owners, it makes sense to become an LLC once they begin hiring — it’s a commonsense way to protect you and your family from an employee’s mistake.
Each state has its own requirements for registering a business as an LLC. The best place to start is at your state government website, where you will find all the rules and steps involved. In general, you can expect to:
- Choose a unique name that no other business in your state has
- Assign a registered agent to accept all legal paperwork
- Obtain your EIN
- Apply for any required business licenses and insurance
- Register with state tax boards
- Submit and annual report
Choose between employees and independent contractors
There are two ways to establish a relationship between your business and the people you hire. You can hire inspectors as employees, or you can hire them as independent contractors. There are important legal differences between the two.
Employees are paid a regular wage per hour or salary per year, and you may have to offer them benefits such as health insurance, depending on your size and your state’s laws. You will also need to set up a payroll system that tracks their earnings and withholds the right amount of federal and state taxes, plus Medicare and Social Security. Your business is responsible for paying into Medicare and Social Security on their behalf. In return, you can dictate the terms of employment, such as choosing which jobs to send them on, how many vacation days to provide, whether they need to wear uniforms, and so on. Employee wages are reported to the IRS on a W-2 form.
Independent contractors, on the other hand, are bound to work for you only per job. You may provide a contract for a limited time period, a certain number of hours, or just pay per number of home inspection reports completed. You cut them a check, and that’s it. They are responsible for their own taxes — so no additional benefits or Social Security payments for you to worry about. This gives contractors a lot of freedom to take or leave the work you offer. Independent contractor wages are reported to the IRS on a 1099 form.
Which system is right for you? If you’re making your first hire and aren’t sure if you really need someone full-time, working with independent contractors lets you hire only for overflow work during your busy season. It’s also much easier to track payments in your bookkeeping.
On the other hand, if you have a chronic understaffing problem, hiring a full-fledged employee will ensure that you always have a home inspector to send on a job. This can be a good fit when you are confident about the staffing levels you need and are working to expand your business into a larger region.
Step two: Get smart about marketing and advertising positions
Finding a great home inspector to add to your team means starting a recruitment effort. You’ll want to advertise your position, but what’s the best way to get out the word?
The easiest way to advertise a position is on a major job board website like Indeed, which offers free job posts that show up in the general search. You can also pay to sponsor your listing to have it show up more often for more people. Other job boards like Monster and ZipRecruiter offer a short free trial period and then charge to post ads for your inspector positions.
You may also want to reach out to your professional network to let them know you’re looking. This could include local real estate agents, other home inspectors, and the larger community of contractors and home builders. You can do this by word of mouth, but it definitely helps to enhance your outreach by taking the message to social media. Consider posting your job to local Facebook groups, your Twitter followers, and any other platform you use. Your local Chamber of Commerce may also provide networking and messaging services to help you cast a wide net.
The home inspection business is a very specific niche, and it may be difficult to find a qualified candidate who wants to come work for you instead of starting his or her own business. If your target market is facing a shortage of qualified candidates, you may want to try your hand at encouraging people who aren’t yet home inspectors to get into the business. If you know a contractor or tradesperson who would be excellent at the job, tell them all about it — and then give them all the information they need about training and licensure to get started in a home inspection career.
Step three: Vet your candidates
Once you have a few candidates apply for the position, it’s time to choose carefully. A successful home inspector will be able to demonstrate the following characteristics:
- Thorough technical knowledge: Any inspector you hire needs to have a thorough knowledge of home construction. Check credentials and licensing, which often requires a knowledge test. You may also ask interview questions about training, experience, and hypothetical situations to get a sense of how much your potential inspector really knows.
- Outstanding verbal communication: When home buyers and real estate agents work with home inspectors, they expect all their questions to be answered during the inspection process. Home inspectors need to be excellent communicators — especially when it comes to describing complex technical issues in layman’s terms. An in-person interview will reveal a lot about their communication style, so pay close attention as you talk.
- Detailed written reports: All good inspectors write thorough home inspection reports, so ask to see a few sample reports during the interview. Look for clear writing, lots of explanatory detail, and careful organization of information. After all, your company’s name will be at the top of these reports, so you should like what you see!
After reviewing qualifications and conducting an interview, the final step is to check references. These might be from past employers or home inspection customers. Follow-up with questions that will get at what it was like to work with the candidate. Work style and personality are also important “soft skills” that will make a big difference in your future working relationship, so ask away!
Looking for more great advice to help grow your home inspection business? HomeGauge is here for you! From professional websites to a full suite of home inspection software, we’re committed to helping home inspectors do their best work. Learn more in our Learning Center today.