Tracking the return on your investment

Tracking the return on your investment

One thing that I have found that always works in a price-sensitive industry such as home inspections is a discount coupon. Some people will say that discount coupons are only for restaurants and grocery stores, but nothing could be further from the truth. Discount coupons work in all retail sales and services. In fact, I use them for auto maintenance, clothes, gardening supplies, cat food, veterinarian services, computer supplies, online services, office supplies, online memberships, and more.

During the summer of 2001, I spent $65,000 setting up a new home inspection company. That's a lot of money, and I needed a good system to track the return on that investment. Of course, filing annual tax returns with with both federal and state governments would give me a good idea, but more importantly for me was simply having a viable and profitable company, which I still have ten years later. I guess the investment paid off.

I had intended the first day of operation to be August 1, but those third parties that have to give you phones, business licenses, company insurance, and tax ID numbers don't always cooperate. The worst were the governments, i.e., the IRS and the California Commissioner of Corporations. Seems like the governments would be the first to approve a new business because they (should) want all that tax revenue. Alas....

My company finally opened for business on October 15, 2001, but before it did, I had sent out coupons to over 28,000 real estate agents in San Diego County. This past week I got two coupons back, one of which was from the pre-opening days of 2001:

There are two ways that I know that coupon is from those pre-opening days. First, I made these look like a check, and after October 15, 2001, they had the name of a person in the upper left corner, like this:

The initial batch of pre-opening coupons did not have any date coding on them whereas everything I sent out afterwards did. If you look at the above coupon for Thomas Nelson, in the bottom right corner you'll see L6. That means that I sent out that coupon in December 2006.

I also have not been The HomeTeam Inspection Service since June 30, 2007, and I haven't sent out any coupons since April 2007.

All my business now comes from past Clients; referrals from real estate agents who have referred me in the past; ActiveRain members who have referred me, such as Barb Fischer, Jane Grant, Kelly McQuien, Steve Hall, Stewart Penn; and people who have found my ActiveRain blog posts via Google searches.

One way to track return on investment is to have an expiration date, such as what you find on coupons for groceries, restaurants, retail stores, etc. I've never believed in expiration dates because I want people to come into my store with the coupon, and the longer they hold on to the coupon, the more my prices are probably going to increase, so I don't have a problem with someone using a coupon from years ago. The only way the coupon expires is if I expire.

As an aside, if you look at the first coupon, it says it's good on any home inspection priced at $99 or higher. Hard to believe I ever did a home inspection for $99, or $79 with the coupon, but that was for a 350-SF condominium, of which we have quite a few here.

The inspection fee for the inspection that brought that pre-opening days coupon in was $799. Minus the $20 discount, my return on investment just went up $779.

 

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