The Cost of Doing Business 3 .................................Services – Home Staging Consultations 8 .............Vacant Home Staging Consultations 8 ...................................Owner-Occupied Home Staging Consultations 8 ..................Services – Additional Services 10 ..........................Home Staging Rental Services 10 ...........................................Pre-Listing Walk-Through 10 .................................................Photo Prep Staging Services 11 ...............................................Decluttering and Organizing Services 11 ...............................Project Management 11 ...........................................................Assisted Shopping Services 12 .................................................Resale Consultation 12 .............................................................Colour Consultation 13 ............................................................Redesign Consultation 13 ........................................................Additional Redesign Services 14 .............................................Pricing 15 ................................................................Setting Standard Rates 15 .......................................................Home Staging Consultations 16 ..............................................
Vacant Consultations 16 ......................................................................................................Owner-Occupied Consultations 16 ......................................................................................
Pricing Follow-up Services and Projects 16 ...........................Rental Fees 16 ......................................................................................................................Service Fees 17 .....................................................................................................................Out-of-service-area Fees 17 .................................................................................................Materials/Purchases 17 .......................................................................................................Third-Party Fees 18 .............................................................................................................
Forecasting Sales and Costs 19 ...............................Start-up Tips 19 .......................................................................Forecasting Sales 20 ................................................................Cash Flow 20............................................................................
The Cost of Doing Business The costsof launching, andmaintaining, ahome stagingbusinesswill varydependingon city andstate/provincial requirements,butyouwant toensure thatareprepared tomake the investmentsnecessarytocoverliabili<esandotheropera<ngcostswhenyouneedto,asyougrowthebusiness.Inordertomanageyourstart-upcosts,evaluatewhatwillbeneededimmediately,andwhatcanbeaddedasyougrow.Youmayalsofind thatyoualreadyhaveaccess to someof the tools thatyourequire,includingequipmentandservices,withouttheneedofmakinganaddi<onalinvestmentinthese.Thefollowingoutlinessomeconsidera<onsforplanningyourexpenses-thisisintendedasaguideline,andcanbeusedtoassistyouwithforecas<ngyourexpensesfortheyear:
‣ Training, certification, and continuing education courses • In addi<on to your RESP™ or other cer<fica<on training, youmaywish to take some
addi<onalcoursestoimproveyourskillsinanyareasthatyoufeelmightneedsomeextraaJen<on, includingbusinesstraining,soKwarespecificcourses,homestagingorredesignspecialtycourses,etc.
‣ Inventory • Evenifyouchoosenottoinvestisowningyourownfurnitureinventory,youwillwantto
buildatleastasmallselec<onofartwork,accessories,andpillows,andthecostsforthesecanaddupquickly
‣ Start-up Registration/Licensing • Ini<albusinesslicenseregistra<on
• Licensing(asrequiredforyourlocalmunicipality)
• Zoningpermit
Ifyouintendtooperateyourhomestagingandredesignbusinessoutofyourhome,youwillwanttoensurethatyourpropertyis“zoned”toallowforthis.Ifyouarenotcurrentlyzonedforahome-basedbusiness,youmayneedtoapplyforapermittodothis.
‣ Organization memberships • Thesemaybeindustryspecificonalocalorna<onallevel,ornon-industryspecific,such
astheBeJerBusinessBureau,HomeBuilder’sAssocia<on,ChamberofCommerce,etc.
‣ Insurance • Your insurance should cover you for general liabili<es, as well as loss or damage of
stagingrentalsandotherbusinessmaterialsandequipment.
‣ Loss of income
• If you are accustomed to a steady income and are planning to leave your full-<meemploymenttopursuethiscareerpath,youwillneedtohaveaplaninplaceinorderto pay the bills as you build the business. Thismay require cuXng back on somesplurge items, and/or supplemen<ng the income (i.e. spousal support, bank loan,part-<mejob,savings,etc.)whereyoucanun<lyourbusinessisasuccess.
• Remember thatany<mespentworkingon thebusiness is consideredunbillable<me,however your <me is valuable, so you will want to account for your <me as anexpenseor lossof income,andaimtoreducetheamountofunpaid<methatyouspendasthebusinessgrows.
‣ General operating costs • Thisreferstothedaytodaycostsofrunningthebusiness,including,butnotlimitedto:
Transporta<onofstagingitems
Storageofstagingitems
Stagingassistants
Internetservice
Phoneserviceplan
‣ Vehicle expenses • Homestaging isamobilebusiness,andthereforeyourvehiclewill seea lotofuse.Be
sure to account for all associated costs with the use of the vehicle for businesspurposesincluding:
Insurance
Fuel
Generalwearandtearandmaintenancefees
Truckleasingcosts(for<meswhenanaddi<onalvehicleisrequired)
• Ifyouchoosetoownyourhomestagingrentalitems,youmayconsiderpurchasinganaddi<onalvehicle for transpor<ng the items, suchasa large truckoranenclosedcargotrailer
‣ Marketing • Websitehos<ng
• Websitedevelopment
• Printedpromo<onalmaterials
• Businesscards
• Magazinesorotherprintads
• Onlineadver<singcosts
• Emailmarke<ngsystem
‣ Office supplies • OKenoverlooked,thesesuppliescaneatuphundredsofdollarsamonth
• Includespaperproducts,pens,printercartridges,staples,paperclips,andothergeneralofficetools
‣ Contracts/lawyers • Contracts are a cri<cal part of a home staging business, and ensuring that you are
properlycoveredforanysitua<onthatmayarisemeansconsul<ngwithalawyertolimityourliabili<es
‣ Computer cables and accessories and electronic devices • Donotskimponthetoolsthatkeepyouconnectedeveryday
Mobilephone(s)
Tablets
‣ Software applications • WhetheryoupurchaseasoKwareprogramfordirectinstallonyourcomputer,oru<lize
cloud-basedapplica<ons, youwill need to invest in the right soKware to keepyouorganized,andallowyoutoproperlyexecuteyourservices
• Cloud-based programs are ideal for amobile business, however themonthly fees canaddupquickly,especiallybeforethecompanyisbringinginanysignificantamountofrevenue,sochooseselec<velyonanas-neededbasisasyougrow
• SoKwareapplica<onsandprogramsmayinclude,butarenotlimitedto:
Database
Bookkeepingsystem
InvoicingandEs<matesystem–thismaybeincludedwithyourbookkeepingsystem,ormaybea separateapplica<on (when star<ngout, itmaybeeasiesttosimplyuseaspreadsheetprogramwithcustomtemplatesforthese)
InventorymanagementsoKware
Wordprocessingapplica<on
Spreadsheetprogram
Photoeditor
Roomplanningprogram
Other mobile apps (i.e. scanning program, note taking, <me-tracking app,etc.)
‣ Merchant and banking fees
• Merchantfeesrefertothefeesassociatedwithcollec<ngcreditcardpayments
• Bankingfees
Select anaccount that isbasedonvolumeofusage tohelp to control andminimizethesecosts
Set up a separate business bank account – thiswill show your clients thatyouareaprofessional,aswellashelpyoutobeJermanagethebusinessfundsversusyourowncapital
‣ Professional Services/Staffing • Movers
• Accountantand/orbookkeeper
• VirtualAssistant
• Businesscoach
• Marke<ngcoach
• SocialMediamanager
Youmaychoosetomanagethisyourself,insteadofout-sourcingit,butitisa<melyinvestment
‣ Photography • Inordertoproperlybuildyourporcolio,you’llwanttoensurethatyouhavehigh-quality
photographsofyourwork
• Thismaymeanhiringaprofessionalphotographer,orinves<nginahigh-qualitycamera
‣ Professional resources • Includingpaintfandecksandcolourkits-theseareoKenprovidedatnocharge,butyou
will want to review with your local paint suppliers to determine if any costs areinvolved.
‣ Office equipment • Computer
• Printer
Recommendaprinterthatoffersscanningandcopyingcapabili<es
Dedicatedofficephone(ifapplicable)
ReviewVoIPop<onswithcallforwardingtoseparateyourbusinesslinefromyourpersonalphone
‣ Storage fees • Youmaybeable to storeyour inventory items in yourhomesomewhere ini<ally–be
suretofindaspacethatcanbededicatedtothispurpose,andbewillingtomovetheitemsintoanoff-sitestorageloca<onwhenthe<mecomes
‣ Storage systems • Asyougrow,youwillrequirebeJersystemsfororganizingyourinventory,includingbut
notlimitedto:
Shelving
Skids
Hooks
Racks
Otherstoragesystems
‣ Staging supplies • Thisreferstothetoolsmen<onedpreviously,includingbutnotlimitedto:
Storagetotesandcontainers
Bubblewrapandpackingpapers
Toolkit
Measuringtape
Glues
Tapes
Tarps
Cleaningcloths
Movingblankets
Dolly
Vacuum
Fabricsteamer
Iron/ironingboard
Touch-upmarkers
Healthandsafetysupplies
Services – Home Staging Consultations Beforethephonestartstoring,youwillneedtoclearlyoutlinetheservicesthatyouwillbeoffering,aswellaseverythingthateachservicewillinclude.
Yourhomestagingconsulta<onsarethebreadandbuJerofyourbusiness.Thisisyourfirstcontactwithaclient,andyourfootinthedoorforanyaddi<onalservices.Withtheseconsulta<ons,youwillprovide your clientswith valuable informa<on for preparing their home for sale, and this is youropportunitytoreallyestablishyourselfasanexpertinyourfield.
There are twodis<nct typesof home staging consulta<ons that youwill provide to your clients –owner-occupiedandvacant. Youmayoffervaria<onsofeachof these,butdis<nguishingbetweenthesetwoisyourfirsttask.
AvacanthomereferstoanunoccupiedANDunfurnishedhome.
Owner-occupied consulta<ons refer to home staging consulta<ons provided to homeowners thatintend to live in their home for the <me that the house is on the market. Occasionally, thehomeownersmaychoosenottostayinthehouse,buttheirfurnitureandotheritemsremain–thisisgenerallys<llreferredtoasanowner-occupiedlis<ng,duetothelimita<onsthatitposes,andtheinforma<onthatyouwillneedtoprovidetoyourclients.
Vacant Home Staging Consultations Outlinewhatyourconsulta<onwillinclude.Forexample:
- Amee<ngatthehometoreviewandpreviewthespace
- Recommenda<onsforupdatesandrepairs
- Abasichome stagingplan– thisdoesnotnecessarily require a specificdesignplan,but itshould iden<fy for the client approximatelywhatwill be includedwith your home stagingservicesintermsoftherooms,andhoweachwillbedefined
- Anes<mateforstagingtheproperty,outliningthecostsandtermsofyourstaging
Isthereanythingelsethatyourvacantconsulta<onwillinclude?
Owner-Occupied Home Staging Consultations Outlinewhatyourconsulta<onwillinclude.Forexample:
-Amee<ngatthehomewiththehomeownertoreviewrecommenda<ons
- Recommenda<onsforupdatesandrepairs
- ADIYstagingplanincludingitemstoberemoved,re-arranged,andreplaced
- Anes<mateforaddi<onalservicessuchasprojectmanagement,decluJeringandorganizing,homestagingrentals,etc.
- AwriJenreport
- Follow-upreportfortherealestateagent(ifyou’vebeenhiredbytheagent)
Isthereanythingelsethatyourowner-occupiedconsulta<onswill/caninclude?
For owner-occupied home staging consulta<ons, you will find that your clients will have varyingneeds,soyoumaywanttoofferafewvaria<onsoftheconsulta<oninordertoaccommodatethisandchargeaccordingly.
Services – Additional Services Whataddi<onalservicesyouchoosetoofferbeyondyourhomestagingconsulta<ons,andhowyouchoosetodefinethemisuptoyou.Thereareanumberofcomplimentaryservicesthatyoucanaddtoyourporcolio,basedonthetrainingthatyouhavereceivedtobecomeahomestager,whichcanprovideforanaddi<onalrevenuestreamaboveandbeyondyourstandardconsulta<ons.Ifyouarejust star<ng out, you may wish to hold off on offering Redesign services un<l you feel morecomfortablewiththese.Rememberthatthereisnothingwrongwithspecializing,andconcentra<ngonly on a select few services. Some home stagers provide only the consulta<on service! It’s notaboutofferingthemostservices,butinsteadaboutensuringthatyouareprovidingtopqualityworkfortheservicesthatyoudooffer.
Home Staging Rental Services A return visit to set up some rented home décor items can provide a large source of addi<onalrevenue.Fromtheclient’sperspec<ve,itcanbealow-costalterna<vetopurchasingtheitemsthattheyneed,andhavethemprofessionallydisplayedwithaquickturn-around.
Outlinewhatthisservicewillinclude.Forexample:
- Createahomestagingplan
- Selectandpacktherequireditems
- Stagingassistant(ifneeded)
- Movers(ifneeded)
- Delivery - Stagingofinventoryitems
Pre-Listing Walk-Through Youmaywishtonamethisservicesomethingelse,butessen<ally,thiswouldbeareturnvisittoyourclient’shomefollowingtheconsulta<on(andpriortophotosandlis<ng)attheirrequesttoreviewtheirprogressoncetheyhavehadachancetoimplementmostofyourrecommenda<onstoensurethattheyareontherighttrack.
Outlinewhatthisservicewillinclude.Forexample:
- Amee<ngatthehometoreviewandevaluatetheprogressandnextsteps
- Reviewfollow-upques<onsthatyourclienthas
- Reviewtheworkthatthehomeownershavecompletedsofar
- Follow-upreport
Photo Prep Staging Services Thisserviceu<lizestheitemsthatahomeownerhasinordertostyleandstagethehomeforsale.Again,youmaychoosetonamethisservicesomethingelse.
Outlinewhatthisservicewillinclude.Forexample:
- Your<metore-arrangeandstylethehome
- Stagingassistant(ifneeded)
Decluttering and Organizing Services Theseservicescanbenefithomeownersthatareselling,aswellasthosethatwishtoremainintheirhome,butwanttoreclaimthespace.KeepinmindthatwhenitcomestocluJer,therecanoKenbesomeunderlyingreasonsforthis,soyouwillwanttotreadlightlywiththeseclients.Some<mesit’ssimplyamaJerofbeingtoobusytoproperlykeepupwiththings,butother<mesitcouldrelatetolargerpsychologicalconcerns,sobeverymindfulofthiswhenperformingyourini<alconsulta<onorevalua<onwiththeclient.
Outlinewhatthisservicewillinclude.Forexample:
- Ini<alconsulta<on(ifyouhavenotalreadyprovidedahomestagingconsulta<on)
- Timerequiredtosortandorganizeitems
- Assistant(ifneeded)
- Timerequiredtodisposeofitems
- Packingmaterials
IfyouwouldprefernottoofferdecluJeringandorganizingasapartofyourservices,youmaywanttoenlisttheassistanceoforganizingprofessionalsforthis.
Project Management While project management does not necessarily mean the scheduling of the various trades (thisshouldbeleKforageneralcontractortomanage), itdoesmeancoordina<ngwiththemtoensurethateveryoneisonthesamepagewiththeworkthatneedstobecompleted.
Outlinewhatthisservicewillinclude.Forexample:
- Overseecontractorworktoensurethatitiscompletedasspecified
- Answerques<onsandhelptotroubleshootdesignelementsifcomplica<onsarise
- Manage the purchase ofmaterials to ensure that all items are available and on-sitewhenneeded
Sinceeachprojectisunique,youcancustomizethisservicehowyouseefit.
Assisted Shopping Services Thisone canbe fun– shopping!With this service, youwouldassist your clientwith sourcingandselec<ngvariouselements for theirhome, frommaterialsandfinishes fora renova<onproject, tofurnishings,andthefinaldesignlayerofaccessoriesandotheraccentpieces.
Outlinewhatthisservicewillinclude.Forexample:
- Timerequiredtoplanyourshoppingtrip
- Timerequiredforshopping
- Driving<merequired
- Timeneededtofollow-upwithordersplaced(ifrequired)
- Timerequiredtosetupitemsinthehome.
Forsomeprojects,youmayfinditbesttopre-select itemstonarrowdownyourchoice,andbringyour client tomake the final selec<on. Youwill need to account for your <me accordingly.Other<mes,yourclientmaywishtohaveyousimplyshopontheirbehalf–thereareanumberofgreatop<onswiththisservice!
Resale Consultation This consulta<on is similar to ahome staging consult. For this service, youwouldmeetwith yourclientattheirpropertyPRIORtoanyrenova<onstoreviewtheirplans,providerecommenda<onsforwhatisnecessaryforresale,andreviewwhatareaswillprovidethebestreturns.Thisconsulta<oncouldhelpyourclientstoavoidcostlyandunnecessaryrenova<ons.Thisisgreatforhome-flippersoranyhomeownerthatwantstogivetheirhomeacompleterenova<onpriortolis<ngforsale.
Outlinewhatthisservicewillinclude.Forexample:
- Amee<ngatthehomewiththehomeownertoreviewthehouse
- Recommenda<onsforupdatesandrepairs
- An es<mate for addi<onal services such as assisted shopping, projectmanagement, homestagingrentals,etc.
- AwriJenreport
- Conceptimages
- Follow-upreportfortherealestateagent(ifyou’vebeenhiredbytheagent)
- Abasichome stagingplan– thisdoesnotnecessarily require a specificdesignplan,but itshould iden<fy for the client approximatelywhatwill be includedwith your home stagingservicesintermsoftherooms,andhoweachwillbedefined
- Anes<mateforstagingtheproperty,outliningthecostsandtermsofyourstaging–thiswillallowyoursellerstobudgetforhomestagingandplanforthisinvestmentfromthebeginning
Colour Consultation Withthisservice,youwillhelpyourclientstoselectacolourpaleJefortheirhome.AcolourpaleJemay include selec<ngwall colours, aswell asa complimentary colourpaleJe for theiraccessoriesandotheraccentpieces.
Outlinewhatthisservicewillinclude.Forexample:
- Mee<ngwiththehomeowneratthehome
- Pain<ngplan
- Paintchips
Redesign Consultation Unlikehomestagingconsulta<ons,itcanbedifficulttocreateaformulaforaredesignconsulta<on,aseachhometrulyisunique,andeachclient’sneedswillvary.OneofthegreatestgiKsthatahomestagercanhave,istheabilitytoworkwithahomeowners’ownitemstomaximizethelookoftheirspace.TheserviceofRedesignu<lizesallofthetechniquesthatyouhavelearnedinhomestaging,but are applied for living, not selling. Most oKen with redesign clients, the homeowners have anumberofitemsthattheylike,buttheyneedhelpwithwheretoplacethemthroughouttheirhometocreateacohesivedesign,andtheyneedassistancewithpuXngtogetherthefinaldesignlayeroftheaccessories andartwork. Every redesign clientwill havedifferentneeds, sobe sure to set theexpecta<onswithyourclientsofwhattheycanexpecttoreceivefromyourservices,aswellasthefeesaJachedtoeach.
Youmaywishtooffermul<pleRedesignConsulta<onsinordertoaccommodateyourclientsvariousneeds.Somemaysimplyneedareviewofthehomewithsomeverbalrecommenda<onsforhowtobeJeru<lizewhattheyhave,othersmaywishtoreceiveareportcompletewithdetailedimagesforitemsthatmaybeaddedtothehome,andsomemaywishtohaveyouintoprovidehands-onre-arrangingandstyling.While it isnear impossibletocreateoneconsulta<onthatwillfitallofyourclients’ needs, you can create a few to use as a star<ng point, and can offer to create a custompackageforyourclientsonanas-neededbasis.
Outlinewhateachconsulta<onwillinclude.Forexample:
- Amee<ngatthehomewiththehomeowner(iden<fytheamountof<mealloJedforthis)
- WriJenreport,ifapplicable
- Re-arrangingandstylingbasedonexis<ngfurnishings
- Assistant(ifneeded)
- Digitaldesignconceptideaboards
- Shoppingguide
- Ideaphotosasvisualaids
- Floorplanwithfurniturearrangementop<ons
- Productsourcing
- Ac<onplanandnextsteps
Additional Redesign Services Sinceeachhomeisunique,thereareavarietyofwaysthatyoucanprovideservicetoyourredesignclients outside of their consulta<on. It’s a good idea to create a price list for these individualcomponents, as well as an hourly rate for any service that does not fit into a pre-determinedcategoryoroffering.
Someexamplesofaddi<onalredesignservicestoofferare:
- Digitaldesignconceptideaboards
- Shoppingguide
- Ideaphotosasvisualaids
- Floorplanwithfurniturearrangementop<ons
- Productsourcing
Pricing Onceyouhaveestablished that youareanexpert, andaprofessional in yourfield, you’ll need toensure that you will be compensated accordingly. SeXng your prices ini<ally can be challenging,especiallysinceit’seasytoundervalueyourwork,simplybasedonyourlackofexperience.
Setting Standard RatesInorder todeterminewhat youwill charge for your services, you’ll need to startbyoutlining theservices that you wish to offer, what will be included with each service, and the <me that youes<mateeachoftheseserviceswilltake.Youwilllikelywishtooffersomeservicesatanhourlyrate,andothersataflat fee.Researchyour localmarket toseewhatyourcompe<torsarecharging fortheseservices,anddetermine if thereappearstobesomewhatofastandardforyourregion.Thiswillgiveyouagreatstar<ngpointandunderstandingofwhatyourmarketwilltolerate.Youdonotneedtopriceyourselfbelow,oreventhesame,asotherscurrentlyinyourmarket.Youmaychooseto price yourself higher, based on your unique experiences and exper<se, or any addi<onal valuethat you feel that you bring to the service. Regardless of where you fall in rela<on to yourcompe<tors, you’ll need to have a full understanding of your costs, before seXng any prices, toensurethatyouwillmakeaprofitontheservice.
Carefully reviewwhateachservicewill costyou,anddeterminewhatyourexpectedprofitmarginshouldbe–i.e.whatpercentageofprofitdoyouhopetomakefromeachtransac<on?Thisdoesn’tneedtoinvolveanycomplicatedformulasorcalcula<ons,justsomesimplearithme<c.
Outlinealldirectcostsrelatedtotheservice,including:
1. The<meittakestodriveto(andfrom)theappointment
2. The<merequiredtoprepareanyinforma<onpriortoorfollowingtheappointment
3. Vehicleexpenses,includingfuelandmileage
4. Costofanymaterialsthatyouwillbeprovidingtotheclientand/ortherealestateagent
5. Overhead–thistakesintoaccountyourstandardopera<ngcoststhatarenotpaidondirectsales.While it’sdifficult tocalculatewhatyouroverhead is inyourfirstyear,youshouldbesure to add some sort of allowance for this. Overhead refers to the indirect costs to yourbusinessinprovidingservicestocustomers,suchasnon-billablelabour,rent,u<li<es,taxes,insurance,officesupplies,etc.
6. Merchantfees–ifyouacceptcreditcards,besuretoaccountforthefeethattheywillchargeyouforcollec<ngpaymentfortheservice.
Usingthisinforma<on,andaddingareasonablemarkupforprofit,youshouldbeabletocreateanhourlyrate.Ifpossible,seewhereyoufallincomparisontoyourcompe<tors.Ifyouaredrama<callylower,youwilllikelywanttoraiseyourpricestoshowequality,aswellascoveranyunforeseencoststhatperhapstheyhaveaccountedforthatyoumighthavemissed.Yourhourlyratewillhelpyoutosettherestofyourpricing.
Home Staging Consultations
VacantConsulta4ons
Theseconsulta<onsareanimportantpartofyourservices, inwhichyouwillbeprovidingvaluableexper<se,andshouldbebilledaccordingly.Yourfeeforthisconsulta<onshouldcoveryouforyour<me and your efforts, however youmaywish to provide a refund, either in full or in part, uponacceptanceofyoures<mateandagreementtofullhomestagingservices.Regardless,determineafairrateforthisconsulta<onbasedonthehourlyratethatyouhavesetout.
Owner-OccupiedConsulta4ons
These consulta<ons require a greatdeal of addi<onal effort, <me, andexper<se inorder toworkwithwhat thehomeowner alreadyhas, and create a comprehensive stagingplan, so youneed toensurethatyourconsulta<onratecoversyouforyour<meandefforts.
Youwill find that some clients are looking for the quickest return for their dollar, otherswho arelooking for thebest value,andothers thatwant tohave thebestof thebest. For this reason,werecommend offering three (3) consulta<on op<ons for owner-occupied lis<ngs to suit all of yourclients’needs.Inaddi<on,bymarkingthemid-pricedpackageasthe“mostpopular”,youwillguideyourclientsintothisoffering,sobesurethatyourmiddlepackageprovidesthebestvalue.
Pricing Follow-up Services and Projects Onceyouhavesetyourconsulta<onrates,andyourstandardhourlyfee,you’llbebeJerequippedtobid on larger staging projects. The expenses for these projects will be higher than a simpleconsulta<on since they will involve more <me, labour, and logis<cs overall. Depending on theproject,theymayalsoinvolvesub-contractorssuchasassistants,movers,andrentalcompanies.Besuretounderstandyourcostsforeachproject,anddeterminewhatprofitmarginyouwouldliketoachieve for each project. Compare your es<mated costs with your actual costs following thecomple<onoftheproject.
Whenpricingyourprojects,besuretotakeallaspectsoftheprojectintoconsidera<on:
RentalFees
- For any items that youwill bepurchasingand ren<ng to clients, be sure to calculate a fairrental price – industry standard states 10%-20% of the retailprice. Thismeans that if youpurchased the itemat a discounted price, due to a sale, or a trade discount program, youwouldcalculateyourrentalfeebasedonwhattheregularpriceoftheproductshouldhavebeen,notwhatyoupurchaseditfor.
- Reviewwhat other rental companies are asking for their products, and evaluate how youritemscompareintermsofquality,style,andprice.
- ConsiderseXngstandardratesforbulk items– i.e.allsofaswill rentforthesameprice,allaccentpillowswillrentforthesameprice,etc.Thiswillmakecalcula<ngyoures<matesmucheasier.
ServiceFees
- Breakdowneachjobintothe<merequiredtocompletethevarioustasksinvolved,fromstarttofinish.Besuretoincludethe<meofanyassistantsoraddi<onallabourersrequired:
o DecluJer,pack,andorganizeclientitems(ifapplicable)
o Time required to arrange for any subcontractors or services on behalf of client (ifapplicable)
o Createanaccuratestagingplan
o Selectandsecureitemsfromthird-partyfurniturerentalcompany
o Prepare,pack,andloaditems
o Travel<me
o Deliver,unload,andplaceitemsinappropriaterooms
o Staging–breakdownthe<merequiredbyroomorservice
o Reloadanyunuseditems,andreturntoinventory
o Destaging–includingpacking,loading,moving,andreturningtoinventory
Out-of-service-areaFees
- Someprojectsmaytakeyououtsideofyourstandardservicearea.Ifyouchoosetoprovideservicefortheseclients,youwillneedtoensurethatyouarebillingfortheaddi<onal<merequiredfordriving,aswellasthemileageonyourvehicle.Ifyouprefernottoservicetheseareas,lookatbuildinganetworkofhomestagersthatwillservicethoseareas,andprovideacomparableservicetowhatyouoffertoyourclients.
Materials/Purchases
- Some projects may require an investment in supplies – an expense that you can pass ondirectlytoyourclients.Forexample:
o Packingmaterials(boxes,tape,labels,etc.)
o Finishes
o Stagingitems
- Determinewhether or not youwill add amarkup to these purchases, and if so,what thatmarkupwillbe.
Third-PartyFees
- If you are ren<ng from a third-party furniture rental company, you’ll want to secure anaccuratepricelistfromthem,anddeterminewhat, ifanything,youwilladdasamarkuptothoserentalitems.
- If you own your inventory, and are hiringmovers and/or staging assistants to help you tomoveyourstagingitems,besurethatyoucalculateafairratefortheir<meandservices.
Forecasting Sales and Costs Planning for your profit/loss is an important aspect of running a business, especially in the earlystages.Youmaywishto investsomepersonalsavings,tocoversomeofyour ini<alcosts,un<lthe<mecomesthatyouarebringinginsomerevenue.Beginbyoutliningtheitemsthatyouan<cipateyouwillneedtospendmoneyon inordertostartthebusiness.Theseareyourstart-upexpenses,and by iden<fying these before launching your business, you can beJer plan for the type ofinvestmentyouwillrequire,beforemakinganysignificantfinancialcommitmentsorchangesinyourpersonal life.Youshouldalsodeterminewhat futureexpensesyouan<cipateyouwillhaveasyougrowandbuild thebusiness. Youmaywish to consult aprofessional accountant tohelp youwithgeXngthisstarted.Regardless,youwills<llneedtooutlinetheoverallscopeofinforma<ontocoverforthem,astheywillnotunderstandalloftheinsandoutsofyourbusinessaswellasyoudo.Besure to iden<fy your recurringexpenses vs your variable expenses. Your variable expenses canbedifficulttopredict,andunderstandingwhattheyarewillhelpyoutomaintainabeJercontroloverthem.
YourfirstyearexpensesshouldbedeterminedandcalculatedpriortoseXngyoursalesgoals.Thiswillhelpyoutounderstandhowmuchrevenueyouwillneedtobring in, inordertoachieveyourfinancialgoalsfortheyear.Setrealis<cgoalsfortheamountofworkandrevenuethatyouhopetoachieveinyourfirstmonthsandyears.
Start-up Tips- Thereareanumberof liJletonocostop<onsformarke<ngwhenyou’refirststar<ngout,
withthegreatestinvestmentbeingthatofyour<me;Youwillwanttobesuretoallocateanallowancefornetworkingexpensesandevents,inaddi<ontoanyprintedmaterialcosts(i.e.businesscards,postcards,etc.),butyoumaywishtoresistlargemagazineadver<sementsorotherhigh-costmarke<ngcampaignstocontrolcostsinthebeginning.
- If you intend topurchase inventory rental items,be sure toprovideyourselfwitha regularallowanceforthistokeepyourinventoryfreshandcurrent.
- Ifyouran<cipatedrevenueincludesthatofalargestagingprojectortwo,besuretoaccountforanyproject-relatedexpensesforthatmonthaswell.
- Anyexpensesthatyoumaybeabletoholdoffoninves<nginun<lthebusinessgrowsshouldbeaccountedforinfuturemonthsoryears,toallowyoutosufficientlyplanfortheseastheyarise.
Your sales and costs forecast should view aminimum of twelve (12)months out, and be able toprovide youwith a realis<c profit/loss projec<on for your yearend. Thiswill also allow you to setmonthlygoals forwhatyouwish toachieve,andgiveyousomething towork towards. Ideally,werecommendviewingfive(5)yearsforward,andupda<ngthisasyourgoalsand/orgrowthchanges.
Forecasting SalesInyourfirstyearofopera<on, theexerciseof forecas<ngyoursalescanbeespeciallychallenging.Startbyaskingyourselfsomesimpleques<ons:
- Howmuch<medoyouhaveavailabletoserviceyourclients?
- Howmuchexposurewillyourbusinesshaveintheini<almonths/yearofthebusiness?
Be realis<candbeconserva<ve–whileweallwant toaimhigh,everymarketwillbedifferent intermsofhowwidelyacceptedhomestagingasanindustry is,andhoweducatedthehomeownersand real estate agents are, and un<l you are actually out thereworking, it can be challenging toan<cipate justhowmanyprojects youwill secure in thebeginning–be conserva<ve,butmake ityourmissiontoEXCEEDyourforecastedgoalseachmonth.
Es<matehowmanyconsulta<onsyouwillbookeachmonth,takingintoconsidera<onanexpectedgrowth over the months and years, as well as the natural peeks and valleys of the industry,dependingonthe<meofyear.Basedontheaddi<onalservicesthatyouwillbeoffering,es<matehowoKenyouexpecttoupsellyourclientstotheseservices.
Cash Flow
Mostofyourexpensesforaprojectarepaidbeforethatprojecteverstarts,sobesuretobecarefullymanageyouraccountspayableandreceivablesinordertomaintainasteadycashflow.
- Setstandardpaymentterms
o Whenispaymentdue?
o Willyourequestadownpaymentpriortocommencingwork?
o Whatlatepaymentpenal<eswillyouenforce?
- Choosewhichpaymentmethodsyouwillaccept
o Creditcardpayments
▪ Fundsareusuallydepositedintoyouraccountwithin5businessdays.
▪ Creditcardmerchantproviderswillchargeafeeforaccep<ngcreditcardsthatcan vary by card. This is usually a percentage of the transac<on, plus astandardtransac<onfee.
o Cheque
▪ Personalcheques,unlesscer<fied,canresultininsufficientfunds.
▪ Bankswill some<mes choose to hold a por<on of the funds deposited fromyouun<ltheycanverifythattheaccountholderhasthefundsavailable.
▪ Non-sufficientfundscanresultinpenaltychargestoyouraccount,andwills<llrequirethatyoucollectthefundsfromyourclient.
o Cash
▪ Youknowwhattheysay,cashisKING!Whileprobablytheleastcommonformofpayment,itisonethatiseasytomanageasabusinessowner.
o E-Transfer
▪ Thanks tomodern technology, we now have the ability to accept electronicmoneytransfers.Inordertoallowthis,youwillneedtoensurethatyouaresetupforonlinebankingwithyourbusinessaccount.Checkwithyourbanktogetthis set up if youhaven’t done so already, andprovide theemail address toyour clients for accep<ng this type of payment. There is generally no fee toacceptane-transfer,sothismethodisasgoodascash.
o Other
▪ If you accept anyotherpaymentmethods, be sure to examine thepros andconsofeach
• Eg:Moneyorder,Bitcoin,etc.
- If your accoun<ng soKware offers an auto-reminder op<on, set these up to automa<callyremindyourclientsofpaymentscomingdue,orpastdue.
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