The Cost of Doing Business 3 - Styled, Listed, and Sold | Home … · The Cost of Doing Business The costs of launching, and maintaining, a home staging business will vary depending

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


- 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.


- Amee<ngatthehometoreviewandevaluatetheprogressandnextsteps

- Reviewfollow-upques<onsthatyourclienthas

- Reviewtheworkthatthehomeownershavecompletedsofar

- Follow-upreport

Photo Prep Staging Services Thisserviceu<lizestheitemsthatahomeownerhasinordertostyleandstagethehomeforsale.Again,youmaychoosetonamethisservicesomethingelse.


- Your<metore-arrangeandstylethehome

- Stagingassistant(ifneeded)

Decluttering and Organizing Services Theseservicescanbenefithomeownersthatareselling,aswellasthosethatwishtoremainintheirhome,butwanttoreclaimthespace.KeepinmindthatwhenitcomestocluJer,therecanoKenbesomeunderlyingreasonsforthis,soyouwillwanttotreadlightlywiththeseclients.Some<mesit’ssimplyamaJerofbeingtoobusytoproperlykeepupwiththings,butother<mesitcouldrelatetolargerpsychologicalconcerns,sobeverymindfulofthiswhenperformingyourini<alconsulta<onorevalua<onwiththeclient.


- 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.


- 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.


- 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.


- Amee<ngatthehomewiththehomeownertoreviewthehouse


- 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.


- 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.

Documents

The Cost of Doing Business 3 - Styled, Listed, and Sold | Home … · The Cost of Doing Business The costs of launching, and maintaining, a home staging business will vary depending