Starting a Home Staging Business

Starting a home staging business, in many respects, is no different than starting any other small business. There are customers to satisfy, work to be performed, expenses to be paid, taxes to pay, records to keep, marketing to be done...and the list goes on.

You should think about your new business in very rational terms - it should make you money in addition to being something that you enjoy doing. Planning and budgeting for success is a vital step in starting a home staging business. After all, you don't want this to turn into a hobby where you are not rewarded monetarily for your efforts.

Starting a successful home staging business requires that you plan for success and budget for profits.

As with any endeavor, it helps to visualize what your successful business will look like.

• What will your business look like a year from now in terms of sales and profits? Five years? Does your research indicate these sales levels are possible and sustainable?
• Will you have to hire employees? This will require time away from your work production to hire and train a staff. You need to factor this into your budgeting as well as allow for payroll expenses, payroll taxes, employee benefits, etc. Perhaps taking on a partner might alleviate some of the administrative burden. This could be something to consider if your business does very well and you are overwhelmed.
• Will you need to rent office space when you start your home staging business, or will it be possible to do most of the work from home? Check with your local municipality on laws relating to home-based business and whether you will need a business license. Also make sure that you can have a home-based business in your community or complex. Some towns prohibit home businesses. Condominium by-laws also regulate the types of activities that are allowed so you will need to make sure you are okay.
• How will you handle customer and vendor communications? Will you need an answering service or land-line phones, or will you do everything with cell phones and voice mail? You will need to present a professional image so consider how you will communicate carefully.
• You will need a website. All businesses should have a website -- you never know how a potential customer will find you and the web is getting too big not to be a part of it - local or international. We cannot recommend SiteBuildIt! strongly enough. You will not have to hire a programmer and the price per year is all inclusive. For more information on this life-saver of a service, click here.

It is not possible to guess exactly how profitable your business will be, but it is possible to estimate based on your best guess as to how much revenue you will bring in and what your expenses will be.

• Once you have a guesstimate budget, you can see exactly what potential your business might have. If there isn't a profit at the end of the year, you might want to rethink your business plan. Can you add other related services to boost revenue? Is there a way to trim expenses?
• As the months progress, you can see how your actual numbers are tracking against your budget. This way, if revenue seems behind for the year, you can do more promotions, etc. to try and make this shortfall up. The same with expenses, if you are spending too much, you can trim expenses the rest of the year to make sure you have a profit.
• Our other recommendation for planning and budgeting is to get QuickBooks software to keep your financial records or another type of bookkeeping system. Even if you don't know anything about accounting, it will make your administrative life a lot easier. If you can write checks and use a keyboard, you can figure out QuickBooks. The bonus is that your accountant can just take your QuickBooks data to do your taxes, saving your accountant time and you money. If that's more than you want to take on, why not try our Home Staging Business Kit. In addition to bookkeeping forms and profit trackers, it has every form you need to start your own home staging business.

• QuickBooks will also help you with budgeting, even if math is not your thing. The software has a budgeting feature that lets you forecast your profits for the year based on your best assumptions - work that would take you hours by hand with a calculator. This program is indispensible in our business.

Although budgeting is not an exact science, you need to have a plan and you need to start somewhere. As the years go on, you will get better at budgeting more accurately.

A home staging business can have more than one source of revenue. Of course, you charge for your time and/or labor when you physically work on rooms. You can charge by the hour or by the room or by the project.

But you can also charge for consultations if you will just be advising homeowners on what to do to stage their rooms. In this case, they will be doing the work, you are just giving them the plan. You will most likely charge a lesser fee per hour for this service since it is just the plan, not the labor.

When you set a price for your staging services, you need to consider what your time is worth. If you value your time at $25 per hour, then that is what you should charge for one hour of staging labor. Don't forget to add in any prep work (extra cleaning or organizing) in your time calculations. Be sure to check what others are charging for their staging services in your area. A lot of competition means that there will be a lot of price competition -- and pressure to lower prices even further.

What is a fair price? That's an age-old question... You charge enough to make a profit, but not too much so as to attract new competitors. See where the time you spent budgeting expenses comes in handy? You know what your costs are, you know what your time is worth, you know what others are charging.... somewhere in there is a price that meets your goals.

A handy tip to remember is that price and volume are inversely related - the higher the price, the lower the demand and the fewer hours you can sell. Especially in the tough real estate market we now find ourselves in....everyone is price sensitive. Just don't price yourself too low! You need to make a profit AND you don't want to cheapen the value of your services.

Other costs will be made up of telephone and internet expenses, gas and mileage, and marketing and promotion. Factor in a fixed budget for marketing (advertising and promotion). As a new business, you will need to get the word out that you are "open for business" and that will require a marketing plan. What a nice segue into our next section Marketing Your New Staging Business.

A lot to think about, we know. But you want to present yourself as a serious businessperson, and to do that well requires preparation and planning!

Return to Starting a Home Staging Business - Planning and Budgeting.