It makes sense that this is one the questions most frequently asked by new Homeowner Referral Network (HRN) business owners. After all, you want to launch a home-based business for flexibility and independence but ultimately, the goal is to generate more income for your family or possibly transition out of a full time job.
The short answer is that most new HRN business owners turn a profit within the first 6 months of operation. That’s pretty appealing since most new businesses can take up to 3 years to turn a profit! The reason HRN owners are able to make money so soon is that the start-up expenses to launch a contractor referral business are minimal.
To give you an idea, I’ve outlined the major expenses below:*
The expenses listed above will vary based on a few factors. For example, fees to set up a legal structure (LLC, Corporation or Sole Proprietorship) are different from state-to-state, you may currently have an office set up in your home, outsourcing printing or doing it in-house, etc. Each start-up is different but the average HRN business owner can launch with a budget of approximately $750 to start over the first 3 months.
And, the monthly operating costs for an HRN business are minimal as well. This is a word-of-mouth business that doesn’t require expensive advertising, there’s no merchandise or production costs and best of all, operating a business from home can be tax deductible!
Below are few of the monthly HRN business expenses:
On average, monthly expenses for HRN owners are no more than $300/month.
Those are the expenses, now let’s discuss income. Contractor commissions vary based on the dollar value of the job and type of service. Also, in some cases material costs will be considered. (Complete commission tables are outlined in the HRN Business Manual.) So, let’s say an average commission paid by a contractor to your HRN business is 10%. If you refer one job for $5000-$10,000, that’s a pretty good profit with no overhead!
So, if you’re still thinking about starting an HRN or Aging-in-Place Referral Network in your area, don’t let the cost deter you. Not only is this a rewarding business personally, but it can be a very rewarding business financially as well!
*Based on HRN owners who start with the Best Value Business Package which includes a website, forms, management software and graphics.