When your home staging business starts feeling growing pains should you build a home staging team, or refer excess work to other local home stagers? This isn’t a one size fits all business, and the right answer may be different for everyone reading this blog. In either case, it is important to understand what you want from your business model, both long and short term as well as your daily routine.
The pros and cons of building a home staging team
As most people know, this was an area that really propelled my home staging business. Enjoying the marketing part of my business, the cat and mouse game of getting and staying in front of customers, more than the actual hands-on staging process made building a home staging team a no brainer for me. The trick was finding people who I could trust with my business. Sure, they didn’t have to handle the marketing or finances, but they represented my company and as an extension were representing ME.
Who do you trust with your home staging company’s image?
Not only do you have to worry about general professional appearance and friendly relationships, but what if your new team member gives poor recommendations? This has happened to more than one big time home stager that I know. When they find out from a customer that the advice or behavior has been less than fabulous, heads are likely to roll. We take our reputations seriously and one bad encounter can have tremendous consequences.
In another situation, probably less unique than I would like to think, I had one team member who started taking her own customers and having the customer pay her personally for consultations. Apparently this had been going on for months. We only found out about it because a customer couldn’t reach this consultant one day and was in a hurry to lock down services for a new listing. When we arrived and asked for a check, he wanted to know the stager’s name so he could make it out to her….. not the company. BUSTED.
Unfortunately it can be really easy to not know what’s really going wrong out there. Hopefully you maintain a good enough relationship with your customers that they’ll tell you when something sees fishy, but often they don’t know. This is another great reason to educate your agents on how your business is run. This way they’ll keep you informed when you aren’t there.
Legal and tax liability for home staging team members
Are your team members independent contractors or are they employees? Do you know the legal and tax related liabilities, differences and consequences of each option? You may think that you can simply claim a stager as an independent contractor but by the law, if you control their schedule or the way they work, they may legally be considered an employee. These things get tricky and if you aren’t careful, they will bite you in the end. That is not to say that an independent contractor isn’t a valid option. You just need to understand the laws and liabilities.
What happens when a team member leaves your company
Another consideration, whether hiring an employee or using an independent contractor is the idea of what happens when they leave your company? If you want to have an enforceable no-compete clause, then really you need to have had an employer-employee relationship.
How will you handle customers that your home staging team member serviced when they were working for you? Will you notify the customers, and if so, what will you say to them? What if you find out that your customers are now working with them and their new company?
How will you handle proprietary information, like flyers, pricing, systems, etc? Have you just given your competition your best kept secrets?
Do you want to stage, or do you want to manage a team?
This may be one of the most important questions to ask yourself when deciding whether it is better to refer your excess business to another home staging company, or build a home staging team. Where are your passions? Do you really want the excess paperwork, regular communication, liability, and potential lack of control of adding someone to your company or would it be easier, and better to simply give up the business temporarily? Again, understanding the way you work and how you want your company to run down the road is an important part of the puzzle.
Want to know more? Take Linda Barnett’s Team Building for Growth and Success online course
Referring excess business to another home staging company
This leads us back to the idea of simply referring work to another home stager when you find your schedule too full. This is also where strong communication and knowledge of your local competition plays a big factor. Local RESA chapters can help create a stager alliance and referral base. Busy stagers can refer work to other competent professionals who haven’t quite hit their stride yet. Since both members belong to the local chapter, and both members have signed a code of ethics agreement, the relationship (hopefully) should be built on professionalism and trust.
Getting paid a referral fee by other home stagers
There are a lot of differing opinions on when a referral fee is appropriate. In my opinion, I treat this as any other real estate transaction. If you were a Realtor, you would typically pay a 25% referral fee, of the commission paid, to the referring Realtor. For a $200 consultation, that means a $50 referral fee. While no one really wants to make less for their work, the truth is that this is business you would not have otherwise had. If you don’t like the referral fee rate, then negotiate (before you take the referral) or decide not to take it.
If you have another system worked out with a local home stager. That’s fine. Again, this is not a one size fits all business. Just be sure that all of the negotiations have happened before you take the referral to avoid any hard feelings.
Whose customer is it?
Now this is where things can get a bit sticky. If the customer is a new one, and they’ve never had any loyalty to you, chances are that they will probably become the customer of the referred home stager. If they are a good customer that needs service now, but you can’t help them, then they will probably return to you for future business. In either case, whatever they decide, they are the customer and they’ll decide who they want to work with. If you decide to refer business out to another home stager then this is a risk you’ll need to be willing to take.
Just like commissions, future marketing and whether the referred stager is going to solicit to this customer should all be determined before the referral is given. A clear understanding of what’s going to happen, before it does will save a lot of strife and bad feelings.
Which is right for you? Will you build a home staging team, or refer the work?
So, have you decided what the right course of business is for you? It’s not an easy choice. The variables are wide and deep. Ultimately we need to support the decisions of our fellow home staging industry professionals. The reasons you made your choices on building a team, or referring work to another local stager may not apply to them.
If you want to learn more about building a home staging team, take Linda Barnett‘s Team Building for Growth and Success course. This online module is only $149 and will provide in depth information on the following subjects:
Home Staging Team Building for Growth and Success
- Identify the skills and functions needed to create your dream team
- Determine a staffing structure that maximizes productivity and profit
- Maximize the effectiveness of your Independent Contractor Agreement
- Recognize the optimal time to hire members.
- Recognize the advantage of working with newly-certified and experienced stagers
- Enhance how you recruit, train, compensate, and retain team members
- Enhance your company by working with external groups and resources
- Recognize the importance of maintaining your team’s tools for success
- Follow the best practices of team building
Buy this course now, only $149.