Thursday, March 28, 2024 | The Latest Buzz for the Appraisal Industry

DIY Business

This article was originally published in the Second Edition Spring 2016 Appraisal Buzz Magazine.

It is one thing to be the best appraiser in your area. It is quite another to simultaneously run a successful business. So, how does one wear the two crucial hats of both technician and CEO effectively? Here are five steps to correctly build and maintain a flourishing appraisal business.

Set it Up Right

The first step in business success is setting it up correctly in the beginning. Which business structure is right for you? You are not going to like this answer, but “it depend.” It depends on both your current and future business goals. Are you a one-person shop? Do you plan on always being a one-person shop? Do you eventually want to have employees? For most new business owners, the answers to these questions are currently unknown. My advice is to plan ahead for growth. An LLC is probably the best choice for most appraisal small-business owners. It provides the same “corporate veil” protections of a full-fledged cooperation, without having to deal with all of the contrived board of directors meetings, annual meeting notes, etc. Even if you are a single-person shop and you do not receive all of the tax benefits, an LLC still gives you some legal protection if a disgruntled borrower were to sue you. You are the expert in your field. Don’t be “pennywise and pound-foolish.” Hire the right accountant and attorney to ensure you have the best structure for your business.

Delegate

Far too many appraisal business-owners are trying to do it all themselves. If one ever hopes to grow and be successful for the duration, learning and utilizing the law of delegation is a necessity. Simply put, the appraiser does not have to do everything. There is much that can and should be delegated to others. Hire the best and train them well. It will reap great rewards in the future if one is willing and able to place more of the mundane on the shoulders of others, allowing you to focus in on where your time should be spent; appraising!

Follow Up

Far too many bosses make the mistake of hiring well, but then they neglect their employees. Staff members are not pieces of equipment. They are people with feelings, challenges, and life experiences. They need to be talked to, followed up on, and managed, if you hope to develop a productive, and seamless business model that lasts. Regular one-on-one interviews and staff meetings are crucial.

Remember Where the Buck Stops

There is not much of the appraisal process and business aspect that cannot be delegated (depending on your client’s needs, of course). However, liability is a big issue here.  Remember that you, the CEO and the Chief Appraiser, are ultimately responsible for the health of the ship. You are the captain. It is your name on that report. The boat floats or sinks with you at the helm.

Schedule Time to Regularly Work on Your Business

When was the last time you calendared time away from the office and turned off the phones and email and just focused on your business? Successful business owners do not allow themselves to get so steeped in the day-to-day minutia of being a technician that they forget their more important role as owner of the business. Appraisal offices are not static. Change is a constant. You must constantly be vigilant to what is working and what needs to be tweaked. This simply cannot be done effectively unless you take time out on a regular basis to OINII.

Being an incredibly skilled appraiser is no small thing.  It is at the heart of who you advertise yourself to be. You are a valuation expert. Your clients expect the very best. However, if you do not effectively run your business, you will eventually fold and those incredible skills will become dormant.

If you would like to read additional articles from the Second Edition, Spring 2016 of the Appraisal Buzz Magazine, click here for our digital version.

Have content of your own that you would like to submit? Email comments@appraisalbuzz.com.

Brent Bowen

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