First, you have to answer these questions below. You will have to estimate the answers to many of them. We recommend that you give conservative answers. For example, if for Question T you believe that offering the Buy-Back Guarantee will not permit you to command a higher fee, you should answer $0.00. Some questions you will be able to answer accurately. For example, Question A asks how many inspections you perform a year.
Then, plug the numbers into the formulas below to calculate the net financial effect of participating in InterNACHI's Buy-Back Program.
Now, let's calculate the total number of additional inspections we can attribute to the Buy-Back Program. This is simply the additional revenue before the increase in fees divided by the average fee for an inspection, or:
{[E/100 x (C x (D/100) x B] + [(H/100) ) x ((100-G)/100) x F x 52 x B] +
[(M/100) x (J x K) x ((100-L)/100) x I x B] + [(O/100) x (N/100) x
(A x B)] + [(Q/100) x (P/100) x (A x B)] + [(S/100) x (R/100) x (A x B)]}/B.
Multiply this by T to get the amount of the additional revenue from the increase in fees attributed to the Buy-Back Program, or:
{[E/100 x (C x (D/100) x B] + [(H/100) ) x ((100-G)/100) x F x 52 x B] +
[(M/100) x (J x K) x ((100-L)/100) x I x B] + [(O/100) x (N/100) x
(A x B)] + [(Q/100) x (P/100) x (A x B)] + [(S/100) x (R/100) x (A x B)]}/B x T.
Now, let's calculate the total additional revenue of participating in the Buy-Back Program. This is simply the additional revenue from the increase in inspections attributed to the Buy-Back Guarantee being included on your website, plus the additional revenue attributed to the Buy-Back Guarantee being included in your phone-answering scripts, plus the additional revenue attributed to the Buy-Back Guarantee being included in your real estate office presentations, plus the additional revenue attributed to the Buy-Back Guarantee being included in your brochures and literature, plus the additional revenue attributed to the Buy-Back Guarantee being displayed on your inspection vehicle, plus the additional revenue attributed to the Buy-Back Guarantee being the main reason past clients refer you, plus the additional revenue from the increase in fees attributed to the Buy-Back Program, or:
{[E/100 x (C x (D/100) x B] + [(H/100) ) x ((100-G)/100) x F x 52 x B] +
[(M/100) x (J x K) x ((100-L)/100) x I x B] + [(O/100) x (N/100) x
(A x B)] + [(Q/100) x (P/100) x (A x B)] + [(S/100) x (R/100) x (A x B)]} + {[E/100 x (C x (D/100) x B] + [(H/100) ) x ((100-G)/100) x F x 52 x B] +
[(M/100) x (J x K) x ((100-L)/100) x I x B] + [(O/100) x (N/100) x
(A x B)] + [(Q/100) x (P/100) x (A x B)] + [(S/100) x (R/100) x (A x B)]}/B x T.
Let's call this U.
But
wait. The program costs $5 per inspection for every inspection you are currently
performing, plus every inspection the Buy-Back Program generates in
addition to the number of inspections you are currently performing.
This amount must be calculated and subtracted from the total revenue
increase.
The total cost of the program is simply your (total revenue plus the additional revenue from the additional inspections attributed to the Buy-Back Program plus the additional revenue from the fee increase attributed to the Buy-Back Program) divided by your (average fee plus price increase) multiplied by $5, or:
U / (B+T) x $5.
Let's call this V.
Now we have to subtract V from U to get the total net financial effect of participating in InterNACHI's Buy-Back Program.
U - V.
If U - V is a negative (in other words, if V is greater than U), the cost exceeds the additional revenue and you should not participate in InterNACHI's Buy-Back Program. If U - V is a positive number (in other words, if U is greater than V), the additional revenue exceeds the cost and you should participate in InterNACHI's Buy-Back Program.
