Top Ten Misconceptions About The HRN Business

By Deb Cohen

1. Contractors are too busy already and don’t want extra work. As one of my contractors once told me: “A good contractor won’t turn down a good, paying customer.” The client may have to wait for the job to be scheduled but most of my clients feel that good contractors are worth waiting for.

2. The HRN business requires costly advertising. This is a word of mouth type of business and a lot of job requests are generated through networking in your community, PR and direct mail. It’s not expensive to promote the HRN business. In fact, many HRN owners generate their first jobs before they even launch a promotional campaign.

3. You need to live in a heavily populated area to run a successful HRN business. Actually, this is a very local business. Most contractors won’t travel far for work therefore an HRN needs to operate locally to start. Once you’ve established a network in your immediate area, you can expand into new markets and create new networks of contractors to handle the business.

4. A local HRN business won’t be able to compete with established, national contractor referral businesses. As CBS Marketwatch recently reported: “There's probably no project that homeowners won't first research online, but when it comes to inviting contractors to their remodeling project, they're less willing to depend on electronic means.” In fact, online referral services like Improvenet and ServiceMagic haven’t posed any competition to the hundreds of HRN’s operating nationally.

5. You need contracting experience to run an HRN. The HRN owner is responsible for marketing and promotion and the contractors represented in the network are responsible for the technical aspects of the job therefore no contracting experience is required.

6. The contracting business is male dominated and most contractors won’t take a woman seriously. Just the opposite—many of my contractors tell me that they enjoy talking to a woman after working with men all day. Besides, if you generate business for them--male or female--you’ll ultimately earn their respect.

7. The HRN owner is liable in case of a mishap on a job. The contractor is ultimately responsible for his own work and there are numerous safeguards in place to protect the HRN owner including a signed liability clause, operating procedures and insurance provisions.

8. Running an HRN business means that my phone will be ringing in the middle of the night with emergency calls. An HRN deals with home improvement “projects” not “emergencies”. Of course it’s your prerogative if you’d like to set up your business to provide emergency referrals.

9. The HRN owner goes onsite to check out each job before referring it to a contractor in their network. The HRN owner never goes to a customer’s home to check out a job. In fact, I handle more than 90% of my business by telephone.

10. If I launch an HRN, I have to use the name “Home Remedies”. Actually, the name Home Remedies^™ is trademarked and each HRN operates under it’s own name.

Debra Cohen is owner and founder of the Homeowner Referral Network (HRN) business — a home based contractor referral service business — and author of The Complete Guide To Owning And Operating A Successful Homeowner Referral Network. For more information about how to launch an HRN in your area, visit the HRN website by clicking here.