One of the aspects I love most about the home staging industry is the overwhelming positivity and support among stagers who are members of one or more of the home staging trade associations available to join, and/or graduates of the same training and certification programs. These associations and training programs offer private Facebook groups where we can share advice, compare business practices and offer each other encouragement. These groups are particularly welcoming to new home stagers, and some even welcome those who are merely still exploring the possibility of starting their own home staging business. But in the spirit of always remaining positive and to avoid discouraging the newbies, veteran stagers are sometimes afraid to be completely honest about much hard work and overhead costs are involved in starting and maintaining a home staging business. So I decided in the spirit of transparency, and for the benefit of those considering starting their own home staging company, as well as educate the home sellers, real estate agents, brokers, and investors/house flippers who have a hard time understanding why home staging isn't cheap, I put together a list of all the overhead expenses involved with being in this business:
- Training and certification. These can cost as much as $3,000 per program, depending on how extensive the training and how many aspects of the business will be covered in the curriculum. Not every home stager has gone through a training and certification program, and there are many home stagers that are very talented at interior design (as they should be to be good at staging), but without going through one of these programs, they may not understand that home staging is more about marketing than it is interior design. A good training program will cover the marketing strategy behind home staging, as well as good pricing models and other best business practices. Many home stagers go out of business after only a couple years because they don't understand how to price their services to cover their overhead costs and still make enough profit to grow their business, let alone simply pay their own home mortgage and living expenses. In the meantime, their lack of knowledge on how to stage effectively to market a home and their low pricing causes damage to the entire industry by 1) causing the victims of bad, ineffective home staging to believe that staging doesn't work; and/or 2) leading consumers to believe that staging a whole house with a staging company's furnishings should only cost $1,000-$2,000... or even less.
- Membership dues. While we're on the subject of trade associations, those come with annual membership dues, registration fees for conventions, travel and hotel expenses (if those conventions are out of town/state), and additional fees for some or all of the continuing education classes they offer. If you're a home seller, real estate agent, broker or investor/house flipper considering a home staging company, I recommend asking which trade associations they belong to. It might be a red flag if they say "none", because there is no government entity that regulates the home staging industry or requires a specific license to be a home stager. Home staging associations were created as a way for the industry to regulate itself by requiring their members to adhere to a set of standards and code of ethics. And not only is it wise for a home stager to join associations specifically for the home staging industry, it's also recommended that they join their local real estate associations for the opportunity to network and build relationships with the local listing agent professionals in their area, and there are, of course, costs of membership for those associations/organizations, as well.
- Liability insurance. Again, I'm going to address those of you that may find yourself in the market for a home stager: Be sure to ask them if they carry liability insurance. If they seem caught off guard by the question and give you a deer-in-the-headlights kind of look, that's not a good sign. Sadly, there are many people who call themselves home stagers who know so little about how to run a legitimate business that having liability insurance is something that has never even occurred to them. You'll want them to have it in case a member of their team accidentally causes any damage to your property.
- The cost of having employees. Even owners of really small, boutique home staging companies will eventually break down and hire at least one or two people to assist them, even if they use a third-party moving company to transport their assets to and from the houses they stage. These employees may come in the form of administrative assistants, movers, warehouse managers, dedicated sales and marketing team, assistant stagers/stylists to help style the houses, and so on. The larger companies have as many as 20 or more employees on their payroll at any given time. Not only are there hourly wages or salaries to consider, but any company with employees will also need a service of some kind (such as ADP, Intuit, or other provider) to manage their payroll, as well as money to cover unemployment and workers compensation insurance premiums. Also, all employees should fall under the W2 category, rather than "freelancers" or "independent contractors". The laws vary from state to state in regard what qualifies as a 1099 independent contractor vs an employee, but regardless of the state, not having employees that are covered under workers compensation insurance puts the staging company's clients at risk of being sued if an "independent contractor" gets injured while staging the client's home. Furthermore, the staging company is at risk of getting reported to their state (usually by a disgruntled, former "independent contractor") and facing thousands of dollars in back taxes, interest and fines.
- Truck rental fees, leases or payments, and/or fees paid to third-party moving companies. In Southern California, where my company, Larimar Home Staging, is located, a third-party moving company charges a minimum of $125 and as high as $400 per hour to move furniture locally. If the staging company opts to lease or purchase their own trucks, there's still fuel, insurance, oil changes, tire rotations and other regular maintenance, repairs, DMV registration and where to park these vehicles when not in use (which may come at an additional cost, as well). If the company wants the truck to be branded, it will cost several thousand dollars to have it wrapped. Furthermore, even if a third-party moving company is hired each time a house needs staged, the home staging company will often find themselves in need of a rental truck to transport their larger purchases to their storage unit(s) or warehouse when they are shopping for large artwork, tall faux trees, large area rugs, and larger furniture pieces.
- The cost of all the things a home staging company uses in homes, which we in the industry refer to as "inventory" (but would probably be better described as tools or assets). This includes (but is definitely not limited to) sofas, loveseats, chairs, dining tables, dining chairs, bar stools, coffee tables, end tables, cabinets, console tables, dressers, desks, lamps, lampshades (which are constantly getting damaged and need to be replaced), extension cords, light bulbs, bed frames, headboards, box-springs, mattress toppers (but not always real mattresses, which is a subject for another post), bedspreads, bed pillows, throw pillows, throw blankets, artwork in all sizes, area rugs, towels, shower curtains and tension rods, fake TVs, fake fruit, fake plants and trees, pots or baskets for the fake plants and trees, books (OMG, so many books), and lots and lots of other accessories (like vases, figurines, etc) to create vignettes for styling shelves, tables, etc. Oh.... and toys to stage the occasional playroom, small exercise equipment to stage exercise rooms, wine bottles for wine cellars.... it's endless. And the purchasing of these assets never ends. Items that start to show too much wear, or are no longer on-trend (in style) will need to be replaced, and as a staging company grows and starts getting more and more homes to stage, new items will constantly be needed.
- Storage units or a warehouse to store all the stuff listed above. Most stagers start out with one or two large storage units. Then they add another... and another... until they eventually realize it would be more cost effective to lease a warehouse. Then, sooner than they usually anticipate, they have to move to a bigger warehouse.... and then a bigger one, and so on....
- Insurance for the warehouse, which the landlord will require.
- Insurance to cover the assets while it's in the warehouse and during transport. However, that same insurance policy usually won't cover the staging company's assets while they're in clients' homes, and even if it did, the frequent claims would cause the monthly premiums to skyrocket, so you'll find nearly every stager has a clause in their contract holding their clients responsible for loss or damages while their assets are in the clients' possession.
- Lots of large, heavy-duty shelving and racks to organize all that stuff and maximize storage space.
- Dollies, carts... anything with wheels to move all that stuff around and forklifts (for the larger companies fortunate enough to have a lot of vertical storage space for pallet racking.
- Tools to complete the installation of a stage. A power drill for assembling furniture, measuring tapes (a laser measuring tool is also recommended), levels (large and small and, again, having a laser version as well as the traditional style in the toolbox is recommended ), a hammer and lots of nails, screws, hooks, wire, etc for hanging artwork, spot cleaner for upholstery, glass cleaner, furniture markers or pens for touch ups when the furniture gets scratched.... Of course, protective floor runners should be on hand to put down in the high-traffic areas to protect the client's flooring, padding to line door frames and stair railings, etc. Every home staging company should also pack a vacuum, broom, dustpan, trash bags and basic cleaning supplies to clean up after themselves after both installation and destaging. (We're not cleaning companies, but a good home staging company will clean up any messes they make while in the home). I'm sure I'm forgetting a ton of things (I'm just listing the stuff that comes to mind). And...a staging company needs multiple sets of all these things if they have multiple teams installing multiple stages simultaneously.
- Legal fees: Attorney fees to review contracts and handle any disputes between the staging company and their clients or employees, trademark application and filing fees, collection services as needed (hopefully, not often), taxes, a CPA to prepare and file the taxes, permits (some states, like mine, require a special permit just to transport furniture), licensing (there is no such thing as a license specifically for home staging, but every home staging business will be required to have a general business license to operate), fees associated with the company's business structure (for example, in California, we have to remit a minimum annual LLC tax payment of $800 to the state, as well as a fee of about $20 to renew the LLC, which is called a "Statement of Information")
- Marketing. Everyone in business needs business cards (they're very inexpensive, though, if you use Vista Print), and home staging businesses should also have full-color brochures to hand out. Hiring a professional photographer to photograph the staging for the company's portfolio and marketing materials is recommended. Also, there's a ton of branded swag that one can pass out to existing clients and prospective clients to stay top of mind. I've learned there are certain marketing strategies that are just a waste of money, such as HomeAdvisor or any other company promising quality leads (they're not), but Google Ads can be effective if one can afford them (but most small home staging businesses can't afford the ad-spending budget Google suggests to be effective). Social media marketing is the most commonly recommended marketing strategy for home staging businesses, but there can even be some costs (although minimal) involved in creating good graphics for even organic posts as well as the cost of paid ads on Facebook, Instagram, LinkedIn, etc. Of course, every business should have a website, and there are costs involved with creating it and hosting it, as well as Search Engine Optimization (SEO). Even if a company chooses to handle their own SEO, there are some apps they should subscribe to that will aid in their efforts. SEO is an extremely time consuming endeavor, but very important, and a business owner who may find themselves too busy running their business for SEO may elect to hire an employee to do it in-house or farm it out to a third party service. I've only just barely touched on marketing, which can involve dozens of other strategies and expenses, but I'm going to move on.
- Office supplies. The usual suspects: Copy paper, laser toner (I don't recommend ink jet printers), file folders, binders, labels, staplers, staples, paper clips, pens, markers, highlighters, scissors, etc.
- Subscriptions to various apps and other services to help the business run efficiently. Applications to manage the company website, word processing, spreadsheets, slide presentations, photo editing, cloud storage, video editing, graphics and illustration apps for creating marketing materials, bookkeeping, Prospect and client relationship management (CRM), project management, an electronic signature service for contracts, payroll management, inventory management and tracking, apps for employees to clock in and out, GPS tracking for trucks and/or employees, and much more: Here's a list of apps and services we use: Microsoft 365, Dropbox, Adobe Creative Cloud, Airtable, Trello, Laughing Squid, Thrive Theme Builder for my WordPress website and blog, Dubsado (thinking of canceling that one, though), Canva, LastPass, Norton 360, Stageforce, MileIQ, Legal Zoom, and Quickbooks Online. I'm also the free versions of several apps and, if I find it necessary at some point, will upgrade to their paid subscriptions.
As you can see, there are a lot of expenses that come with running a quality home staging business. I enjoy it, but it's hard work and costly. I recommend anyone considering getting into this industry take all of this under very careful consideration.