For home service professionals, understanding some of the key home service industry statistics helps to guide advertising and marketing campaigns. Specifically, there are a number of opportunities for market growth. For current business owners in the home services market and for those considering starting a new business, data helps to make informed decisions.
Home Service Market Growth
The home service market is a large and growing market. In the United States, the home service market is estimated to be worth $506 billion. The market is expected to grow at a compound annual growth rate (CAGR) of 35.81% from 2019 to 2026. There are a number of factors driving this growth and one key advantage of the home services market is services must be delivered in or at the home. For local businesses, finding a niche can lead to a great share of the home services market.
Some reasons for home services market growth include:
Disregarding the global market, the home services market in the US is highly valued by aging Americans. The aging population is leading to an increase in the demand for home services, such as home health care and home repairs. Many homeowners look to schedule professional services instead of taking on the daily maintenance and upkeep of a home. This allows older Americans to live independently well into retirement.
There are many traditional home services markets such as plumbing, HVAC, electricians, lawn care, and housekeeping that have seen significant growth. There are many emerging home services business models for older Americans. Many of these services provide personal services to a solid customer base. These services are experiencing rapid growth such as: in-home healthcare, meal prep, grocery delivery, personal shopping, and even fitness and yoga training. The home services market is changing to suit the demands of the population.
The online home services industry is experiencing a remarkable rise as working Americans often have limited time for house care. Dual-income households have less time to do home repairs and maintenance, so they are more likely to hire out these services. These households often have more disposable income than single income homes. Advertising and marketing campaigns specifically target this market growth. As the home services market is driven by demand, business owners and operators are able to focus on dual-income households.
There is significant market segmentation and a wide range of service offerings in the home services market. Some home services remain largely driven by small to medium size businesses. Traditionally, the geographical limitations of a business has limited competition and the local market size. Online marketplaces, such as Angie’s List, Amazon Home Services, and HomeAdvisor, make it easier for homeowners to find and hire home service providers. These are similar to an e-commerce platform matching homeowners with the available home services market.
This increasing internet penetration is an intriguing trend for the home services market. On demand home services now available through websites and apps can help local businesses reach new customers. Some of these platforms harken back to the days of paid yellow page telephone ads and direct mail marketing campaigns. Partnering with on demand home services platforms can help your nascent business grow, but customer satisfaction and loyalty may be to the platform. If the home services market completely transforms to rely solely on online marketplaces, the personal relationships between homeowners and local home services providers is at risk of dissolving.
For this reason, home services business owners should follow verified market research and use multiple strategic marketing tools. Home services market growth can include online marketplaces and strong digital marketing campaigns executed solely for the benefit of your business.
Home Improvement Shows And Social Media Influencers
The home services market benefits greatly from the popularity of home improvement shows. Across television, online home services channels on YouTube, social media influencers, and on demand homes services featured on streaming services, homeowners are inspired to make improvements to their homes. This rising demand may be initiated by DIY projects but often requires professional home service providers.
Which Home Services Market is Growing Quickly?
The home service market is a diverse market that includes a wide range of services. Some of the fastest growing businesses serve essential needs of homes and services that save households time. A few of these services are:
- Cleaning and maid services
- Electrical work
- Home health care
- Pet care
The home service market is a competitive market, but there are a number of opportunities for businesses that can provide high-quality services and find a unique space within the home services market.
How to Start a Home Services Business
When you are planning to start or buy a home service business, there are a few steps to follow. While many diverse businesses occupy the home services market, these steps are valuable for every business that serves homeowners directly.
- Choose a home service niche: You will certainly choose the home services market that you are most experienced. Because so many of these businesses are competitive, you may consider a specific niche. For instance, within the landscaping industry you can distinguish yourself by offering hardscape installations beyond just lawn mowing services. Within the HVAC industry, offering indoor air quality services and plumbing can attract recurring customers.
- Do your research: Once you’ve chosen a niche, it’s important to do your market research into your local demand. Marketing for home services begins with developing an ideal buyer persona. By knowing what you do and who needs your services, effective business planning as well as advertising and marketing campaigns take shape.
- Get the necessary permits, licenses, and partners: Depending on the type of home services business you’re starting, you may need to obtain certain permits and licenses. For many businesses you will need to find business partners including suppliers and vendors.
- Create a business plan. A business plan is a roadmap for your business. It should include your goals, strategies, and how you plan to achieve them. There are many great resources for creating a plan, but you should always seek out local sources.
- Get funding: Some businesses can start with very little funding. If you are entering the home services market to make some extra money in your free time, then you already have the tools and equipment to service homeowners. In most cases, you’ll need to find a way to finance your business plan including tools, vehicles, personnel, and operating space. There are a number of different ways to get funding, including loans, grants, and investors.
- Market your business: This step is often overlooked by first time business owners. In fact, marketing is misunderstood by most business owners. In the home service industry, marketing can be a powerful generator for new customers. A strong digital marketing campaign can help your business stand out across search engines, social media, and popular home services websites. Relying simply on word of mouth or traditional advertising can reduce growth and lower profit margins.
- Provide excellent customer service: In the home services market, you must have a drive to serve homeowners. Skill, talent, and knowledge are valuable but homeowners will hire and continue to hire people they like. For your business to be a success, you must bring great customer service to every new homeowner you serve.
- Stay up-to-date on trends: The home services industry is constantly evolving, so it’s important to stay up-to-date on the latest trends. This will help you to provide your customers with the best possible service. It also keeps you ahead of existing competitors and emerging technology. For instance, electricians who saw the oncoming rise in EV began offering the installation of charging equipment for homeowners. Early adopters now lead other local competitors who responded to market demand. If you can ride the wave up, then your business is seen as a leader and innovator.
- Be patient: Building a business takes time and patience. Working with a professional marketing agency can help you plan, strategize, and budget for growth. Don’t expect to get rich overnight or give up when your business plateaus. Just focus on providing excellent customer service and growing your business gradually.
How many home services businesses are there?
The number of home services businesses in the United States is estimated to be around 2.5 million. This number is not exact because some home service businesses are very small and go under reported. Part time and seasonal services like pet walking, house sitting, home cleaning, snow removal, holiday decorators are very small sectors of the home services market. Still these part time businesses often become full careers.
Among the estimated 2.5 million businesses, over 6 million people work in the home services market. The industry generates over $500 billion in revenue each year. The home services industry is expected to continue to grow in the coming years. The market is expected to grow at a compound annual growth rate (CAGR) of 35.81% from 2019 to 2026.
Key Trends for the Future of Home Services Market
Clearly there are many businesses and lots of room for growth. While older businesses may already lay claim to a market share, nimble and future minded business owners can disrupt the industry. Here are some of the key trends that are expected to shape the home services industry in the coming years:
A New Generation Of Homeowners
The rise of the millennial homeowner is underway. Millennials are now the largest generation in the United States, and they are increasingly buying homes. Unlike their parents and prior generations, these homeowners are internet savvy. Nearly all buying decisions for Millennials start with an internet search. There are crucial factors affecting outdated home service providers. Millennials are more likely to use online marketplaces to find and hire local home service providers, and they are more likely to be interested in sustainable and eco-friendly home services.
Mobile Booking Services
On demand home services market does not have to rely on third party vendors. While tech giants are aggressively pushing local businesses to pay for access to their platforms, a well designed and marketed website can save you thousands and capture valuable customer information. Young homeowners are comfortable with websites and apps. Mobile booking services give you access to young homeowners on your own terms.
Remodeling, rewiring, installing, and prepping smart homes is a major growth opportunity. Nearly every appliance in the market today considers the internet of things. Millennials expect their homes to integrate into their smartphones. This includes controlling a variety of home systems, such as lighting, thermostats, televisions, speakers, and security systems. Home service providers can help homeowners install and maintain smart home devices.
The Green Home
Millennials and the next generations of homeowners are passionate about reducing the carbon footprint. While many Americans are still driven by the dream of homeownership, green home services are highly valued. Homeowners are becoming more concerned about the environment, and they are increasingly looking for green home services. Green home services are designed to be more environmentally friendly than traditional home services.
Home service providers who embrace these ideas and other emerging desires of young homeowners are poised for success.
One example is landscapers who use gasless technology. Electric trucks, commercial lawn mowers, chainsaws, hedge trimmers, string trimmers, and other turf equipment are becoming a reality. Young homeowners are willing to pay more to go green.
Another business model that has emerged in recent years is solar HVAC. These systems account for 30-50% of a home’s energy use. Innovative HVAC companies offer solar installation that moves these appliances off the grid and into a fully renewable energy. Heat pumps have quickly emerged as an alternative to traditional HVAC.
There are new home service jobs that simply did not exist just a few years ago including energy auditors. Energy auditors help homeowners offset their carbon footprint by improving efficiency of systems and reducing energy use. This can be as simple as installing smart thermostats and insulation or as complex as installing living roofs.
The home services industry is a dynamic and growing industry. There are a number of opportunities for businesses that can provide high-quality services at a competitive price.
There are amazing opportunities for entrepreneurs within the home services market. Here are 5 informative home services industry statistics from this article:
- The home services industry is a large and growing industry. In the United States, the home services industry is estimated to be worth $500 billion. The market is expected to grow at a compound annual growth rate (CAGR) of 35.81% from 2019 to 2026.
- The aging population is driving the growth of the home services industry. Older Americans are leading to an increase in the demand for home services, such as home health care and home services they can no longer perform.
- The increasing number of dual-income households is also driving the growth of the home services industry. Dual-income households have less time to do home repairs and maintenance, so they are more likely to hire out these services.
- The rise of online marketplaces is making it easier for homeowners to find and hire home service providers. Online marketplaces, such as Angie’s List and HomeAdvisor, make it easy for homeowners to compare prices and reviews of different home service providers.
- The next generation of homeowners has emerged. Millennials have unique visions of what homeownership can be. Many are inspired by home improvement. Most are driven to reduce energy use and carbon emissions. Nearly all are focused on smart technology within the home.
In summary, the home services industry is a dynamic and growing industry. There are a number of trends that are expected to shape the home services industry in the coming years. The most successful new home service business owners will use data to plan and market their services accordingly.