The home services industry is large and growing every year. The home service market includes professional plumbers, HVAC technicians, electricians, carpenters, painters, landscapers, cleaners, and many more workers. There are an estimated 6.1 million home services professionals in the US as of 2023. This number is expected to grow to 7.2 million by 2028. The exact figure of home service professionals is hard to pinpoint. What is certain is there is market growth potential for entrepreneurs as home service providers. Understanding the data about this industry can be found in the statistics and trends.
How Many Home Service Businesses?
There are about 2.5 million home service businesses in the United States. As more households include dual income professionals and other Americans enter retirement, the number of home service businesses continue to increase in recent years. The home service market serves homeowners who are too busy or are unable to perform household maintenance and repairs.
This growth trend is consistent across many states:
How Many Home Service Businesses Are There Near Florida?
In the state of Florida alone, there are over 100,000 home service businesses in Florida generating over $100 billion in revenue and employing over 1 million people in 2022.
How Many Home Service Businesses Are There Near Texas?
This number doubles when you consider Texas. There are over 200,000 home service businesses in Texas employing over 2 million people.
Consumer Spending In The Home Services Industry
The American dream of home ownership plays an important role in driving the home service market. However, many home service businesses are used by homeowners and renters. According to the U.S. Census Bureau, consumer spending on home services in the United States was $506.9 billion in 2020.
Homes Service Market: A Competitive Landscape
Anytime a forecast for continued growth within an industry, markets will shift. The key for business owners and entrepreneurs entering the home service market is to follow the data. As the workforce expands for home service jobs, many businesses within this industry will need to rely on verified market research and accurate data collection methods to stay ahead of new players and major disruptors.
One example is Amazon home services. Just as in book sales, retail, grocery, and pharmaceuticals, the tech giant is leveraging brand recognition to compete in home services. Corporate entities like Amazon, Apps that connect homeowners with home service providers, and future technology will undoubtedly change how homeowners find and hire home service providers.
The goal of every business in the home service industry is to provide high quality professional service. As the home service market size expands, skilled business owners and operators will earn their fair share of the home service market.
Most in demand home services
Clearly, there are opportunities for home services companies in the USA to grow. Some home services are expanding at a greater pace than others. Labor statistics demonstrate the latest trends in home improvement. Existing homes need care and many homeowners are turning to professionals. Some of the most in demand home services include:
- Plumbing: Plumbing services are always in high demand, because the systems are essential for health and comfort. A common trend in the home service industry currently is expansion into multiple home services within a single brand. Plumbers may branch out or acquire electrical or HVAC businesses. This provides a pathway for faster market growth as a one call solution for all essential home services.
- Electrical: Licensed electricians are poised for strong market growth in coming years. As the electrification of vehicles, household appliances, and renewable energy like solar become more in demand, consumer spending will require the addition of charging for EV, adaptations to home electrical systems. Smart homes will be driven by devices but those devices are powered by safe and secure electrical systems.
- HVAC: HVAC services are in high demand and a home service driven by local demand. Where some unskilled services and home service products have low barriers to entry, the HVAC home service market requires certification and the ability to respond quickly to homeowners in need. Local HVAC companies are both in demand and poised for strong growth in the coming years.
- Carpentry: Repairing, remodeling, and building homes requires skilled carpenters. Carpentry services including general construction and more niche services like millwork are in high demand throughout the home service industry.
- Flooring: While major brands compete to sell flooring, many homeowners become frustrated with the fragmentation of the buying process. In the home service market, flooring is in very high demand especially for businesses that consult, design, and install the flooring.
- Pest control: Removal and prevention of infestations in homes continues to be a growing business. Like the other home services mentioned in this list, owners and operators provide a quick response and a personal comfort when homeowners are stressed about pests in their home.
- Other in demand home services include: Lawn care services especially landscape architects, arborists are in demand for busy families. House cleaning, home health businesses, and pet services continue to rise in popularity.
Most Profitable Home Service Business
The home service market is extremely broad and there are different findings to support one area of the home service as more profitable than another. Some of the most profitable home service businesses rely on strong new home sales. Whereas other businesses like heating and air conditioning can be impacted by weather conditions.
The number of home service professionals will continue to grow through almost every business in the industry. Therefore, it is most important for business owners to consider market growth as a sustainable source of revenue. Or in simpler terms, the best home service business plan focuses on what professional services suit your target market and your skillset.
Home Service Business Ideas
With more than 6 million workers employed in the home services market, there are many with the ambition and skill to become business leaders. There are a few steps to consider how to enter the home service market. These steps are similar whether you are new to the industry, a seasoned professional creating a new home service business, or a long time owner looking to expand your share of the home service market.
Home Services Business Model
The home services business model is a business model that involves providing services to homeowners. To compete within the home service market, you must consider the range of services from basic repairs and maintenance to more complex renovations and remodeling.
The home services business model is a popular one, as it offers a number of advantages for both businesses and homeowners. For businesses, the home services business model offers a high level of profitability, as there is a high demand for home services and the costs of providing these services are relatively low. For homeowners, the home services business model offers a convenient and affordable way to get the repairs and maintenance that their homes need.
There are a number of different ways to operate a home services business. Some businesses take a general approach and compete with a broad range of competitors. Other owners will find a specific niche wear competition is lower. In these circumstances, profit margin is typically far higher but the demand is likely to be less. For example, lawn mowing is highly competitive with low margins. Landscape architecture is far less competitive but there are fewer homeowners seeking these services.
By rule, the less skill a home service requires, the lower the margin and greater the competition. In these cases, it is important for businesses to differentiate themselves from their competitors. Many businesses try to do this by creating a unique brand message, offering additional or bespoke services, or expanding into multiple broad home services market offerings like HVAC, plumbing, and electrical under a single brand.
Within the home service market the most successful models focus on solving homeowners problems with greater efficiency, courtesy, and quality than other competitors. The home services market can be very rewarding when the model focuses on customer focused solutions. Likewise, the home service market can quickly collapse when a business loses focus of customer service.
Here are some of the key elements of a successful home services business:
- A strong reputation: Respect is earned and built through strong reviews and referrals. This means providing quality services, being reliable, and being honest with customers.
- A good team: This is a major challenge for many home service businesses. A home services business needs to have a good team of employees. These employees should be knowledgeable, experienced, and reliable. As the number of home services professionals rise, business owners compete not only for market share of customers but also for the share of quality employees.
- Proper marketing: A home services business needs to have proper marketing in order to reach potential customers. Working with experts in home services marketing is vital. As demand for home services increases the competition for both paid advertising and inbound marketing becomes greater. Understanding how to buy ads properly helps you grow in the home service industry.
If you are thinking about starting a home services business, be sure to do your research and plan carefully. For current business owners, planning can be a unique puzzle. With hard work and dedication, you can build a successful home services business that provides quality services to homeowners but you must create a plan for adaptation and growth as the industry changes.
Home Service Business Plan
A home service business plan is a document that outlines the strategy for the business. The plan should include information on the business’s goals, objectives, target market, marketing strategy, and financial projections.
The home service business plan is an important tool for businesses of all sizes. It can be used to secure funding, attract investors, and guide the business’s growth. Within home services, the business plan is always changing. An annual review of the plan is recommended to stay ahead of competitors.
For example, reading verified market research, learning about the number of people employed in your industry, and forecasting trends can guide your business forward.
Here are some of the key elements of a home service business plan:
- Executive Summary: The executive summary is a brief overview of the business plan including the mission of the organizations, your goals, and a detailed examination of your target market.
- Company Description: The company description should provide more detail about the business, including its history, ownership structure, and products or services. As competition for high quality employees increases, the company culture can attract the right type of employees.
- Products or Services: The products or services section should describe the products or services that the business offers. This helps to understand potential changes in your specialities and unforeseen trends in local market demand.
- Market Analysis: An exhaustive research into the home services industry, including the size of the market, the growth rate of the market, and the key players in the market. There are often third party sources for this information especially in high demand homes services.
- Target Market: Beyond the ideal market, this information breaks down the actual customers within your business. This includes information on demographics so you can compare that to the executive summary of the target market. If necessary, leadership can adapt based on the results contained in your CRM and sales history.
- Marketing Strategy: In order for a home services business to grow and reach the target market, you will need to outline the business’s marketing plan. This includes information on the business’s target market, the marketing channels that the business will use, and the marketing budget.
- Financial Projections: This provides information on the business’s expected financial performance. This includes information on the business’s revenue, expenses, and profits.
How to Create a Business Plan for the Home Services Market
New entrepreneurs and experienced home service business owners often make the same errors when creating a business plan. Often it is helpful to work with a consulting or marketing team to create a home service market report and analyze your business. These four tips help guide the writing of a business plan:
- Be clear and concise: Your business plan should be easy to read and understand. Avoid using jargon or technical language.
- Be realistic: Your business plan should be realistic in its goals and projections. Don’t overstate your potential or underestimate the challenges you will face.
- Be specific: Your business plan should be specific in its information. Provide details about your target market, your marketing strategy, and your financial projections.
- Be flexible: Your business plan should be flexible enough to adapt to changes in the market or in your business. Be prepared to make changes to your plan as needed.
Writing a home service business plan should be driven by data. This presents a challenge for young companies, companies looking to expand into new markets, and companies with poor data management.
Home Service Marketing
The changing landscape of home service marketing provides a great opportunity for success. Data about the industry as a whole has created a new way of marketing businesses. At Valve+Meter we have a research team dedicated to understanding the trends within home services.
When data from your company combines with research about the marketplace, marketing can help implement your business plan. In fact, it can guide a lot of your strategy. The goal of home service marketing is to increase awareness of the home services business, generate leads, and ultimately close sales. Data removes the guesswork so return on marketing spend is greater.
Performance marketing uses data collection methods to understand what tactic earned each qualified lead. Because there are so many different channels available for home services marketing, it is vital to spend only on the channels that increase your market size. The best marketing strategy for home services is the one that adapts and generates greater market growth.
Join the Growing Home Service Industry
There are many home services professionals across the US. While some industries are shrinking or changing dramatically, home service professionals have the opportunity to succeed for years to come. There are already new technologies and home services that did not exist just a few years ago. If your business needs to adapt, the home services market is rich with opportunity.