What are the Most Profitable Home Service Businesses?

Written by The Valve+Meter Team / December 16, 2021 / 9 Minute Read
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Significant trends in the home services industry reveal a rise in demand for smart homes and green services. With technology enhancing customer experience and a focus on exceptional service, business owners must identify the most profitable sectors. From plumbing to landscaping, specialized skills allow for high rates and increased profitability.

Marketing

There are significant trends within the home services industry including the rise of a new type of homeowner with a broad demand for smart homes and green home services. There are also increasing uses of technology to improve customer experience which coincides with the renewed focus on cultivating exceptional customer service. These four trends highlight something that all business owners and operators need to know-What are the most profitable home service businesses?

The answer to this question is nuanced because the long term profitability and growth of home services businesses is aided by nimble and savvy leadership. As you operate your own business, new business ideas and trends will mesh with your unique skills. The melding of paying attention to market trends and improving internal processes and structures leads to higher profits and more importantly better profit margins.

As the home service industry is rapidly changing and growing, there is a greater importance than ever to use data and strategy to guide new business ideas. At Valve+Meter, our team provides data driven performance marketing to help increase the profitability of your home service business. This includes a wide range of services including website design, paid advertising, search engine optimization, outbound marketing, and a full suite of other services. The key to greater profits is leaning into expertise and staying ahead of competitors.

Top 5 Most Profitable Home Service Businesses

The profitability of each home service business will range largely based on the size of the individual business, the marketplace, and the seasonality of the business. For example, pet sitting requires virtually no training, tools, or startup capital. The barrier to entry is extremely low. Since pet owners supply all food and essentials, the only investment is marketing and effort. However, services like pet sitting are niche, small, and can be impacted by the overall health of the economy.

For this article, Valve+Meter considered the size of the home service market, the forecasted growth of each, and the stability of the market. The long term profitability of the following home service businesses are robust.

  1. Plumbing: The plumbing market is estimated to be worth $130 billion in the United States. This includes businesses that install, maintain, and repair residential plumbing systems. As an essential need for all homes, this industry is a stalwart for steady profitability. This market is expected to grow at a compound annual growth rate (CAGR) of 4.5% from 2022 to 2028.
  2. Electricians: The electrical market is estimated to be worth $120 billion in the United States. This includes businesses that install wiring, appliances, and optional electrical accessories like smart home devices, solar panels, and home backup generators. This market is expected to grow at a CAGR of 4.2% from 2022 to 2028. This growth may accelerate in sectors like EV charging installations and alternative energy methods that are being adopted at an accelerated rate.
  3. HVAC: The HVAC market is estimated to be worth $110 billion in the United States. Heating and cooling is an essential need for homes. This market is expected to grow at a CAGR of 4.0% from 2022 to 2028. The growth is due in part to aging housing stock, renewable energy appliances like heat pumps and geothermal, and also by alternative accessories including air quality systems and solar HVAC.
  4. Home remodeling: The home remodeling market is estimated to be worth $400 billion in the United States. The popularity of home improvement shows across television, streaming and social media platforms lead interest in this industry. This market is expected to grow at a CAGR of 5.0% from 2022 to 2028. Interior design business, home removal business, and renovations are extremely popular as high interest rates and limited housing options dissuade homeowners from moving. Converting and reinventing living space has also become a valuable service as remote work has become extremely common since the global pandemic.
  5. Landscaping: The landscaping market is estimated to be worth $100 billion in the United States. This market is expected to grow at a CAGR of 4.5% from 2022 to 2028. Like home remodeling, landscaping has grown in profitability since the beginning of the pandemic. Homeowners have rediscovered back-yarding with the demand for plants, gardens, outdoor kitchens, hardscapes, patios, and other outdoor fixtures driving profits.

These businesses are all in high demand and require specialized skills. As a result, they can charge high rates for their services. Other home services include pest control, home cleaning, and home health care. There are also emerging trends and data that indicates how these businesses and other home service business ideas can reach greater profitability.

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Importance of Finding the Most Profitable Home Services Businesses

Beyond these trends, the home services industry is growing in general. This means that new opportunities are available to current business owners and entrepreneurs considering ownership in the market. There are a number of highly profitable home service businesses.

Expanding into the most profitable markets can be a great business move. Greater profits help you grow faster. Let’s first consider the most profitable home service business ideas and then examine how to increase profit margins in these and other businesses.

How to Increase Profit Margins in Home Services Business

Valve+Meter is a comprehensive marketing firm. Our team has extensive experience using data to help home service business owners increase profits and retain exceptional quality. Increasing your profits is far more than just charging more for your services and cutting costs.

There are a few steps that every home business can consider to improve profitability. It is important to note that there is variance between one home service business and the next. These are basic tools to generate deeper research and analysis.

  1. Research target market: Take control of your own business by studying the marketplace in your local area. Analyze your customer relationship management (CRM), heat maps, and other data to determine your best opportunities for sales opportunities.
  2. Increase productivity: Use data to improve sales processes, deficiencies in operations, and marketing strategies. In performance marketing, Valve+Meter uses data to determine the return on marketing spend. This is extremely helpful in finding the most room for improvement throughout the business. Increasing profitability by investing in training of employees, investing in new equipment and technologies, and streamlining your operations can increase profits without reducing services or staff.
  3. Embrace new opportunities and bundle services: The most successful business never rests. For example, you could offer complete home solutions of essential home services including plumbing, electrical, and HVAC services. Busy homeowners love one call solutions. You can also find business ideas in emerging trends as examined earlier in this article.
  4. Provide excellent customer service: This old idea is the newest business idea. As the workforce has become segmented, the ability to provide a curated and personalized experience can increase loyalty and referrals. Putting your customers’ needs ahead of your immediate rewards will pay off in the long term.
  5. Market your business online: There are a number of free and low-cost ways to market your home services business online. This can help you reach a wider audience and get more customers. The next generation of homeowners lives on the internet and marketing practices are capable of reaching these young homeowners.
  6. Partner with other businesses: Creating a strong network of local peers can help you reach a wider audience and get more customers. These partners help to strengthen the local marketplace and referrals can increase profits.

Marketing The Best Home Service Businesses

In conclusion, there are a number of highly profitable home service businesses and nearly every business is growing. Your own service business idea should focus on the demand of your local market and be driven by data. To increase profitability, performance marketing follows every dollar spent on marketing. When you know the origins of each lead, you can invest in the most profitable strategies again. You can also eliminate marketing and services that are not profitable or detract from the long term growth of your business. If you are interested in home performance marketing can increase profits within your home services business, contact Valve+Meter for a free marketing assessment. 

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