Business Services Franchise & Business Opportunities
Business Services Industry
General Business Services Industry
The Business Services industry provides a variety of services such as photocopying, printing, mailbox rental and support, blueprinting, parcel and mail delivery, office administration, hiring and placing of personnel, consulting, security services, travel arrangement, cleaning, and waste disposal.
The Business Services industry has over 400,000 open businesses and combined annual sales of $917 billion.
Business Services Industry Trends
Companies in the business services industry will continue to invest in the integration of digital transformation into the overall strategic road map, not only to connect sellers and buyers directly but also to keep competitive within the industry. In addition, the demand for cybersecurity has been increasing as cybercriminals have been attacking businesses and threatening their data and confidential information. Firms that are victims of cyberattacks face great cost as clients tend to search for a more secure service provider.
Key Business Services Industry Numbers
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Paid-in-Full Rate
The Paid-in-Full Rate is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.
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Charged Off Rate
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
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SBA Loan Success Ratio
For every 11 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Franchise Loan Data from 2010-2019
-Non-Franchise Businesses taken into account: 55,045
Franchises in the Business Services Industry
These types of businesses focus on service other businesses grow in particular through their business operations. This can be through accounting, tax planning, marketing, office supplies, and more. These businesses focus on business-to-business, commonly known as B2B. They do not provide products or services that are direct to consumer, like businesses in the retail industry.
In 2019, the business services industry had a total revenue of $10 billion, and has had an annual 1% growth since 2014. With 27.9 million small businesses in the U.S., almost every business no matter the size will need at least one business service company to support in their efforts.
Outsourcing other services to professionals will allow the business itself to focus on its main services. Franchises in the business services space must show other companies they will provide more value relative to these companies having staff in-house.
These franchises are a popular option because they are a low investment amount and secure.If you had past experience in the corporate world, but want to run your own business, you may find familiarity in running a franchise in the business services industry space.
Furthermore, new companies can enter into the business services market as there is no dominant competitor within this industry.
Business Services Industry Franchising Trends
There has been growth in the personal staffing industry, as technology advances business can create systems and programs for telephone operators and guest services outside of the physical office.
As small businesses continue to grow, so will the demand for business services. More businesses also prefer to outsource business services because it is more cost effective than hiring full-time staff.
How much can a Business Services franchise cost?
Through our online platform Vetted Biz, we have reviewed over 1,600 businesses and franchises. Of the concepts in the business services space we have reviewed, total investment amounts can start as low as $925 all the way up to $26,690,000. Out of all Vetted Biz’s specific industries, the business services industry has the smallest range and the lowest maximum investment amount. In our research, the average royalty fee takes up to 10.4% of gross revenue, and the average marketing fee is 2.2% of the gross revenue. Many business services industries have a higher royalty fee relative to other industries but they make up for it with less or even no marketing fee. In the SBA analysis for the 7(a) loans from 1991 to 2019 adjusted with loan disbursed, franchises in business services had a paid in full rate of 61.4% and a charged off rate of 12.1%
Average Business Services Franchise Industry Percentage Fees
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Royalty Fee
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Stability Rate
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Marketing Fee
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Growth Rate
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Failure Rate
Standard Business Services Franchise Industry Investment
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This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 160 franchise concept investment breakdowns in order to calculate this figure.
0
%
Paid-in-Full Rate
The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.
0
%
Charged Off Rate
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
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:1
SBA Loan Success Ratio
For every 10 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Franchise Loan Data from 2010-2019
-Franchise Businesses taken into account: 2,390
Sample Business Services Franchise Income Statement
| Year 1 | ||||
|---|---|---|---|---|
| Base | % of Gross Profit | High | % of Gross Profit | |
| Sales | $ 1,181,100 | 100% | $ 2,333,300 | 100% |
| Cost of Goods Sold | $ 1,049,000 | 89% | $ 2,072,400 | 89% |
| Gross Profit | $ 132,100 | 11% | $ 260,900 | 11% |
| Expenses | ||||
| Rent | $ 30,000 | 23% | $ 42,000 | 16% |
| Utilities | $ 300 | 0% | $ 300 | 0% |
| Marketing / Advertising | $ 36,000 | 27% | $ 60,000 | 23% |
| Insurance | $ 4,000 | 3% | $ 4,000 | 2% |
| Royalties | $ 22,500 | 17% | $ 44,400 | 17% |
| Salaries / Wages | $ 33,300 | 25% | $ 49,900 | 19% |
| Repairs and Maintenance | $ 1,000 | 1% | $ 1,000 | 0% |
| All other expenses | $ 1,000 | 1% | $ 1,000 | 0% |
| Total Expenses | $ 128,100 | 97% | $ 202,600 | 78% |
| Owner Benefit | $ 4,000 | 3% | $ 58,300 | 22% |
| Net Profit Margin | 3% | 22% | ||
| Year 3 | ||||
| Base | % of Gross Profit | High | % of Gross Profit | |
| Sales | $ 3,543,300 | 100% | $ 7,000,000 | 100% |
| Cost of Goods Sold | $ 3,147,100 | 89% | $ 6,217,200 | 89% |
| Gross Profit | $ 396,200 | 11% | $ 782,800 | 11% |
| Expenses | ||||
| Rent | $ 30,000 | 8% | $ 42,000 | 5% |
| Utilities | $ 300 | 0% | $ 300 | 0% |
| Marketing / Advertising | $ 36,000 | 9% | $ 60,000 | 8% |
| Insurance | $ 4,000 | 1% | $ 4,000 | 1% |
| Royalties | $ 67,400 | 17% | $ 133,100 | 17% |
| Salaries / Wages | $ 83,200 | 21% | $ 116,500 | 15% |
| Repairs and Maintenance | $ 1,000 | 0% | $ 1,000 | 0% |
| All other expenses | $ 1,000 | 0% | $ 1,000 | 0% |
| Total Expenses | $ 222,900 | 56% | $ 357,900 | 46% |
| Owner Benefit | $ 222,900 | 44% | $ 424,900 | 54% |
| Net Profit Margin | 44% | 54% |
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