The Home Services industry supports residential homes by providing several services to homeowners. For example, plumbing, floor care, landscaping, storage services, repair and maintenance, installations, home improvements, and others. Home services companies operate either on an online or offline dynamic. Customers can apply directly online, or they have to be physically present for filling out an application.
The U.S. Home Services industry was valued at $105.55 billion in 2018.
The demand for online home services has been increasing, contributing to the growth of the industry. For this reason, companies within the Home Services industry are focusing on technology to improve customer service and adapt to the rise in the adoption of smartphones. Smartphone technology can be used to influence consumers’ buying decisions, their strategies, business activities, and lifestyle. Moving towards technology, investing in cybersecurity, and managing multiple client communication channels are extremely important factors to guarantee customer satisfaction.
The Referring to the SBA 7(a) Loan Program, how many franchises in a particular industry paid their SBA loans in full including interest relative to all of the franchises in that industry. Note that many franchises are exempt from sharing their loan statuses as part of the nondisclosure exemption…. is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.
The Also can be referred to as the SBA Loan Default Rate, the charged off rate is how many franchises in an industry that were unable to pay their loan in full, defaulted their loan, and there is no confidence that they will be able to pay back the loan…. is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
For every 11 SBA loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
*SBA Loan Data from 2010-2019
*Non-Franchise Businesses taken into account: 8,966
Businesses and franchises in the home services space involve general repairs and improvement in residential homes. This includes but is not limited to moving, painting, fixing windows, plumbing, pest control, restoration, and renovation.
Many of these businesses provide on-site services and can be run from home offices, but will require staff that have experience or skill in that specific area. This industry is non-traditional as the services will usually be provided in people’s homes. A similar industry is the Cleaning and Maintenance space, as they also restore homes and businesses. However it is specifically within the realm of cleaning, while Home Services focuses on services outside of cleaning for the home.
Currently, the majority of customers seeking home improvement services are baby boomers adapting their homes to changes over time. However it is expected in several years the shift of homeowners will go from baby boomers to millennials, who will then make up the majority of the market for home improvement. Rather than building a new home, they are more likely to purchase older and more affordable housing that will require different home improvements.
With buying a business in the home services space, it is likely you will also need to buy professional equipment specific to your service, and potentially liability insurance or permits depending on what you type of home service business you choose to do.
More homeowners are becoming environmentally conscious, and would want the services provided to be eco-friendly. The cleaning and maintenance industry is also impacted by this similar trend so its learning how to reach that niche market in the future using products that are eco-friendly and non-toxic.
Additionally, more people are now working from home either part or full-time, and will spend even more time at home than previously. Therefore, it is worthwhile for these people to invest in home services to improve and renovate the space they will spend most of their time in.
At Vetted Biz, we have reviewed over 2,900 businesses and franchises for our online business platforms. For the businesses we have reviewed and analyzed in the Home Services space, we have seen a range of investment amounts start at $2,925 all the way up to $1,994,000. These businesses do not need to have such a high capital as offices can be based in the home. The cleaning and maintenance industry which also has a similar business model also has a similar higher investment amount of $768,000. Based on our research, the average royalty fee is 6.9%, and the average marketing fee makes up 2.8% of the gross revenue. In the SBA analysis for the 7(a) loans disbursed from 1991-2019, franchises in home services had a paid in full rate of 32.9% and a charged off rate of 7.2%.
Average Home Services Franchise Industry Percentage Fees
Standard Home Services Franchise Industry Investment
This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 116 franchise concept investment breakdowns in order to calculate this figure.
The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
For every 11 SBA franchise loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
*SBA Loan Data from 2010-2019
*Franchise Businesses taken into account: 401