The ultimate guide to growing a home service business in 2024 and beyond

What You will Learn in this article:

• Brief intro on "start-ups"
• Time Crunch and where to keep your focus
• Stats you need to know about home services
• Home Services marketing must haves
• Private Equity trends on home services
• Staffing Salsa: Hiring, Firing, and Training
• Accounting basics

Introduction


Local business owners and home service companies we're now in 2024 and it's time to prioritize what you should spend your time and efforts on to make sure that you grow your company as fast and as efficiently as possible. In this article, we’ll explore what’s worth your time to focus on, what to outsource, and how to avoid a possible buyout that could ruin your legacy. 

start-up home services

While the thought of being your own boss is refreshing, new, exciting.... there is a bunch of crap no one tells you, things you can't understand until the livelihood of your business and employees rests on your shoulders. Let's take a quick look at 5 things no one tells you but you have go through the fire to truly understand:

#1: Don't Quit Your 9-5 to Start a Business

Even if you're not making what you want or deserve to make at your 9-5, it's paying the bills! Jumping ship without income, with no proof of concept, is the worst decision you can make. There are costs like operations, marketing, LLC formation, lawyers, things that will eat your profits for 30-120 days.

#2: Time Sacrifices are Mandatory

Your weekends, they're gone. Late nights, a given. To get your side hustle into an actual profitable business you are going to sacrifice the next 12-18 months of nights and weekends, to become your own boss. You will miss memories of friends, family members, and your kids. This is the cost of building an empire.

#3: Business is War

You may be the most knowledgeable roofer, gutterer, HVAC, plumber, etc... But your competitors have spent hundreds of thousands of dollars in the past on gaining market share and marketing. You are the new recruit and they are the champion. Be prepared to go to war, get kicked around, while you grow.

#4: One Person Show

Spouses, friends, family members, all will say they want to help, but you'll likely be in this solo for a while. That means you are the salesperson, marketer, implementer or installer, accountant, CFO, CEO, and god only knows what else can be thrown at you. You must be mentally prepared for this new path.

Home services statistics you need to know

Home Service Markets are Growing!

Global Home Services Market is poised to grow 18.91% per year from 2019-2026. Its total global evaluation should be about $1.2 Trillion! In the US, Home Services hit $600 Billion in total market evaluation. From 2018 through the end of 2023, searches that included “local” and “near me” have increased 350 times. The average homeowner spends $5,000 per year on Home Services. 

Private Equity is buying up local businesses

As of December 2023, 211 home service companies were acquired by either private Equity or larger Regional players?Private equity firms have a keen eye for investment opportunities that promise stable returns and growth potential. Home service companies fit this criteria perfectly, given their essential role in the real estate ecosystem. These firms are often attracted to home service companies for the following reasons:

Predictable Revenues



Home service companies often enjoy steady and predictable revenue streams, driven by recurring maintenance and repair needs in the housing market. This makes them attractive for investors seeking stable cash flows.

Real Estate Synergy

Home service companies, such as HVAC, plumbing, and electrical service providers, have inherent ties to the real estate sector. By acquiring these companies, private equity firms can effectively expand their real estate portfolios and create synergies between their existing investments and the acquired businesses.

Vertical Integration

Owning home service companies allows private equity firms to vertically integrate their real estate holdings. This means they can control not only the property but also the services required to maintain it. This reduces their reliance on external vendors and can potentially lead to cost savings.

The Buyout and Keeping an Eye on EBIDTA

Having your employment, training, financials, and inventory all within easy to use software solutions is the first step. Next you want to make sure that every aspect of your business is documented and easy to follow. From there you need to get your books in order.

• What is your monthly profitability?
• What months historically are down months?
• What is your annual profitability?
• Multiply your last 3 years of profits combined by 2x and 3x. This is your bottom asking price.
• If you can gain a 5x sell price, good for you.
  

Negative Impacts on Selling Your Home Service Business

While private equity's interest in home service companies may seem like a strategic move, it is not without its challenges and concerns, especially for local businesses in the home service industry.

Competition and Consolidation

As private equity firms acquire multiple home service companies, they may consolidate operations, reduce competition, and potentially raise prices. This could limit choices for consumers and hinder local companies' ability to compete effectively.

Employee Concerns

Acquisitions can bring changes to a company's culture and work environment, potentially unsettling employees. Local businesses may struggle to retain skilled workers if they are lured away by the larger resources and benefits offered by private equity-owned companies.

Impact on Local Economies

The proliferation of private equity-owned home service companies may have implications for local economies. These firms may focus on profitability rather than community engagement, which can impact the social fabric of the neighborhoods they serve.

Quality of Service

While private equity-owned companies may promise efficiency, concerns about the quality of service may arise. Local businesses often build strong reputations through personal relationships and community trust, which can be difficult for larger entities to replicate.

Example of Home Service Company Buyout

The growing and Newfound trend of private Equity buying out local and highly productive home service companies to integrate them into their franchises is on the rise. Companies like Friendly Home Services purchasing Falls Heating and Cooling located in Cuyahoga Falls Ohio is just one example. It's like David and Goliath, except Goliath has a megastore. Big box companies and private equity are moving in on our turf with flashy ads and aisles longer than a Monday. But fear not! You've got the home-field advantage and the personal touch they can’t replicate. Example: Think of your business as the neighborhood's favorite diner, where everyone knows your name, 

versus a giant fast-food chain.

Leads are the result of Branding with Marketing

In today’s world, it's all about leads, right? If you don’t make money, spend less than you make, you don’t have a business, you have a hobby. Yes and no. 

If you create a business that is solely reliant on Paid Ads when the cost per click (CPC) continues to rise when your most affluent competitors find that keyword, you’ll be outbid and you’ll lose everything. 

You’re probably asking; “OK, TIP, but what in the hell do I do then?”

First, you must understand the difference between Branding and Marketing.

Branding is always the Base of Your Marketing

Branding is combining your home services to solve a problem the homeowner or building manager can't solve themselves. Like branding a cow, you know who it belongs to, and what it stands for. It makes you like them (target audience) or makes you dislike it (poor matching). Whether your branding is working is simple:

Your Home Service + Your Customer = Outcome (Money). 

Branding will always happen, but good branding makes you more money than marketing. One of the greatest branding examples of in-home services is “The Brothers that Do Gutters” franchise. While not a client of ours, you feel and know exactly what they do by hearing their name, seeing their name, and their logo. Problem: Gutters, Emotion: get my gutters fixed or installed, Solution: Brother that Do Gutters. 

Marketing defined in a single paragraph

Marketing is a process of campaigns focused on targeted audiences looking for a solution, then finding your solution and calling you. True marketing has campaigns that run on all platforms and mediums; website, SEO, Google Maps, social media posts, social media videos, online reviews and reputation management, customer retention and referrals, and yes even paid ads. 

Home services marketing must haves to dominate

Your Brand is Set, Now what Marketing do you absolutely Need?

Competitor Brand Analysis

Know who your top 5 competitors are to keep an eye on their strategies, get to know their branding, their pricing, their people. This all helps you build a brand that uses the same strengths they have but puts your unique twist on the same services. Uniqueness is what sells, not a product. Brand yourself!

Competitor Keyword Analysis

Don't guess which keywords are going to give you future rankings and leads. Scout your competitor services on Google My Business, what they say, and then using a google sheet or excel to write them down. If you have the money, hire an agency or invest in SEO courses and SemRush.

SEO-Optimized Website

While online listings below will help rank your Google Maps and Google Profile, every company needs a website. There are ugly websites that rank and beautiful websites that get absolutely no leads or traffic. Website that have SEO-optimization and monthly SEO services have 49% more traffic! You want beauty with SEO-optimization to rank and convert online visitors. Additionally, your website when optimized will help you rank on Google Maps and up-rank your Google Profile. Our clients average 25-50 leads a month with their websites and you should too. For more info on websites, visit our website services page.

SEO-Optimized Profiles

Now you have branding, your Google Business Profile, it's time to get your business on 50-70 local listings in 72 hours or less. We use SemRush Local Listings and Map Ranker to do this. You want every last profile online to say the same thing, to have the same pictures, the same mission. This is called online omnipresence. These listings when linked to your website and Google My Business are signs to Google Maps that you are the real deal. Now just remember that you have to manage these listings and reviews that come on profile too.

Post to Google Business Profile every 5 Days

Local SEO is time consuming but really rewarding. Post to your Google Profile every five days with something of value based on your services and brand.

Update Google Business Profile Offers

Don't be afraid to create short offers of 10-15% a week before a big holiday to capitalize on buyer's psychological wants and needs.

Upload Job Site Pictures to Profiles

Before you leave a site and head home, upload your day's photos to all your profiles, or send them to your marketing team and have them do it. In the photos make sure to mention city and service provided. This all helps you ranking, traffic, calls, and forms.

Question and Answered

On your Google Business Profile is an area where people can ask questions. Get your friends, family, and clients to ask questions and then provide in-depth answers to those questions so people can know more about you. Rankings will climb.

Upload Job Site Pictures to Profiles

Before you leave a site and head home, upload your day's photos to all your profiles, or send them to your marketing team and have them do it. In the photos make sure to mention city and service provided. This all helps you ranking, traffic, calls, and forms.

Question and Answered

On your Google Business Profile is an area where people can ask questions. Get your friends, family, and clients to ask questions and then provide in-depth answers to those questions so people can know more about you. Rankings will climb.

Online Reviews

Google Maps has over 300 things an agency should take care of for you, but the fastest way to grow in Google Maps is reviews.  You want more reviews, more frequency of reviews, and to respond to reviews within 4 hours. Simply go to vistaprint.com and create a 5-star QR code card. Have people scan the QR code after a job is done or retarget them through an email campaign 3 months after for a "check-up."

Optional: Yelp Ads

Yelp provides the cheapest ads price wise and prospects. For $250 to $5,000 per month you can build your entire monthly leads off Yelp, but just know like any other Ads platform if the pricing changes you could be left out in the cold.

Optional: Google Ads

Google Guaranteed ads are great because you only paid for valid leads, but Google pay per click (PPC) ads have more leads and if done properly can generate 15-150 leads a month dependent upon your budget. Just watch the ads or you'll spend it all!

Do you need help?

If you're in need of marketing services mentioned above, please contact us today and we'll perform a FREE marketing audit, give you the strategy, and go over the likelihood of a 20-40x marketing ROI within six months.

Who's hiring your skilled trades?

Hiring the right talent and retaining them for your home services company can feel like dancing to a tune with constantly changing beats. Just like finding the perfect DJ who knows when to play the cha-cha slide, businesses in this industry must strike a harmonious balance between staffing, recruiting, and customer relations. The recent staffing crisis has only added a new layer of complexity to this dance, leaving many businesses wondering where to turn for help.

What are the hourly salaries for the trades in 2024?

home services staffing trends

Links: gutterer, roofer, electrician, hvac, plumber, welder, handyman, landscaper

Gutters vs. Roofers

Gutter and Roofing companies go after the same employees, but Roofing companies have more money and thus they always get the first pick.

HVAC vs. Plumbers

HVAC companies are adding plumbing services at astonishing rates. So Plumbers are selling businesses and losing employees.

Construction vs. Restoration

As a construction worker you have a set shift usually. However, in restoration you have to be able to drop everything for a call. Advantage: Construction.

Sheet Metal vs. Welders

Sheet Metal and Metal Roofing is big business. However, more and more people are opening up their own handyman welder businesses in recent years.

Landscapers

With a steady flow of migrants form our open borders, right now is a great time to start or expand a landscaping company. Lots of workers!

Electricians

While still dominated by unions in a lot of states, more and more HVAC companies are scooping up electricians. Suggestion is to pay higher if you can.

The Decline of the Handyman

Even though a Handyman can make really good money and marketing is simple, it's market is shrinking at 0.8% YoY. Companies offer benefits and better hourly. Look for them on Yelp and hire them!

Local Recruiters

An easy way to save time is to search for a recruiter for home services in your area. The money you spend will save you hours of sorting through endless resumes, and that's their talent!

Are you a CPA? Are you a Bookkeeper? Then you're losing money.

There are specific ways to generate Income Statements, Profit and Losses (P&Ls), and optimize your entire QuickBooks systems with one to two purchases from a local CPA or Bookkeeper. If you don't do an immense amount of transactions, simply hire them on to go through once a month or one a quarter. Our bookkeeper is $250 per month and they keep our Account Receivables and entire QuickBooks on point. If you don't know the terms below you should hire someone ASAP!

Accounting basics

What is a P&L?

A P&L is a snapshot of your company's sales, expenses, and net income over a set time frame. Revenues - Expenses = Profit or Loss

What is an Income Statement?

Income statements take your P&L and give you the ability to make future projections on profits, revenues, and costs.

Different Income Sources

If you have different types of home services such as roofing and gutters, or wish to see different amounts of cleaning types; then you want to set up different types of income.

Vendor Costs

Vendor costs are big for most companies. You want to have them be separate than payroll and inventory for example.

Depreciation

Depreciation is a non-cash expense that is vital to the business but its value will get lower over time; vehicles.

Liabilities

Liabilities are needed for the business to operate but do not depreciate in value thus largely are not a write-off.

Assets

Assets can include cash, inventory, property, equipment, and your company's investments in other stocks. Remember company's can own and buy stocks too!

MRR vs. MRR

MRR can stand for monthly recurring revenue or monthly run rate. Monthly recurring revenues are the maintenance plans you sell, while monthly run rate is usually used to described 12 months of earnings.

Fair Market Salary Evaluation

Once a year you or your recruiter or bookkeeper should find out the annual salaries of positions locally to evaluate your ability to retain your staff. This also helps you plan out how to "bonus" them without adding a significant salary bump!

Inventory Management

Every 3 months you, your managers, and your bookkeeper should look at all these reports and evaluate the amount of inventory stock for supplies you can keep on hand without declining your company's profitability.

Get notified of new free tips

If you enjoyed this article sign up for notifications of when another great article is published.

Do you need help?

If you're in need of marketing services mentioned above, please contact us today and we'll perform a FREE marketing audit, give you the strategy, and go over the likelihood of a 20-40x marketing ROI within six months.