Service-based businesses are among the fast-growing companies in the country. Bloomberg reported in 2021 that service industries in the U.S. expanded at their fastest pace on record. It’s no wonder these kinds of businesses are also trending in the franchise world. But why?
With repeat customers and high growth rates, service franchises are some of the most popular franchising methods. Here’s why they’re a good opportunity.
What are Service-Based Businesses?
A service-based business performs tasks that benefit its customers, whether they are property owners or commercial businesses. These services typically make a customer’s life easier. For example, a mosquito mitigation company helps rid backyards of unwanted bugs, thereby making outdoor spaces more enjoyable for homeowners. It’s up to the business owner to let customers know they have a service that can make life better as they establish their brand in the community.
Lower Startup Costs and Overhead Costs
A significant benefit of owning this kind of business, and one reason entrepreneurs love service franchises, is that the startup costs can be reasonable. Since these types of businesses are usually run out of one’s home and don’t require a storefront or expensive equipment, the cost to get launched can be well below $75,000. For example, Mosquito Authority’s initial investment could be as low as $54,000! When you can keep overhead costs low, you maximize your investment in the business opportunity.
Unlike high inventory businesses where you’ll need to spend tens or hundreds of thousands of dollars to get up and running, you will have significantly fewer inventory needs with service franchises. Most equipment that is purchased upfront will be used for years to come, so even equipment replacement won’t be an issue. Again, more money goes into the revenue column than the expense column with this model.
Another key expense in many businesses is staffing, and with a service business, you won’t need many, if any, employees to run your business. You could choose to perform all the services yourself and not spend any funds on employees. Or, you could add employees in a part-time capacity if you choose to take on additional work. There is a lot more flexibility in staff requirements when you operate a service business.
Finally, since you work out of your home office, there are no rent or utility costs to record as ongoing expenses. Your equipment expenses can be kept low with minimal people using it. If you do decide to grow your business, it’s easier to add employees, equipment, and vehicles with the cash you are saving by eliminating unnecessary expenses.
There’s little need to worry about whether people will require your services in this sector. Things are always breaking in people’s homes, vehicles always need maintenance, and annoying bugs are forever infesting people’s yards.
In most cases, you perform a specialized skill that a homeowner or commercial property owner can’t do themselves. In other situations, people just don’t have the time to complete the work, especially in the commercial sector. Property owners and business owners are willing to spend money to buy someone else’s time if it means they save time, like paying a cleaning company to clean their house so that they can go to their kid’s soccer game. Time is a limited resource so, people are always calling service-based businesses to take care of certain things in their lives.
Potential For Repeat Clients
Most services are needed routinely, whether it’s a haircut every four weeks or an oil change every six months. This routine need means that you can cash in on repeat customers with service franchises which build a recurring revenue stream for your business. As long as you provide an exceptional service that a person wants to experience again, you can continuously grow your client list and set yourself up for success in 2023 and beyond.
Easy to Get Running
Earlier we talked about the lower startup costs in terms of investing in the franchise financially, but the whole startup process – from signing a franchise agreement to serving your first client – is also a much quicker process.
With service franchises, you can undergo training, complete the necessary business licensing tasks and be on your way to earning revenue in a shorter time period than would often be the case with product-based businesses. In addition, there is no store build-out or furnishing requirement which tends to take a lot of time to accomplish as well. All of these considerations factor into the more affordable and efficient startup aspect of the franchise operation.
Service-based business training can be considerably more direct because you are dealing almost exclusively with the operation of the business. With Mosquito Authority, you learn everything you need to know in order to build a successful business within the first 30 days of training. From there, you can be on your way to opening your location, serving customers, and building revenue.
Hot Service Franchises For 2023
As you can see, it’s no wonder these types of franchises are among the best investments for 2023. America’s Best Franchises finds these industries as some of the ripest for growth:
- Mosquito and pest control franchises: The mosquito control industry is growing. The pesky insect population is increasing as temperatures increase and we experience more precipitation throughout the year. The DIY option for property owners isn’t as effective, so people are turning to companies like Mosquito Authority to help take back their yards.
- Home remodeling franchises: As home prices skyrocket and the supply of new homes struggles to meet the demand of people who want them, some current and would-be homeowners are turning to remodeling their current properties instead. If you’re handy with home remodeling, this could be a great avenue for a service business.
- Maid franchises: Work demands are increasing as employees and business owners continue to be they’re reachable 24/7 through their phones. Kids and families are also involved in more and more activities after several years of being limited on what they could do. Both factors are contributing to people choosing to pay for help with everyday chores around the house, like cleaning.
- Computer repair or services franchises: Computers run our world, which means people need them fixed as soon as possible when they break, get infected with a virus or malfunction. Hence the need for these types of franchises for people who are interested in computer repair work.
Take Over the Service Industry with Mosquito Authority
When you’re looking to become a business owner in 2023, join the thriving service industry with Mosquito Authority. We are a nationwide mosquito control franchise with a proven profitability record. Not only are our services more effective than those DIY attempts that your customers have tried unsuccessfully, but we are the only franchise system with a science department. We have our own group of experts who continuously ensure that your customers receive the most effective and safest services available by constantly improving methods of mosquito control.
Unlike other industries, you can earn a full year’s worth of profit in only seven to nine months with Mosquito Authority, What does that profit look like? Our franchisees averaged $461,279 in revenue in 2021, with our top franchisees earning at least 1 million dollars.*
Want to learn more about the Mosquito Authority family? Contact us today.
*According to Item 19 in the latest FDD.