Starting a business is never without some risk, forging your own path can seem even more uncertain during an economic downturn. When economic volatility strikes, some industries are impacted more than others. However, the home services industry typically fares better than other sectors, and consequently, services businesses in that industry tend to be lower risk regardless of economic fluctuations.
Quality home services franchises provide recurring revenue models that are relatively recession resistant and can usually be started with minimal upfront capital investment. With growing demand, recurring revenue, and a range of other benefits, the home services industry has become a top choice for prospective business owners. Let's take a closer look at why starting a home service franchise is worth a look - even in times of economic uncertainty.
Recession Resistant Business
To a business owner, perhaps the most important consideration of a business venture is its ability to withstand economic slowdowns and still thrive. Home services businesses are typically able to weather a tough economy because of the demand for these services, which is why many are considered recession resistant businesses. Home maintenance and repairs are essential in any economy.
In fact, in 2022 alone homeowners spent nearly $6,000 on average on home repairs and maintenance. From the A/C unit and appliances to plumbing, the things that keep a home up and running don’t last forever. This means that even if the economy falters, these services will still be necessary for homeowners.
Increasing Demand for Home Services
The way people live, and work has likely changed permanently in these post-pandemic years, but these trends have also led to increased demand for home services as a result. With more people living, working, and learning from home, homeowners have helped push the demand for home services to new heights.
From home renovation projects to landscaping, cleaning, and repair and maintenance, the demand for home services of all kinds remains well above pre-2020 levels. Statistics show that, nationwide, a home service job is completed once every 16 seconds. With more time spent at home, it seems homeowners are becoming increasingly aware of issues they may have overlooked in the past, and the need for regular maintenance, and thus demand for home services, has increased as well.
Recurring Revenue Business Model
A third aspect of the home services industry that makes it a great option for prospective business owners is its recurring revenue model. One of the most challenging parts of starting a business can be unpredictable service schedules or cash flows, especially during the first few years, but many home service franchise businesses are different.
Many home services are typically billed on an ongoing basis, meaning that they can generate reliable and predictable income over time. In fact, home maintenance is becoming more of a priority for homeowners, two-thirds of whom reported in 2022 that preventive maintenance would have helped them avoid costly home repairs that year. By providing regular, scheduled maintenance to repeat clients, home service franchise businesses see recurring revenue and more consistent cash flows, all while giving their clients peace of mind.
Start a Lower-Risk Business by Franchising
As you can see, starting a home service franchise business can be an ideal way to start a lower-risk, recession resistant business. With increasing demand for services and the potential for recurring revenue, a home service franchise business can be a great option for both new and experienced business owners. And choosing the path of franchise ownership can offer competitive advantages when compared to going the start-up route, including:
High Success Rate for Franchises
A key benefit of franchising is its high success rate. According to the U.S. Bureau of Labor Statistics, "It's generally accepted, because of their established, proven business practices, that franchises have higher success rates than independent businesses." Neighborly® brand franchise businesses are designed to create growth opportunity while keeping a franchise owner’s risks as low as possible. There is no need for trial and error or other costly startup activities, as the entire process has already been tried and tested by hundreds of franchise owners who came before.
Franchisor Support Minimizes Risk
What makes any one franchise opportunity stand out from the rest? In Neighborly’s case, it is franchisor support. Franchising allows business owners to benefit from the combined wisdom and experience of a team of experts who have been in the business for years. At Neighborly, new franchise owners not only receive comprehensive initial training, but also ongoing support for the entire length of your tenure with Neighborly.
From marketing and public relations support to vendor procurement and beyond, Neighborly provides the resources you need to get your business started on the right foot. In challenging economic times, this support can mean the difference between struggling to stay afloat and growing your way through anything the economy throws at you.
Find the Home Service Franchise That’s Right for You
If you're looking for a lower-risk, recession resistant business that offers reliable and predictable income, home service franchise businesses may be the right option for you. With Neighborly's comprehensive support and proven business model for each of its brands, franchising a home service business could be the key to unlocking a promising future.
Visit us online to take our franchising quiz - and find the perfect business for you.
