Everyone likes to talk about the year’s “hot” franchise opportunities, whether it’s frozen yogurt, quick-serve burritos or dog-sitting. However, many of the new and novel franchise concepts are gone in a flash—almost as quickly as they arrive—as the fickle market moves on to the next trend. Often, some of the best business opportunities are those services constantly in demand, but frequently overlooked.
Take plumbing as an example, a business as old as humans. Would you rather live without your computer or a functioning toilet for a day? As you consider which type of franchise opportunity is right for you, look beyond the smoke and mirrors to which opportunity will provide the best potential for long-term, sustainable growth. As FOX Business discussed on its show in December, service franchises are becoming more and more attractive to qualified entrepreneurs for their lower startup costs, lower overhead, and steady demand. It’s been declared the year of the service franchise. Here are three reasons why:
1. Franchise establishments continue to outpace the overall economy.
Data has shown time and time again that franchise establishments outperform their non-franchise competitors by output, jobs created, and number of establishments. According to the Franchise Business Index, franchise businesses in 2012 grew employment by 2.1%, dollar output by 4.9%, and number of establishments by 1.4%. In 2013, employment in franchise
Don’t be swayed by trendy business concepts that won’t last.
establishments is projected to grow by 2.0% (adding 162,000 jobs to the U.S. economy), higher than 1.8% for the overall economy. If you’re looking to start a business but are on the fence about whether or not to franchise, consider all of the support and management expertise a franchise offers.
2. It’s the fastest-growing franchise sector.
Commercial and Residential Services top the Franchise Business Index’s industry breakdown by dollar output and employment, beating out the Automotive, Retail, Real Estate, Restaurants, and Lodging sectors. This resilient and growing industry is expected to increase employment by 2.8% and dollar output by 5.5% in 2013 as more and more homeowners and property managers invest in their property’s upkeep.
Here’s an excerpt from the Franchise Business Economic Outlook for 2013 report:
Activity accelerated between 2011 and 2012 and will do so again in 2013. In addition to the expansion in new home construction, existing home sales are on the rise as well—up an estimated 8.5% this year, with similar growth expected in 2013. With this growth as a backdrop, the broadly defined residential services market is enjoying a renaissance. Employment opportunities among special trade contractors should continue to improve. On the commercial side of the business, vacancy rates in retail, industrial and commercial building have come down, and there has been investment in new building construction as well as remodeling and retrofitting of existing facilities.
3. You can’t afford not to change.
Small business owners nowadays are tasked with keeping up with every aspect of their business: marketing, accounting, human resources, social media, and new regulations. Are you up to speed on SEO, PPC, mobile payments, and online scheduling? Technology changes so fast, it’s impossible to keep up on your own, and hiring an employee or outside firm to manage all of these areas simply isn’t feasible. If your website looks like it’s from 1998, then you will fall behind your competition.
Through economies of scale, franchise businesses are able to offer expertise, software, and digital solutions to their franchise owners at a lower cost, and help franchises grow through sharing best practices. The home-service sector continues to struggle with professionalism, so small details such as a 3-hour callback guarantee, online scheduling options, and branded uniforms and vans can make a world of difference when it comes to market share.
Would you like to know more about franchising opportunities through The Dwyer Group family of brands? Contact a Franchise Developer today or give us a call at 866-696-1504.