Not to be confused with home-based businesses, home services business are enterprises that work on residential properties. These trades include landscaping, HVAC, pools, house cleaning, building renovations and restoration, plumbing, flooring, etc. And business is booming!
Thanks to an increase in marketing by home services platforms (Amazon Home Services, Handy.com, Houzz, Pro.com, etc.), more businesses entering the field, and technology innovations like instant booking options, the U.S. home service market is expected to increase at a significant growth rate through 2021.
But with more competition and greater technology penetration, comes the challenge of getting your share of the pie. With customer needs and trends constantly changing, diversification is key to success in the home services market. This means taking your business in a new direction but using the current business as your basis for doing so.
Here are a few tips to help you stay ahead of the curve and get your share of the home services business in your town.
1. Explore New Directions
One benefit of diversification is that it allows you to increase the integrated service offerings you provide to existing customers. For example, a cleaning company could diversify beyond its daily rounds to offer party/event clean-up services. But branching out also stops you being too dependent on a single customer, ensures multiple revenue streams, reduces financial risk, and creates more appeal among future customers.
Adding a new service isn’t without it’s challenges, but you can reduce risk by adding a service where minimal know-how is required. Or, if it is, can be quickly acquired.
For example, pest control companies could add another layer of protection to their customer base by offering DIY home security services (plug and play devices are more popular than ever). If you’re a window cleaner, add power washing, gutter cleaning, or painting to your portfolio. Electricians could add smart home technology installations.
Ask yourself a few questions first:
- Do you have the capital to add a new offering to your business?
- Do you have or need to hire employees to support the new service?
- Could you successfully market these new offerings to new customers?
- Do you have the know-how to provide competitive services?
2. Look to Technology to Beat the Competition
Keeping up with technology when you’re always on the job is hard and it’s easy to fall behind, especially in hands-on, manual trade professions.
Here are a few ways to think outside the box and diversify your use of technology:
- Become an Online Trusted Advisor – Maybe you’re getting questions on social media about your expertise or requests for advice. Could you start a blog or make online demo videos, all you’d need is a smartphone and a YouTube account.
- Automate – Today’s consumers increasingly expect digital interactions with service providers. Ditching your archaic operations technology for apps and cloud-based technology can knock hours off the time you spend on admin tasks. One area ripe for saving time is accounts payable and receivable. Use technology to easily and automatically send invoices and chase payments without your involvement. According to FreshBooks, customers save over 16 hours a month by using accounting software to eliminate the hassle of creating invoices and collecting payments. QuickBooks, FreshBooks, and many other accounting systems let you do this, and offer mobile apps so your office is always with you.
- Online Scheduling – Give your customers the option of scheduling service online. Home service scheduling and field management software like Jobber, Service Fusion, and ServiceTitan can automate everything from the first customer contact to getting paid.
3. Diversify Your Marketing and Go Mobile
Looking for a business or service? Chances are you’ll do it from your smart device. You’re not alone. Mobile is the dominant platform for searches, with 48% of buyers starting their searches with a mobile search engine (in 98% of cases it’s with Google Search).
But here’s the stat you need to pay attention to: 78% of mobile searches for local business information result in a purchase. That’s higher than from any other kind of device. And it’s not just how they find a business, it’s how they evaluate and choose a business.
The impact of mobile technology can’t be ignored. Here are three things you can do to get involved and diversify your traditional marketing approach:
- Have a Mobile-Friendly Website – Start with a website that’s optimized for mobile, meaning that pages load quickly and display properly on a mobile device.
- Claim your Google My Business Listing – This is super important. Any search for a local business in Google will show your business listing on the right of the screen – think of it as a digital storefront. It includes images, a map, vital information such as hours, contact info, etc. Importantly, it also includes user reviews and rankings of your business. Claiming your listing is free and allows you to edit the information and monitor and respond to reviews. Simply search for your business and claim the listing or create a new one here.
- Invest in Paid Ads – Paid ads can help you reach your customers at the right moment, i.e. when they search for business like yours. Take advantage of Google’s Home Service ads or Bing ads, these pay-per-click ads – featuring your business – appear when someone searches for a local service pro using search terms or queries that you choose.
4. Diversify Your Sources of Capital
Home service businesses require more than elbow grease to get the job done, they need to purchase equipment and supplies, maintain vehicles, pay employees, all while having enough cash flow to keep the business running.
There are a hundreds of financing options available, most of them from your local bank. But loans and even traditional lines of credit can be hard to get. The paperwork is intense, the application process is slow, plus, many banks and fintech companies require a small business owner’s personal credit for underwriting. You may find this problematic because it prevents you from separating your personal and business finances, but sometimes, it’s worth it.
For faster, more flexible options, make sure to look at online fintech offerings like a line of credit from Fundbox.
Read more about this flexible financing option for your home services business in our Small Business Guide to Lines of Credit.
Don’t Rush It
Whatever you do to diversify and grow, weigh up your options. Do some research and come up with a business plan (here are two easy ways to make planning enjoyable and productive). Don’t rush into anything until you’ve done your due diligence and know that you are on the right path for growth.
Ready for more?
Apply for funding and find out if you qualify today