GEORGE, WHAT’S THE NEXT BIG THING ? SEEING THE OPPORTUNITY IN INDISPENSABLE SERVICES
I get that phone call a couple times a day, and there are certainly exciting, growing brands that we have a lot of fun looking at alongside our candidates. But, as a business owner myself, I like businesses that are predictable and where the segment has a history that could help us identify important trends.
Have you ever looked at how Warren Buffet invests? He tends towards proven stable core businesses, not the latest fad. He looks for those businesses that customers can’t do without.
As you look at your community you will find those businesses in some pretty predictable categories, here are some examples:
• Home Improvement, home repair and construction
• Disaster recovery and insurance services
• Business services
• Health services
These categories will not often sound as hot and exciting as a new restaurant or fitness brand, but look a little deeper and they could be even more interesting than the brand with all the sizzle.
That first category, automotive, is an interesting place to consider capturing revenue in.
When a consumer or business has a vehicle that won’t run, they have to get it fixed. If they have an accident, they will be at a body shop to get a quote. As you go through the next day, get a rough count of the cars in your neighborhood. Look at how many end up in the parking lots at your work or the places you shop. Cars are required for most of us to get to work and make money, as well as to take care of the normal errands we run every day. When a consumers car breaks down that is not an optional expense, the loss of transportation will cost them time, money and quality of life. For a business, the loss of use of a vehicle can often cost far more than the repair.
The automotive repair space has two large categories, mechanical repair and body repair. While they both focus on vehicles, the business models are slightly different. Mechanical repair shops often benefit from the relationship building owner behind the counter reassuring customers that their car will be back to them soon in top condition as he builds a long standing return customer. Auto body shops often benefit from a more executive type owner and great systems, that owner will often be very active in their community so they can be front of mind and win that less frequent business and fleet contracts.
Vehicles also require routine service to stay operational, they have parts that have a limited lifespan (oil, brakes, tires, belts, etc). In this category you would find businesses like the oil change brands. In recent years two groups have been competing hard to with more of this business, the full line repair shops I spoke about above as well as auto dealerships. If you look in this space gather a lot of data to run your numbers and look closely at all competition in your market.
There are companies that customize vehicles to the desires of the consumer, wrap graphics around company vehicles and others that do all those fiddly repairs and upgrades that car dealers need to make the cars on the lot more attractive to buyers.
From car electronics to body upgrades there are a myriad of options to help consumers create a car that is unique to them and fits their vision. In this space keep in mind that these businesses may follow economic trends and be expenses people cut back on if they feel financially conservative.
The exception to that are all of the services that may be offered to car dealers, these will follow car sale trends more than they will just economic trends: Paint touch up, interior repair, customizing, wheel repair and refinish, detailing and a range of other small mobile services. These businesses can make a cumulative difference of thousands of dollars in final sales price on a used or even a new vehicle.
And all of that is not even getting into car washes, vehicle wraps and the countless other services that consumers and businesses demand.
When you look closely at the automotive space you see a number of ways to plug into core services, most of which are necessary regardless of what the stock market is doing. The models will vary pretty considerably, but there many different types of owners could find a home here.
As you consider other core service categories, you will see comparable pools of opportunity. In construction related brands there are a number of ways to grow a business in that space from home improvement, disaster recovery services for interior and exterior events, heating and air conditioning on the broader end of the spectrum to specialized services like mobility solutions, window treatments, flooring and garage customizing.
With brands focused on health services you will find concepts like home care services, senior residence placement, the mobility companies mentioned above, medical testing and medical staffing. In business services common categories include Staffing, technology, marketing, printing, insurance services, interior cleaning, power washing, window cleaning, inventory and many more.
The moral of the story is that each major market that you may want to dive into may offer a number of ways that you could approach building your business. Take your time, determine all the different approaches available and compare your model (how you want to work and the skills you bring) to the different options available.
Core indispensable services can be a great way to build a sustainable revenue stream as well as an asset you can sell down the road. When you tell your neighbor what you do, they may not think it is the hottest new concept, but you may prefer a proven performer to a new fad.
Back to that automotive space, cars have been part of our culture and needed service since the late 1800’s and became a pretty big business when Henry Ford showed up with mass produced cars. The types of core services required have not changed much, only the complexity. Is it your turn to jump on a proven trend that is over 100 years old?
Mr. Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both startup and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.
Contact the Franchising USA Expert George’s Hotline 703-424-2980