Celebrating the Spirit of Entrepreneurship with HomeAdvisor Small Businesses

By Mischa Fisher

Updated November 26, 2019

Americans love the handcrafted, local, and small scale. While our nation’s big businesses are now household names around the globe, we still respect and love small businesses.

And that respect and love includes the skilled craftsperson providing small batch goods and services. This is true for everything from craft made whiskey and handmade bags, to small restaurants and local gardeners

This is probably why Small Business Saturday – happening this year on November 30th – has been so successful over the last ten years. Small Business Saturday was created intentionally to both raise awareness of – and drive business to – our nation’s 30.2 million small businesses. Last year, these small businesses created net new employment of 1.9 million people, and now have nearly 60 million people working for them, a whopping 48 % of all employees in the United States.

Small Business Share by Industry

One industry segment where small businesses are exceptionally prevalent is home services. According to the small business administration, small businesses in construction type companies have 82.3% share of all the employment in that industry.

Even more striking, the SBA has a typical small business size of nearly 750 employees: on HomeAdvisor’s network, we see truly small businesses – 10 or fewer employees – making up nearly 65% of our platform’s provision of services.

Two of the key economic drivers of the high number of small businesses in homeservices are the absence of certain barriers to entry, and the nature of the work itself.

Barriers to entry in home services are low relative to other industries where we see much larger businesses. For example, the technical and highly job-specific nature of home service work allows for relatively easy small business creation because the upfront capital required is skilled human capital, not expensive physical capital. To start a remodeling business you require a skillset and a work ethic, but not a CNC machine or a forge.  

The nature of the work in home services also allows for higher rates of small business formation. Because so many jobs are specific to a single home, and because there is so much variation in home design, location, shape, structure, and age: economies of scale and large businesses don’t have as easy a time automating task completion away.

Finally, because homes are a unique and somewhat intimate space, consumers likely also place a high degree of importance on a small-scale operator where it’s easy to know the business owner and have a direct relationship with the person doing the work.

So as November 30th nears, do not forget our home pros, America’s small businesses who help us care for, fix and transform our homes.

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