Does anyone have experience sizing the market for Plumbing and HVAC company
April 16, 2022
by a searcher from University of Chicago in Chicago, IL, USA
Looking to size the market for a certain area based on population or households. For instance, I have the overall population and housing units for the target location that the company operates and am looking for the overall annual market size of HVAC and Plumbing services.
from University of Pennsylvania in Portland, OR, USA
- The sector the business operates in within the trade has a major impact. Residential service plumbing (cleaning drains, repairing existing systems, replacing residential sewer lines between the house and the street) has a much larger and more fragmented total addressable market than new construction or service plumbing on systems in commercial buildings.
- The IBISWorld report has a decent breakdown of the types of plumbing and you can use that divided by national population as a rough per capita coefficient to determine your target market's business potential
- If you are looking at a home service model get a rough gauge of whether your market can sustain a company of the size you intend to be by estimating the number of jobs you need to hit your revenue target and comparing that job count to the number of facilities in the TAM. As an example... we do ~$300K/van/year and each van covers ~3 appointments a day. The number of appointments per day varies by trade, however I've listened to several home service pros who advocate for 3 to 4 max.
- Other than the cases of a very small geographic market or a supremely large target company, any market sizing efforts beyond the simple IBIS World estimate are likely a waste of time. The hard part in the home services industry is attracting, training, and retaining enough team members, not making the phones ring. I am in several industry trade groups and the consistent theme is "there is more than enough work to go around, we just need more people." And even if there was enough contractor coverage, the industry is so dramatically fragmented that there are sufficient numbers of poor-performing competitors from whom to take market share.
Good luck
from University of Wisconsin in Hopkinton, MA, USA