In the home service industry, reaching $100 million in annual revenue has become a mark of success. We’ve seen several HVAC businesses do it, and I can think of at least one garage door company. I know several electrical and plumbing companies that have done it, but not as a single trade.
For businesses that have built a solid foundation, this milestone isn’t just about size—it’s about proving the strength of your marketing, sales, and operations.
You might want a $100 million dollar service company, but the real question is: Is this realistic for your business? Can your market sustain a $100 million service business in a single trade?
Is $100 Million HIDING in Your Market?
In the home service industry, reaching $100 million in annual revenue has become a mark of success. We’ve seen several HVAC businesses do it, and I can think of at least one garage door company. I know several electrical and plumbing companies that have done it, but not as a single trade.
For businesses that have built a solid foundation, this milestone isn’t just about size—it’s about proving the strength of your marketing, sales, and operations.
You might want a $100 million dollar service company, but the real question is: Is this realistic for your business? Can your market sustain a $100 million service business in a single trade?
Is $100 Million Possible in Your Market?
Reaching $100 million in revenue isn’t just about working harder—it’s about knowing the financial capacity of your market. To determine this, you need to look at a few key factors:
- How much revenue can each home in your market generate?
- How frequently do homes need repair or replacement services?
- How much of the market can you realistically serve?
By answering these questions, you’ll get a clear picture of whether your market has the potential to support a $100 million business.
What You Need to Know
You need to understand your numbers and accept the reality that they vary not just market to market, but company to company. So, for the sake of example, I’m going to use a base average to calculate the potential of $100 million in your marketplace. These repair and replacement examples are not recommendations and are not dialed into a specific trade.
- Average Revenue Per Repair: Figure repairs that generate $650 per lead. These leads typically occur every 3 years per home, which means each home contributes around $217 per year from repairs.
- Average Revenue Per Replacement: Replacements leads average around $6,000, but they happen less frequently—about every 12 years. This comes out to $500 per year per home in replacement revenue.
- Revenue Mix: This example will use a mix 30% of revenue from repairs and 70% from replacements. This ratio will give you a baseline for calculating your overall revenue potential per household.
In total, each home you serve could generate around $717 in annual revenue when you factor in both repairs and replacements.
The Role of Market Penetration
One of the most important factors is your market penetration rate—the percentage of homes you’re serving in your market. Penetration rates can vary widely depending on the size of the market. In larger markets, you have more opportunity, but you also have more competition. Considering this clear fact, let’s use the following numbers:
- In larger markets, let’s use a capture rate of about 5% of homes.
- In medium-sized markets, let’s aim for 15% penetration.
- In smaller markets, businesses can often hit 30% penetration or higher.
For example, in a large market, you’d need to service about 2.8 million homes at a 5% penetration rate to reach $100 million in revenue. But in a smaller market, you might only need around 330,000 homes with a 30% penetration rate to hit the same target.
Market Size and Penetration: What You Need to Consider
Not every market can support $100 million in revenue. To get there, your market needs to meet two key criteria:
- It has to be big enough—you need a large pool of homes to draw from.
- You need a high enough penetration rate—you must capture a significant portion of the market.
For instance, if you’re in a market like Nashville, you’d need to reach about 930,000 homes at a 15% penetration rate to hit $100 million. In a larger market like Houston, you could get there with just a 5% penetration rate because the pool of homes is so much larger.
So, Can Your Market Support $100 Million?
The bottom line is that not every market can support a $100 million business. It depends on how many homes are in your market and how deeply you can penetrate. If your market has the right balance of size and penetration, reaching that nine-figure revenue isn’t just possible—it’s a realistic target.
Final Thoughts
Hitting $100 million in revenue doesn’t happen by accident. It takes strategy, planning, and a clear understanding of your market. The key is knowing your market size, your revenue potential per home, how much of that market you can realistically serve, the capabilities of your team, and your personal capability as the CEO.
