Not every successful business is glamorous.
One of the industries growing like gangbusters during the past year, but that ranks extremely low on the cool factor scale, is the "services to buildings and dwellings" sector. Comprised of services including exterminating and pest control, janitorial services, and carpet and cleaning services, this sector has fairly low upfront costs, and many businesses in the industry don't necessarily require physical building space. Still, these are companies only Dirty Jobs's Mike Rowe could love.
Companies in this industry generated nearly 16 percent annual sales growth during the 12-month period ending September 15, 2015, according to data from Sageworks. When looking back at the past five years, annual sales growth in this sector has nearly tripled, ranking the industry in the top 10 fastest growing industries in the U.S. over the past 12 months. This is nearly 70 percent higher than the average annual sales growth of all privately held companies.
"The industry has seen a significant bounce-back from the recession," says Sageworks analyst James Noe, adding that services in this sector are always going to be needed. "As a school or public facility, you can cut expenses on a lot of things, but keeping your facilities clean is virtually non-negotiable."
Not only have these companies seen healthy revenue growth, but they have also, on average, increased net profit margins from 5.5 percent in 2012 to 7.6 percent today. Businesses in the sector outpace the private-company average in terms of revenue growth, and are more profitable than the average private business.
One of the main drivers of the industry, landscaping services, looks to have benefited much from the recovery in the housing market and more disposable income. With more disposable income, each consumer can spend more on improving their homes. Cleaning services like carpet cleaning or general janitorial services look to also have benefited from lower vacancy rates in office buildings.