Forget about exotic vacations and fast cars; today's consumers are interested in putting their money where they spend the most time: their homes. Tired of living with the same old kitchen cabinets, worn-out drapes and boring landscapes, homeowners are redecorating, remodeling and replacing at record rates.
According to the Home Improvement Research Institute, home-improvement product sales hit $158.9 billion in 1999, a 7.3 percent increase over 1998. And the institute predicts a growth rate of 6.3 percent this year.
While do-it-yourself projects are still popular among certain segments of the population, there's a growing trend among consumers to pull out their wallets and seek assistance from home-improvement experts. That means more profitable home-improvement franchise opportunities for entrepreneurs.
"People are more willing than ever before to spend money on their homes," says Gerald Baldner, president of Kitchen Solvers Inc., a kitchen- and bath-remodeling company that has 110 franchises in 31 states. In 1999, the franchise earned $11 million in sales.
"In the past five years, we've seen a dramatic increase in kitchen and bath remodels," says Baldner. "The growth is due in part to a good economy and an increase in discretionary income, but it's also related to the fact that nowadays people feel freer to spend money on their homes. Years ago, you bought a house and lived with it. Today, homeowners ask, 'How can we make it better?'"
The demographic market fueling this home-improvement boom? Generally, married couples in their late 30s or older who have lived in their current home for at least five years and earn annual incomes of $40,000 or more, says Lori Marshall, owner and president of Decor-At-Your-Door International, a franchise specializing in window coverings, flooring and wallpapering. Marshall started as a franchisee with Decor-At-Your-Door in 1998, and did so well, she bought the company in early 2000.
"Many of our clients tell us that, rather than buying a new home, it's cheaper and easier for them to fix up what they have," she says. "They like their home, neighbors and school system, and they don't want to leave. By replacing carpeting or putting up window treatments, we can provide them with an effective way to spruce up their homes, and they're almost always delighted."